Cannabis industry remains male-dominated, but changes could be coming

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Though cannabis is becoming more mainstream across the country, the industry continues to be male-dominated, making it a struggle for female entrepreneurs to break the so-called grass ceiling. Only about 22% of cannabusinesses nationwide are woman-owned, according to a recently released survey of industry professionals by trade news publication Marijuana Business Daily.

In the C-suite, the percentage of women executives in the space only grew by a percentage point to 23.1% over the past year. They also continue to lag behind men when it comes to staff-level jobs in cultivation/manufacturing (44%) and retail (47%), the survey found.

With less access to funding and fewer resources, including mentorship and strategic guidance, combined with sexual harassment and sex and gender-based discrimination, the National Cannabis Industry Association says it’s unlikely the gap will close anytime soon.

Despite the current landscape, many believe there is opportunity for women in the nascent industry. And, as New Jersey works to establish a legalized marketplace that is fair and equitable, there is a growing push to help underrepresented populations, such as women and minorities, establish themselves.

“Regulatory hurdles are complex and constantly changing on both the state and municipal levels, making pivoting and adapting to changing circumstances imperative,” said Jessica Gonzalez, a well-known cannabis advocate and Jersey City-based attorney. “Add in broader barriers, such as social and cultural stigma and lack of education on the cannabis plant and legal policy, and success in the industry can be hard to achieve without proper support.”

In New Jersey, where real estate inventory is limited and an estimated 80% of the state’s 564 municipalities have opted out of recreational sales, finding a place to set up shop is a huge challenge.

Capital is also hard to come by. Since marijuana is still classified as a Schedule I narcotic by the federal government, many banks will not provide loans for businesses related to cannabis. The space also remains dominated by multistate operators, making it difficult for small entrepreneurs to establish themselves because they don’t have the resources and experience that larger ventures do.

“It’s extremely expensive to enter and survive in this industry, and given the limited capital options, you are forced to seek private investors – which opens a whole can of racial and gender bias. The need to stay capitalized, coupled with constantly changing regulatory environments, expensive service professionals, lack of real estate, a social stigma and IRS tax code 280E, creates high barriers to entry and high survival barriers,“ Gonzalez said.

“Many aspiring cannapreneurs are entering the industry without fully knowing the rules to the game they’re asking to play. With constantly changing laws, rules and regulations, getting lost in the waves of misinformation is easy. Without a complete understanding of what it takes to operate a cannabis establishment, they are vulnerable to predatory practices that plague this industry,” she explained.

Getting up to speed

After being retained as a consultant by the New Jersey Business Action Center to develop a no-cost training program, Gonzalez and her firm, Veridis Quo LLC, put together an offering designed to increase the number of diverse cannabis business owners by providing them with the tools needed to overcome challenges.

Set to launch in the first half of 2023, the Cannabis Training Academy will provide technical assistance, training and mentorship to recreational cannabis license applicants in the social equity, legacy, impact zone, diversely owned and microbusiness categories

Designed as a 10-week program, the Cannabis Training Academy will walk applicants through everything they need to know to complete a cannabis application. As an asynchronous learning model, it accommodates different learning styles, allowing students to progress in their own way and time.

“All educational content will also be available in Spanish which is something we rarely see in other technical assistance programs. Applicants will learn how to fill out complex applications, obtain municipal approvals, prepare a business plan, draft standard operating procedures, and understand how to work with other vendors and government agencies,” Gonzalez explained. “All classes will be taught by highly vetted and trusted instructors who are in or have supported, taught or consulted about the cannabis industry.”

Additionally, mentors will be available to answer questions and provide non-legal direction, according to Gonzalez.

“The truth is that women in any industry have historically faced challenges. Thanks to NJBAC’s Cannabis Training Academy, a successful career in the cannabis industry is achievable, whether one wants to touch the plant or not,” she said.

Gonzalez went on to point out successful female entrepreneurs, including Precious Osagie Erese, chief operating officer of Roll Up Life, the first black-owned delivery and logistics cannabis company in New Jersey; Suzan Nickelson, chief executive officer and founder of Holistic Solutions, the first black-owned majority operator in the state; and Lisa Sanchez, founder of online platform VisineQueen.

With the growing awareness around a lack of both gender and racial diversity in the rapidly developing and expanding cannabis industry as a whole, New Jersey regulators say they want to address those gaps.

Since the New Jersey Cannabis Regulatory Commission issued a notice of application in late 2021, it has received 1,647 applications for Class 1 (cultivator), Class 2 (manufacturer) and Class 5 (retailer) licenses. Of those applications, 72% are categorized as diversity-owned, 25% as social equity and 43% as impact zone.

Currently, New Jersey has 24 medical and recreational dispensaries and 11 medical-only dispensaries. With roughly one dispensary per 100,000 residents, the state has the lowest per capita store count of any adult-use market. On the supply side, New Jersey has 17 cultivation facilities – six that are medical only and 11 that can grow for recreational use as well as medical – also far below other states.

As part of an effort to spur development and encourage diversity, the CRC recently implemented several changes, including letting the state’s cap on the number of cultivation licenses expire and improving the overall licensing process.

Additionally, the regulatory board ended the state’s ban on certain vertically integrated businesses, as well as adjusted the criteria for priority applicants to require that all social equity, diversely owned businesses and impact zone applications for annual and conversion licenses be reviewed first.

Gonzalez applauded the state’s move to prioritize those applicants, as well as the New Jersey Economic Development Authority’s new Cannabis Grant Equity Program, which will provide grants of up to $250,000 for aspiring cannaprenuers.

“At the state level, New Jersey is taking major steps toward establishing a fair and equitable industry with low application fees, a prioritization process, allocating the majority of tax revenue toward impacted communities and partnering with state agencies to provide education and grants,” Gonzalez explained.

“However, no matter how much good is done at the state level, until the municipalities embrace the cannabis industry, it will be difficult to establish a fair and equitable industry. How this industry shakes out will be largely dependent on the behavior of municipalities,” she said.

“Municipalities can cap licenses, limit zoning, charge ‘reasonable’ fees and create their own application process,” Gonzalez said. “There is a complete lack of transparency and consistency across all municipalities. Even worse, there is little recourse for applicants vying for local approval when towns fail to apply ordinances equally. With no protection against municipal retribution, applicants have difficulty keeping municipalities accountable.”

According to a report by cannabis employment platform Vangst, 52.4% of cannabis business leaders consider regulations and compliance as their top challenge, followed by inflation and federal prohibition.

Nonetheless, industry leaders are optimistic about near-term sales and revenue compared to the overall U.S. economy, with 65% of cannabis executives saying they expect sales to increase in the next six months despite the broader economic uncertainty.

Due to federal regulations, access to capital has always been hard to come by for cannabis businesses and many of those companies never had the luxury of unlimited resources, making the space a “scrappy industry,” and one that is more prepared than other sectors to handle an economic downtown, the report noted.

However, “any coming recession is just another reminder that cannabis leaders should be building profitable businesses that are not reliant on endless rounds of funding,” it stated.

‘Finding your champions’

While mentorship and networking opportunities are often lacking for women in the industry, Gonzalez noted “a significant uptick in women-centric conferences and events led by women-owned organizations.”

“We operate in an industry that is extremely community focused, so finding your champions is imperative,” she explained. “Women face an incredible amount of bias in the cannabis industry. The fewer women leaders you see, the fewer people believe women should be leaders. Men dominate this industry. Go to any networking event that isn’t women-centric, and you’ll find that most attendees are men. This makes it difficult for women to easily find mentors, cheerleaders, role models etc. We must actively and intentionally seek each other.”

“Additionally, we are forced to be highly protective of our space and cautious in how we move when our spaces are primarily made up of men,” said Gonzalez. “I have stories from women that range from quid pro quo situations to full on sexual harassment. Personally, I’ve had to ask many men ‘Would you ask a man that question?’ It’s the mental load of having to put your best foot forward while always keeping your guard up.”

In addition to being a cannabis champion, Gonzalez is working on behalf of marginalized groups, helping them to enter the highly competitive industry. Her background includes leadership positions in organizations such as the International Cannabis Bar Association, Minorities for Medical Marijuana and the Minority Cannabis Bar Association’s policy committee.

Gonzalez also encouraged aspiring entrepreneurs to stay educated about the industry – on the national, state and local levels.

“Leverage the skills you currently have and determine how to apply those skills to this industry. You do not need to be a license holder to succeed in this industry, not everyone wants to be. Start working with the cannabis community and support those who paved the way. Figure out what type of advocate you want to be and leverage your expertise to propose solutions. There is an enormous amount of opportunity, and we’re barely scratching the surface of this industry, so don’t feel like it’s too late,” she said.

For more information about NJBAC’s Cannabis Training Academy, click here or call 1-800-JERSEY-7.