Cannabis CEOs Are White Men, Just Like in the Rest of Corporate America

(Bloomberg Businessweek) -- When Nancy Whiteman, 61, founded her marijuana edibles company, Wana Brands, almost a decade ago in Boulder, Colo., the legal industry was relatively diverse and dominated by local startups. It helped that Wall Street banks and institutional investors took a hands-off approach to cannabis, leery of getting involved with a drug that’s still banned by the federal government. “It was a pretty even playing field for everybody—men, women, anybody who was interested,” Whiteman says.

These days, however, the industry is increasingly dominated by men. The influx of venture money and Wall Street dollars, in addition to the rise of larger companies operating across several states, has made things harder for startups and, by extension, female-led businesses. In 2015, 36% of pot executives in Colorado were women, but just two years later that dropped to 27%, according to Marijuana Business Daily. Some in the industry fear the same lack of diversity that’s characterized such sectors as finance and technology will become the norm for the fast-growing pot world.

“It’s the double-edged sword of capitalism,” says Fahed Sultan Al Essa, a graduate student at the University of California at Berkeley’s Haas School of Business who’s researching the cannabis industry and hosted an inaugural summit on gender diversity in the sector earlier this year. “As the industry gets more and more appealing, more money comes in and sexism comes in.”

Women in the industry interviewed by Bloomberg say they’ve experienced sexism, from being told to dress in heels and a skirt for a meeting with investors to being asked when they plan to have children and having questions redirected to male colleagues.

Among the 20 most valuable publicly traded cannabis companies in the U.S. and Canada, there are only two female chief executive officers and not a single chief financial officer. There’s also a noticeable lack of women on boards: At those same businesses, just 13% of board members are women, compared with roughly 31% for the top 20 banks. Six of the top marijuana companies have no female board members. “The boards are mostly made up of old white guys,” says Jeannette VanderMarel, who founded Green Organic Dutchman, a Canadian pot company worth more than $600 million, and is now co-CEO of Toronto-based 48North Cannabis Corp. “A glass ceiling certainly already exists.”

Ontario-based Canopy Growth Corp., the world’s most valuable cannabis company, has only one woman on its board. Boosting diversity at Canopy is part of the mandate of Hilary Black, an industry veteran who joined the company in 2015 and was named chief advocacy officer earlier this year. She says the dearth of women and minorities in cannabis is mostly because the nascent industry is so focused on growth.

“When people criticize Canopy and the industry for the lack of diversity, it’s important to understand that it’s not something that happened consciously,” Black says. “It’s not like there was a group of men sitting in a boardroom stroking their beards going, ‘Hmm, how are we going keep all the ladies out of this?’ It’s a matter of how fast everything grew.”

Weed was dominated by men when it was strictly a black-market business; as the legal industry has evolved, some of that gender imbalance has lingered. Some pot companies, including ones run by women, are trying to make the business more female-friendly, with executives frequently talking about pulling in customers from outside the base of stoner dudes, who buy the lion’s share of weed. But even with the focus on soccer moms and professional women looking to swap chardonnay for a vape pen, there are still concerns that female founders and executives are getting pushed aside.

“I’ve watched one woman after another take in some type of capital or partnership deal for her business, and next thing you know she’s no longer the CEO,” says Jessica Billingsley, co-founder and CEO of Akerna Corp., which provides consulting services and compliance software to the cannabis industry. It recently became the first female-led cannabis business to list on Nasdaq. “It’s a discouraging trend.”

VanderMarel says that’s pretty much what happened to her. She lost her daughter to Dravet syndrome, a rare form of epilepsy, and became an advocate for medical access to cannabis after seeing a mom use it to help boost her son’s appetite during chemotherapy. She and her husband built an indoor pot farm and founded Green Organic Dutchman in 2012. After the company won a sought-after Canadian license to produce weed in 2016, as legalization for recreational use approached, venture capitalists became controlling shareholders and eventually installed a CEO. VanderMarel says she decided to leave after her responsibilities were diminished to a part-time role.

Now she shares the CEO role with Alison Gordon at 48North, which has three female board members. While VanderMarel is hopeful corporate cannabis can turn the tide on its gender problem, she acknowledges it will be difficult. “It’s an uphill battle,” she says. “It takes years to change boards.” —With Sam Unsted

To contact the editor responsible for this story: James Ellis at jellis27@bloomberg.net, Craig Giammona

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