How the cannabis industry is growing diversity, equity, and inclusion

Nadine Pietrowski
7/22/2021
The cannabis industry ushers in diversity and inclusion

The cannabis industry has accelerated its diversity, equity, and inclusion commitments, and it’s setting a bold vision. Here’s how.

A passionate conversation continues to be front and center within the cannabis industry about diversity, equity, and inclusion (DE&I). Will the rapidly growing U.S. market – with sales expected to reach $35 billion by 20251 – create meaningful economic opportunities for women, people of color, and other underrepresented communities? A growing number of leaders in the cannabis industry believe that it can and should.

Historically, DE&I has been a core value across the cannabis industry. As the commitment to DE&I continues, success stories are emerging, yet much work remains. Other industries can draw lessons from cannabis’s diligent efforts.

The state of DE&I at Crowe
Crowe has long embraced diversity, equity, and inclusion, and our journey continues to evolve. Learn about our approach and initiatives. 

Reflecting diversity and promoting equal opportunity

Women, economically disadvantaged individuals, and people of color can face barriers to business resources and opportunities. That’s why many advocates in the cannabis industry are laying a foundation for more women- and minority-owned businesses and for women and people of color in executive and management roles. Advocates also make their case on several fronts:

  • DE&I is now a competitive advantage for any company. Research shows that a greater diversity of genders, ethnicities, and cultures correlates with better financial performance.2
  • A diversity of business owners enhances healthy competition and innovation.
  • Diverse business ownership also helps businesses better reflect, support, and serve various customer communities.

When it comes to the cannabis industry, social equity centers around the inclusion of women and people of color in every aspect of the industry. In the cannabis industry, the sense of urgency about bringing this vision to fruition is very real. While many states are incorporating social equity into their legalization laws in hopes of creating a more just business landscape, a growing number of cannabis businesses are taking matters into their own hands.

Innovative leaders hope to establish DE&I programs and practices for cannabis businesses while the industry is still in its relative infancy – before potential federal legalization attracts a new wave of corporate interests that could crowd out fledgling businesses.

Establishing equity through public policy and private-sector programs

Progress has advanced via public policy and through private sector programs. For example, the state of Illinois, which legalized cannabis in 2020, included a provision to award a portion of its dispensary and grow licenses to low-income and minority individuals. Other states have taken similar approaches to distribute “social equity” licenses and to provide grants and loans to minority investors.

Some municipalities are also establishing DE&I programs. The Cannabis Equity Program in Oakland, California, features workforce development grants, legal assistance, a property purchase program, and shared-use manufacturing facilities to help incubate new businesses.

These examples are models to follow. But licensing programs and assistance vary by state and jurisdiction, and many might still have licensing requirements and fees that potentially could obstruct underrepresented groups from entering the industry.

On the national front, the National Cannabis Industry Association (NCIA) has endorsed numerous federal and state legislative efforts to help diversify the cannabis industry and to remove barriers to entry – such as upfront capital requirements – for people of color and disadvantaged groups. The NCIA also supports underrepresented cannabis entrepreneurs with educational resources and its Social Equity Scholarship Program.

Many private-sector cannabis companies support DE&I with their own strategies and policies. Some examples include:

  • Prioritizing diversity in hiring practices
  • Including diversity, equity, and inclusion as a company core value or pillar of corporate culture
  • Committing a portion of revenues to not-for-profit organizations and community-based social equity programs
  • Launching programs to mentor minority and women entrepreneurs or to provide scholarships and internships to train entry-level employees

Recognizing the long road ahead

Success stories abound, yet challenges remain as the cannabis industry strives to achieve its diversity goals. A 2021 report by the state of Nevada found that a majority of cannabis business owners in the state are white and male,3 and a 2020 city of Denver study found similar results.4 In Los Angeles, the city’s cannabis social equity program has struggled to help new businesses through the license application process.

However, this industry understands that small moves add up and can bring about significant change. With this in mind, the cannabis industry is pushing for diversity, equity, and inclusion, and it is setting an example for others to follow.

Grow your business with help from Crowe

The Crowe cannabis team proudly serves all types of cannabis businesses, from startup cultivators to multistate dispensaries. Learn how our services and solutions can help your business navigate challenges and reach the next level.

Our cannabis team is here to help

Talk to a Crowe cannabis specialist today. We’re eager to hear your needs, and we’re ready to offer the best solutions for your business.
Nadine Pietrowski
Nadine Pietrowski
Managing Partner, Cannabis, Office Managing Partner, Denver

Qualified organizations only. Independence and regulatory restrictions may apply. Some firm services may not be available to all clients. Given the continued evolution and inconsistency of various state and federal cannabis-related laws, any company should seek competent legal advice relating to its involvement in the cannabis industry, including when considering a potential public offering as a cannabis-related company.

1 "Growth of the U.S. Legal Cannabis Industry,” New Frontier Data, Sept. 27, 2020, https://newfrontierdata.com/cannabis-insights/growth-of-the-u-s-legal-cannabis-industry/
2 Vivian Hunt, Lareina Yee, Sara Prince, and Sundiatu Dixon-Fyle, "Delivering Through Diversity," McKinsey & Company, Jan. 18, 2018, https://www.mckinsey.com/business-functions/organization/our-insights/delivering-through-diversity
3 "Demographic Report of Nevada’s Cannabis Industry," Cannabis Compliance Board, State of Nevada, Jan. 29, 2021, https://ccb.nv.gov/media/#item-3
4 "Cannabis Business and Employment Opportunity Study," City and County of Denver, June 2020, https://www.denvergov.org/Government/Departments/Marijuana-Information/Marijuana-Annual-Report-Data-and-Statistics?BestBetMatch=cannabis|95c94ae0-247e-4b0c-b511-f9439cc122bd|c4f1b630-3cf4-4ec1-8110-c4784b6aa32e|en-US