Promoting Diversity in Cannabis Supply Chains: Q&A

Want to fix the diversity gap in cannabis? Here’s what you need to know:

Right now:

Only 17% of cannabis executives are minorities
81% of business owners are white
Women-owned businesses get less than 1% of VC funding
Market growing from $13.4B to $148.9B by 2031

Key Challenge	Current Solution
High entry costs	State grants & loans
Limited networks	Industry partnerships
Knowledge gaps	Free training programs
Banking access	SAFE Banking Act

What’s Working:

Massachusetts: $300K yearly for training
Oakland: Grants + legal help + shared spaces
New York: 50% of licenses for equity applicants
Illinois: Set portion for minority owners

Bottom Line: The cannabis industry needs diversity now – before big corporations take over. States and companies are creating programs to help minorities, women, LGBTQ+, and veterans enter the market.

Group	Business Impact
Diverse suppliers	133% higher ROI
Operating costs	20% lower
Added value	$3.6M per $1M spent
Market potential	$1.3T untapped revenue

This guide shows exactly how companies can build inclusive supply chains and measure real results.

What Makes a Supply Chain Diverse

The cannabis supply chain needs different types of business owners. This includes minorities, women, LGBTQ+ individuals, veterans, and people from communities hurt by drug laws. Here’s what the data shows:

Group	Current Industry Representation
White-owned businesses	81%
Minority executives	17%
Women-owned businesses	Less than 1% of VC funding
Minority-owned businesses (2017)	19%

These numbers point to a big gap in who owns and runs cannabis businesses. But states are stepping up with programs to fix this:

State	Program	Impact
New Jersey	Social Equity Program	Prioritizes disadvantaged areas, women-owned, and veteran-owned businesses
Colorado	Accelerator Program (2020)	Helps War on Drugs-impacted communities enter the industry
Illinois	License Distribution	Set portion of licenses for low-income and minority individuals
Oakland, CA	Cannabis Equity Program	Offers grants, legal help, and shared manufacturing spaces

Three main barriers keep diverse suppliers out:

High licensing fees
Limited access to money
Lack of business connections

"Cannabis [and the War on Drugs] has harmed Black and Brown communities. There’s the important focus of trying to make sure that as we do legalize, that these groups don’t get left behind." – Tahir Johnson, Director of Social Equity and Inclusion at the Marijuana Policy Project

Some companies are making changes. Take Trulieve‘s Supplier Diversity Initiative. They help minority, LGBTQIA+, women, and veteran business owners become suppliers. They’ve already beaten their state’s 20% diversity goal for supplier contracts.

Here’s how the industry tackles these challenges:

Problem	Solution
High entry costs	State-funded grants and loans
Limited networks	Partnerships with groups like National Minority Supplier Development Council
Knowledge gaps	Free training and mentorship programs
Limited resources	Shared manufacturing spaces and equipment

How Diverse Supply Chains Help

The numbers tell a clear story about diverse supply chains in cannabis:

Business Impact	Result
Return on Investment	133% higher than traditional suppliers
Operating Costs	20% less on buying operations
Added Value	$3.6M per $1M spent
Market Reach	$1.3T untapped revenue in mid-sized minority businesses

Money in Local Communities

Working with diverse suppliers creates a ripple effect. Here’s the direct impact:

Community Benefit	Impact
Job Creation	2.2M jobs from minority-owned businesses
Economic Output	$400B+ from certified minority businesses
Women-Owned Revenue	$1.8T with 9.4M employees
Veteran-Owned Impact	$1.14T economic contribution

New Ideas That Drive Growth

The data shows it: minority-owned businesses bring 11% more new products or services to market. Here’s what this means for cannabis companies:

Business Area	Impact
Product Development	Fresh market solutions
Market Understanding	Direct access to growing consumer segments
Supply Chain Options	Reduced single-source risks
Risk Management	Built-in backup suppliers

Market Performance Boost

The numbers don’t lie – diverse suppliers boost business results:

Consumer Response	Impact
Brand Value Perception	45% more likely to see brand as inclusive
Brand Favorability	25% higher positive views
Product Usage Intent	49% more likely to use products

"When you invest in women, they put their earnings back into the community", – Jenny Grieser, Senior Director of Walmart’s Women’s Economic Empowerment initiative

The Market Is Shifting:

Minority groups become the majority by 2045
Minority buying power reaches $3T by 2030
70% of buyers pick brands that match their values

Look at Google: They partner with businesses owned by minorities, women, LGBT individuals, people with disabilities, and veterans. This brings in new perspectives and opens doors to more customers.

Common Roadblocks

Challenge Type	Impact	Current State
Legal Barriers	License fees jumped from $60K to $146K	Florida limits: 22 companies
Financial Access	Under 2% ownership by people of color	No bank access at federal level
Market Entry	Black ownership fell from 28% to 13.1%	81% white ownership in 2022

The cannabis industry faces three big problems: high costs, banking limits, and tough rules. Let’s break these down.

Rules and Laws

Each state has its own set of rules that make it hard to get started:

State	Minority Business Stats	Key Requirements
Colorado	2.7% Black-owned businesses	Must control growing and selling
Michigan	3.8% Black-owned businesses	Special packaging rules
Nevada	5.1% Black-owned businesses	Local rules to follow
Massachusetts	73% white ownership	Social equity: only 11 of 143 licenses went to program

Money Problems

Here’s what it costs to get started:

Financial Requirement	Cost Impact
Dispensary Startup	$250,000+ to begin
Warehouse Costs	$100,000+ per year
Application Fees	Up to $146,000 (no refunds)
Banking Services	Almost none available

"You can’t run a business without banks. You need basic things like a business account, credit cards and loans just to keep the doors open." – Harrington, Viola Brands CEO

Learning Curves

New business owners must learn a LOT:

Area	Challenge
State Rules	Different rules for each state
Operations	Must know growing AND selling
Compliance	Complex health and safety rules
Supply Chain	Managing products across states

"People with past marijuana charges often can’t work in leadership roles – the same people from Black and brown communities who got hit hardest by drug laws." – Nikki Fried, Agriculture Commissioner

The SAFE Banking Act might fix some problems by letting cannabis businesses use regular banks. Groups like 40 Tons help by running job fairs and training programs.

"I had to act when I saw unfair jail sentences and lack of industry diversity hurting my community while others made money from cannabis." – Loriel Alegrete, 40 Tons CEO

What Experts Say

Here’s what’s happening in cannabis supply chains and business practices:

Supply Chain Programs That Work

Check out how different states handle cannabis business access:

State Program	Key Features	Impact
California Equity Act	Technical assistance, funding support	Helps past cannabis offense victims enter industry
New York Social Equity	50% licenses for equity applicants	Prioritizes minority, women, veteran businesses
Michigan Social Equity	Fee reductions, resources	Helps communities hit by marijuana convictions

The Business Case for Inclusion

The numbers speak for themselves:

Success Factor	Results
Gender Diversity	14.1% return on equity (vs 11.2% without women board members)
Ethnic Diversity	35% higher financial performance
Employee Retention	87% lower turnover with inclusive practices

"The cannabis industry gives us a clean slate. We can build it right from the start." – Melanie Davis, Chief Operating Officer of The People’s Ecosystem

Support Programs That Make a Difference

Here’s who’s helping minority business owners succeed:

Support Program	Services
MCBA Accelerator	Business training for equity owners
Last Prisoner Project	Professional training, reintegration help
Honest Jobs	Fair chance hiring programs

Look at The People’s Ecosystem – they launched 57 product SKUs while others struggle to launch one.

"The boring stuff – policies and procedures – that’s what makes inclusion work." – Erin Gratton, Independent HR Practitioner

Want to make changes? Start here:

Drop degree requirements from job posts
Create Employee Resource Groups
Monitor hiring diversity numbers
Start mentorship programs
Team up with local organizations

"Policies need action. They’re just paper until they become behavior." – Sarah Kabakoff, Head of Sales for Dutchie

Making It Happen

Supplier Programs

Here’s what works in cannabis supplier diversity:

Program Component	Implementation Steps	Expected Results
Certification Support	Guide suppliers through MBE/WBE process	More qualified suppliers
Contract Set-Asides	Dedicate 15% of spend to diverse suppliers	Direct money to minority businesses
Financial Aid	Provide micro-loans and bonding help	Cut entry costs
Mentorship	Pair new suppliers with veterans	Boost business know-how

Want to start? The National Minority Supplier Development Council (NMSDC) helps set up these programs. Certification starts at $300.

Teaching and Training

M4MM runs these hands-on programs in 28 states:

Training Type	Focus Areas	Duration
Business Skills	How to run ops, stay compliant, handle money	12 weeks
Technical Support	Making products, testing methods	8 weeks
Market Entry	Getting licenses, following rules, making sales	6 weeks

The National Diversity & Inclusion Cannabis Alliance (NDICA) takes it further with job training:

Supply chain basics
Quality testing skills
Rules and compliance
Leading teams

Using Resources Well

Here’s how to split your budget:

Resource Type	Budget %	Purpose
Direct Support	40%	Money for suppliers, cert costs
Training	30%	Teaching skills, mentoring
Program Management	20%	People, tracking, reports
Marketing	10%	Finding suppliers

Money talks: Companies plan to spend 50% more on diversity by 2025 (Hackett study). Look at Illinois – they’ve handed out hundreds of licenses through their equity program.

Want to start? Here’s how:

Team up with cert groups
Pick your spending goals
Watch supplier results
Build mentor teams
Share progress every 3 months

"The boring stuff – policies and procedures – that’s what makes inclusion work." – Erin Gratton, Independent HR Practitioner

Tracking Results

Here’s how top cannabis companies measure their supply chain diversity progress:

Metric	Measurement	Goal
Budget	Diverse supplier %	15-25%
Vendors	MBE/WBE certified count	+20% yearly
Employment	New jobs at diverse suppliers	500+ per state
Local Impact	Spend staying in community	40-60%

The numbers don’t lie: The NMSDC found minority businesses grow 17% annually, creating 2.2 million jobs in just 2013-2014.

Want to know if your program’s working? Here’s what to track:

Focus Area	What to Measure	Frequency
Vendors	Active diverse suppliers	Monthly
Spending	Distribution by supplier type	Quarterly
Loyalty	Supplier retention rate	Yearly
Products	New items from diverse vendors	Monthly

"You need to learn to speak the language of the business." – LaTisha Brandon, The Container Store

Let’s look at what’s happening in the industry:

Nevada’s cannabis study exposed a big problem: most owners are white men. But some programs are changing this.

Oakland’s Cannabis Equity Program shows what works:

Money for hiring
Legal support
Help buying property
Shared production spaces

Illinois backs this up – they’ve handed out hundreds of licenses through equity programs since 2020.

Want a quick way to check your progress? Here’s the math:

Take your diverse supplier spending ÷ total spending × 100

For example: $10M diverse spend ÷ $1B total = 1%

If you get 1%, you’ve got work to do.

Track these results over time:

Timeline	Check	Purpose
1 Year	Cost impact	Business benefits
2 Years	Market growth	Return proof
3 Years	Community benefits	Social impact
5 Years	Industry shifts	Future planning

Working Together

The cannabis industry needs strong partnerships to grow. Here’s how different organizations make it happen:

Smart Team-ups

NCIA shows how to do it right with their Equity Scholarship Program. Since June 2020, they’ve helped over 250 social equity operators with:

Benefit	Details
Cost Savings	80% off membership dues (2 years)
Event Access	Free passes to NCIA events
Marketing	Special promotional chances
Education	Full training programs

Massachusetts backs this up with state-level action:

Program Element	Investment
Training Budget	$300,000/year
Focus Areas	Ownership, Management
Target Groups	Past offenders + families
Skills	Business + job training

Success Stories

Oakland’s program shows what works:

Support Type	Program Details
Financial	Workforce development grants
Legal	Free legal consulting
Real Estate	Property buying help
Operations	Shared manufacturing space

"Together, we are building the cannabis industry day by day, in real-time, and we are uniquely positioned to build from the ground up and diversify right out of the gate!" – Melanie Davis, Chief Operating Officer of The People’s Ecosystem

Making Progress

Pennsylvania uses a point system for permits:

Area	Points	Current Average
Diversity Plan	10% of score	41.44/100
Business Types	50 dispensaries	–
Processing	25 grower permits	–

Green CulturED helps new workers through:

Program	Details
Monthly Lottery	Free course access
Business Program	50% off team training
Focus	BIPOC, LGBTQIA+, veterans

The facts speak for themselves:

81% of cannabis owners are white
Companies with mixed leadership teams make 19% more from new products
Teams should match local demographics (Like Nevada: 29% Hispanic population vs 16% Hispanic ownership)

What makes partnerships work:

Clear goals with numbers
Focus on local needs
Monthly progress checks
Success story sharing
Money and training support

What’s Next

The cannabis industry is changing fast in 2024. Here’s what you need to know:

Key Industry Changes

The biggest updates hitting the cannabis space:

Change	What It Means
SAFER Banking Act	Banks can now work with cannabis companies
Farm Bill Update	Clear rules between hemp and cannabis
NY License Program	Half of licenses go to equity applicants
GO-Biz Grants 2024-25	Money flows to local cannabis programs

States are pushing hard for diversity in cannabis:

State	What They’re Doing
California	New equity laws help groups hurt by prohibition
Illinois	Social equity focus in hiring and ownership
Massachusetts	Companies must hit specific diversity targets
New York	40% of cannabis taxes fund education

"Compliance isn’t getting easier anytime soon because of links to illegal activity." – Erin Moffet, The Liaison Group

Market Snapshot

Here’s where the industry stands:

What’s Happening	Now	Next
Medical Cannabis	37 states say yes	More states joining
Who Owns Cannabis	8 in 10 owners are white	Equity programs growing
Arrest Numbers	Black people arrested 3.73x more	Focus on clearing records
Getting Licenses	Hard for equity applicants	50% going to equity

What companies must do:

Hit 40% equity hiring goals
Create community plans
Join local equity efforts
Keep hiring data
Show real progress

"Get ready for more rules – they’re coming whether you like it or not." – Ryan Palmquest, First Citizens Bank

The industry’s top needs:

Need	How to Fix It
Bank Access	Roll out SAFER Banking
License Help	Support equity applications
Money	Give grants, cut fees
Training	Teach business skills
Legal Aid	Help clear records

Expert Tips

Here’s how top cannabis companies build better supply chains:

Action	What To Do	Results
Set Clear Goals	Stock 30-40% minority-owned products	The Heritage Club hits 33% diverse brands
Do Your Research	Check actual brand ownership	Stops fake diversity claims
Team Up	Work with MCBA	Connect with 15+ industry pros
Make Space	Give shelf space to equity brands	Opens doors for new companies

"My equity license lets me help other brands that can’t get shelf space." – Whitney Beatty, Josephine and Billie’s

Connect With Partners

Here’s what works:

Strategy	How	Outcome
Go to Events	Black CannaBiz expo	Meet POC business owners directly
Start Local	Partner with equity license holders	Build strong local ties
Join Groups	Sign up with MCBA	Access to 15+ board members
Check Brands	Look for community programs	Build long-term partnerships

"I want to help other Black entrepreneurs break into this industry." – Nike John, The Heritage Club

Use Resources Wisely

Smart moves that work:

Resource	What To Do	Impact
Store Space	Give 30%+ to minority brands	Helps small brands grow
Education	Host supplier training	Better partnerships
Promotion	Tell minority brand stories	Boosts brand awareness
Local Focus	Back equity programs	Builds community trust

"We focus on education through our collaborations. This gives people the basic knowledge they need about cannabis and starting a business." – Ernest Toney, BIPOCANN

Track These Numbers:

% of minority brand sales
Supplier diversity stats
Community program impact
Training completion numbers

Next Steps

Here’s how top cannabis companies build their supplier diversity programs:

Start Now

Want to boost your supply chain diversity? Here’s what works:

Action	What To Do	What You Get
Check Numbers	Look at your current diverse supplier spending	Your starting point
Start Small	Add a few diverse suppliers each quarter	Early wins
Change Rules	Make 25% diverse suppliers required in RFPs	More opportunities
Get Help	Bring in someone to run your program	Better results

"Going slow helps you go far. You need time to get everyone on board – and you’ll need to keep working at it." – Harry Haney, Supply Chain & Sustainability Center, Loyola University Chicago

Future Plans

Here’s what to do next:

What	How	Why
Money	Put 5% aside to help suppliers grow	Stronger partners
Teaching	Run supplier training each month	Better skills
Numbers	Check diversity spend every 3 months	See what works
Local Help	Work with nearby equity programs	Bigger impact

"You need good systems in place. That’s how you build real diversity and inclusion." – Erin Gratton, HR Expert

Avoiding Problems

Watch for these issues:

Problem	Fix It By	Result
Big Costs	Make contracts smaller	More can join
Bad Data	Get tracking tools	Better info
No Support	Show the money benefits	More backing
Wrong Fit	Check suppliers first	Better matches

Keep Track Of:

How much you spend with diverse suppliers
How many new diverse suppliers you add
How many contracts get done
What suppliers think of your program

"These numbers show where you are, where to go, and how to get there." – Jessica Jackson, Cannabis Sustainability Expert

FAQs

What is DEI in the Cannabis Industry?

DEI in cannabis isn’t just a buzzword – it’s about making sure everyone gets a fair shot at success in this growing market.

Here’s what’s happening right now in cannabis DEI:

Program Type	What It Does	Example
State Programs	Fast-track minority business owners	Illinois’s 2020 minority dispensary program
City Programs	Give direct business support	Oakland’s hands-on help with grants and legal advice
Industry Groups	Help new owners succeed	NCIA’s training for new business owners
Company Programs	Put money where it matters	Flowhub‘s $8M for new dispensary owners

Let’s look at the numbers:

Year	Stat	Source
2017	19% minority-owned cannabis businesses	MJBizDaily
2021	Oakland’s program includes: – Cash for workers – Legal support – Help buying property – Shared workspace	Cannabis Equity Program

Kyle Sherman from Flowhub puts it straight:

"Entrepreneurs are struggling to get into cannabis, and there is disproportionate access to capital that others take for granted. It’s time we offer some form of reciprocity to those targeted by the War on Drugs."

Mike Lomuto at NCIA adds:

"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 programs aren’t perfect, but they’re a start. They’re helping build a cannabis industry that works for everyone – not just a select few.