A Good Question For March 8th: Why Are Only 8% Of Cannabis CEOs Women?

This article was originally published on WeedWeek, and appears here with permission.

The cannabis industry has a gender parity problem. 

According to a recent survey, California delivery app Eaze found that women accounted for 48% of new customers in 2020, up from 38% in 2018. Attracting female consumers has long been a yardstick for the industry to measure its progress towards mainstream acceptance. However, men continue to dominate in the leadership positions that command the highest salaries and set the industry’s future course.

The power differential isn’t just a matter of optics or doing the right thing, argues a new white paper from The Arcview Group investor network and the National Cannabis Industry Association: 

• The paper cites data that companies with women in leadership roles are more profitable, and produce more than twice the revenue per dollar invested.
• Women account for 83% of U.S. consumer purchases. Companies who better understand their buying decisions and motivations will be better positioned to win their loyalty.
• The paper and accompanying toolkit are the first in a series addressing gender disparities throughout the industry. Subsequent papers, slated for release this week, address issues including disparities in ownership, pay equality, branding and access to capital. 

Only 8% of cannabis CEOs are women. The paper says this “grass ceiling” reflects many of the same factors which feed gender disparities in the mainstream economy, as well as several unique to cannabis: 

• According to Marijuana Business Daily, in 2019 women held 37% of cannabis C-suite positions, substantially more than in other industries.
• While the data isn’t comprehensive, it’s likely that female executives disproportionately fill roles like head of HR, general counsel and chief risk officer which are less likely to lead to the top job than other c-suite positions.
• This reflects what it calls an “often intentional” segregation of women away from the most desired career tracks.
• “The adult use market is full of characters who (may have) never worked in a professional setting and it shows,” in how they treat women, Nicole Foss, a vice president at NeXtraction said. The report quotes her saying that in her experience the hemp sector, where she now works, is more professional.

Gail Rand, CEO of Grand Consulting, a financial advisory serving cannabis companies, and co-lead author of the white papers, said the industry’s relative youth gives it the opportunity to set an example for corporate gender parity. Among other reasons, it lacks the decades-old (legal) social networks which help men advance their careers.  

• At 8%, cannabis actually has a higher rate of female CEOs than most other industries. Rand suggests this may owe to the prevalence of executives who joined the industry for advocacy reasons. (She became interested in cannabis to seek treatment for her medically complex child.)  

Male-dominated boardrooms have received scrutiny for decades and they’re not going to disappear overnight.

• The paper explicitly ties success at elevating women to leader to parallel missions to support the rise of racial and sexual minorities: “We will only have gender parity in the c-suite once we implement anti-racist practices in our own businesses.

It also makes several recommendations for companies seeking to address these issues: 

• They include creating ways for employees to report inappropriate behavior without fear, such as a “buddy system,” where an employee can raise a concern with a designated colleague, who then reports it. California brand Garden Society says its buddy system has also helped enforce covid-related safety measures.
• Additionally, the paper recommends that companies should rigorously track their history of hiring and promotions to better understand its track record of who gets ahead.
• To build more diverse companies, the report says, “White womxn in power should center mentorship as an effective equity strategy, offering an advisory role to their marginalized counterparts.”   

On Friday February 5, a free webinar at 11 a.m. PT will discuss the industry’s gender disparities.

Read the original Article on WeedWeek.

Benzinga's Related Links: 

• 14 Cool Women In Cannabis Who Are Making A Difference
• Women's History Month: The Women of Cannabis Advocacy And Legalization
• Más de WeedWeek en español en El Planteo