Marijuana and gender equity: Why cannabis industry is a magnet for women executives
The new and flourishing business of cannabis is drawing large numbers of women execs. Why does marijuana draw a higher percentage of women than many other industries?
Of all the industries that attract American women to their senior ranks, the marijuana business may not immediately spring to mind as a likely magnet.
But women fill 36 percent of executive positions in US companies that grow, test, sell, and market pot products in this ballooning, multi-billion-dollar industry. It was spawned by the legalization of the plant for medical or recreational purposes in 26 states plus the District of Columbia (including recently passed ballot measures).
In some sectors of the marijuana business, the numbers appear to be more striking. According to a survey of 632 cannabis executives and professionals conducted by the Marijuana Business Daily in 2015, women are in leadership positions in 63 percent of labs that test cannabis potency and safety, and in nearly 50 percent of companies that make and sell cannabis-infused foods and other products.
How does that compare with the gender ratio in other industries? Among venture capital-financed, high-growth technology startups, just 9 percent are led by women, according to a July 2016 Harvard Business Review article. Women are majority owners of 36 percent of small businesses, they filled 22 percent of senior management positions in mid-size US companies, and 5.4 percent of CEO jobs at Fortune 1000 companies in 2014, according to a 2015 Pew Research report.
"[The data tell] a really great story about what’s happening in the cannabis industry, and it tells a really stark story about business overall," says Taylor West, deputy director of the National Cannabis Industry Association in Washington, which represents 1,100 businesses nationwide. (Despite the progress, though, she points out that women comprise half of the US workforce so gender parity still hasn't been achieved in the pot industry.)
Why are women shattering the glass ceiling in some segments of the marijuana industry? Some observers say this business draws liberally minded rebels who are less likely to uphold gender traditions. Also, Ms. West notes that the legal pot business is brand new, and therefore unhampered by established business networks that in other industries seem to be navigable only by insiders.
"In long-established industries you have generations of business that has been dominated by men, and that creates structures of advancement that are dominated by men," she says.
Yet in other areas of the cannabis industry, particularly in cultivation and investment, women leaders remain sparse. While the Marijuana Business Daily survey indicates that 28 percent of executives in the marijuana investment industry are women, Greta Carter’s experience doesn’t jibe with those findings.
"I walk into a room and time after time it’s 20 men and me," says Ms. Carter, who is an investor in 10 companies in Nevada and California that grow, process, and sell cannabis, and is a consultant to pot startups. "I don’t want to give the country a fallacy that there’s not a glass ceiling in the industry because there is," she says.
Carter, a former vice president at Citibank, has observed that most women in top positions work for businesses that support the pot-growing industry, including packaging, marketing, advertising, design, law, and accounting. "I think it’s because the threshold to get into this industry is really low if you’re in the ancillary businesses," she says. Unlike these support services, wholesale cultivation requires heavy capital investment and more risk tolerance, which some say could be drawing more men entrepreneurs. Also, women, particularly mothers, might shy away from growing because there is a stigma associated with it.
"The stigma is something that we continue to fight and are going to have to continue to fight," says Leah Heise, an attorney; chief executive of WomenGrow, a membership organization for women cannabis entrepreneurs; and, pending final state approval, a potential dispensary owner in Maryland.
Even if women aren't flocking to pot farming and are underrepresented in the pot investment community, their high percentages in ancillary businesses and test labs is seen by some as gender equity progress. These two sectors are the most profitable of the pot businesses, according to Marijuana Business Daily. And in the experience of one pot-industry investment firm, the Arcview Group, the few women-led companies that do win investor funding tend to secure much more of it.
"There’s no doubt that the female-led companies are raising a lot more money," says Arcview CEO Troy Dayton. Of the $103
million that the firm has invested in 137 marijuana startups, $31 million, or 30 percent, went to women-led companies, Mr. Dayton said. The company has invested an average of $1.2 million in each of 26 woman-led firms, compared with its overall average investment of $752,000 per company.
The bottom line in cannabis is that women leaders have a foothold in this young and flourishing industry, which is encouraging, says West. "The good thing is that women in an industry tend to beget more women," who will help each other rise through the ranks.
"And that’s certainly different than the more conservative, old boys network that you might associate with a traditional industry," says West.