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Is The Cannabis Industry Repeating Silicon Valley’s Worst Mistakes?

Some of the issues keeping entrepreneurs of color out of the cannabis industry are unique to the cannabis industry. But many others aren’t.

 

 

NE oft-cited statistic about the cannabis space claims that women hold 36% of leadership positions in the industry, higher than the 22% average across all U.S. businesses. That figure was first published in 2015, but it’s hard to know where it stands at the dawn of 2018; sales of legal marijuana hit $6.7 billion last year and are projected to exceed $20 billion by 2021.

Like digital technology two decades ago, legal cannabis is a new industry that’s being built rapidly from the ground up, meaning its norms and culture aren’t yet fixed. Yet Ebony Costain, the founder and CEO of BDTNDR, a job-training platform for cannabis workers, believes that if cannabis is any friendlier to women than Silicon Valley, then “it’s definitely a white-women space.” As she and other cannabis entrepreneurs of color see it, the reason is simple: By largely replicating the tech sector’s funding model, the nascent cannabis industry is importing many of the exclusionary practices that tech companies are still struggling to shake.

Spilft Battle

[Photo: courtesy of Eaze]

Big Money And Scant Access

Eaze is a California-based cannabis delivery service with more than $50 million in funding, which reportedly lost $1 million each month this year. Venture capital finds its way into every high-growth industry, so the fact that many cannabis startups are venture-backed and operating in the red is no surprise. But it’s one cause for concern among those who are looking to build an inclusive industry from the ground up.

For Sunshine Lencho, cofounder of Supernova Women, an Oakland, California–based advocacy group for people of color in cannabis, the prevalence of big VC money in the space is a sign that “we’re basically replicating a model from tech–and there’s no secret there as to who operates tech businesses.” She’s referring to the black women who see just 0.2% of VC funding overall despite being the fastest-growing group of entrepreneurs in the U.S., a problem rooted in the demographics of venture capital itself: Less than 3% of VC firms’ investment teams consist of people who identify as black or Latinx, and that small cohort reports greater difficulty getting investors to back the minority-led startups they’re excited about.

Source: Is The Cannabis Industry Repeating Silicon Valley’s Worst Mistakes?

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