Q&A: Canada’s Legal Cannabis Industry Has a Diversity Problem

October marked two years of legal cannabis for adult use in Canada.

The industry has launched billion dollar companies, but, according to a study published by the Centre on Drug Policy Evaluation and the University of Toronto in October, those leading the industry are overwhelmingly male (86%) and white (84%).

The study included 700 executives and directors across 166 licensed cannabis producers and 56 parent companies. It found that Black, Indigenous, other racialized minorities, and women are underrepresented in corporate leadership roles in the industry.

The report’s findings are sparking larger discussions in Canada. For example, some industry members say they were invited to a preliminary roundtable discussion with Health Canada, the country’s top cannabis regulator, in January. (When asked for comment on the study and potential actions taken since its publication, Health Canada pointed Cannabis Wire toward its expanded work with private sector partners, businesses and diversity advocates on the best ways and tools to support diversity and inclusion in the workplace. Though, it did not specify cannabis businesses.)

Among those invited to the roundtable was Keenan Pascal, founder and CEO of Alberta-based Token Naturals, a beverage and cannabis extraction company, who told Cannabis Wire that he has felt the system was stacked against diversity from the get go.

“You have to be well-connected to facilitate the licensing process in the industry. There’s a level of uncertainty in the sense that you first have to have your building secured, you have to have the financing, you have to basically be able to work with a collaborative group to get ahead in the industry, and I think that makes it where there’s a boys club aspect to it,” Pascal said. He noted that the government appears to be ready to listen, and he is hopeful actionable next steps will be created to better serve underrepresented communities.

Akwasi Owusu-Bempah, an assistant sociology professor at the University of Toronto, who co-authored the study, is thankful his research is prompting dialogue and emphasized the importance that all levels of government engage with racialized and other marginalized communities. He spoke with Cannabis Wire about his findings. (This conversation has been lightly edited for length and clarity.)

Cannabis Wire: Why was it important to conduct this study now?

Owusu-Bempah: We had an idea that was confirmed in our findings that certain groups, especially those who were criminalized under cannabis prohibition, were underrepresented in the legal industry. We wanted to empirically see, to the extent that we could, how race and gender influenced representation in the Canadian cannabis industry.

Cannabis Wire: Were you surprised by any of the findings?

Owusu-Bempah: Unfortunately, I was not surprised by the study’s findings. We know that Canadian legalization did not include the number of measures that had been incorporated into American legalization to try and foster inclusion in the legal industry. So it was not surprising for that reason, but it was certainly troubling.

We’ve got populations of people in Canada, mainly Black and Indigenous people, who have disproportionately suffered under prohibition. They had their lives irreparably damaged by criminal records stemming largely from simple cannabis possession offences. And that impacts their ability to gain meaningful employment, to travel, and, increasingly, to secure housing. And we know that that impacts not only the individuals who are criminalized but their families and their communities. The findings are troubling and, from our perspective, hopefully will prompt some positive change.

Cannabis Wire: What are some of the initiatives Canada can facilitate to increase diversity in the industry?

Owusu-Bempah: If we look south of the border, we have a number of jurisdictions, notably, California, Massachusetts, and, now, Illinois, where the government there, both at the municipal and state levels, have instituted mechanisms to facilitate inclusion in the industry. So these include specialized licensing schemes for people who can show that they have been directly impacted by prohibition. They could have criminal records, or they come from neighborhoods that have been over policed. So these are what are often considered to be equity applicants for equity licenses. There’s literally a whole category of licenses specifically for people who fall into this category.

We know the neighborhoods that have been disproportionately impacted by prohibition by looking at police arrest records. They’re not hard to identify. So the preferential licensing scheme is one example – either through dedicated licenses, or points allocated to equity applicants in a more general scheme.

What I like as well about what they’ve done in Massachusetts is that not only do they have these kinds of specialized avenues of entry, but they also provide a variety of support for equity applicants. They have resources available, such as providing help with accounting, or regulations. So if we realize that if prohibition has literally stripped certain types of capital and resources from affected communities, Massachusetts, for example, recognizes that and provides the kind of business and logistical support that would help an individual run a successful business. I think those are important. It’s not just a matter of providing dedicated avenues of entry, but also a framework for people to be successful.

Cannabis Wire: How can Canada make better use of its cannabis tax revenue?

Owusu-Bempah: I’ve been kind of advocating for three things to come from legalization. First, to repair the harms of prohibition, or what we might term cannabis amnesty, so clearing the criminal records of people who’ve been convicted of crimes that are no longer illegal. And we got a half measure [the Canadian government introduced a bill making it easier for people to obtain a pardon, or record suspension, for cannabis possession. Criminal records are sealed but not erased]. We didn’t get full expungement as we might have liked. But we have a system in place that we can work to improve.

The second is inclusion in the legal industry. And I think I should note that we’ve talked about what the government can do on the inclusion piece, but there’s also a role that the industry can play here too. We know that diversity is to the benefit of private corporations – both diversity of their workforce but also their boards. So I think there’s an onus here on private industry as well to work to diversify their workforces and their boards.

And then the third part is reinvestment of some of the tax revenue from legal sales back into those communities that were most harmed. The war on drugs has quite literally stripped much needed resources in forms of human and other capital from some of what were already our most marginalized neighborhoods.

What we’ve argued for is to see a portion of tax revenue generated from legal sales and legal cannabis related businesses to be reinvested into those very communities and into community centers, local healthcare centers, schools, jobs, skills and training programs to help kind of reinvigorate or rebuild those neighborhoods and those communities.

We need to recognize that we’ve literally spent billions of dollars criminalizing people and communities. Cannabis was both the most commonly used illegal substance up until legalization but it was also the one substance for which the most people were criminalized. We’ve spent billions of dollars fighting this war on drugs with devastating impact on certain communities so I think it’s only right, especially as we reckon with this kind of global reawakening of the impact of systemic racism and various forms of injustice, that we reinvest some of the money that we’re now making off of something we used to criminalize people for, back into the communities in which those people who were criminalized live.

Cannabis Wire: Do you have any final thoughts?

Owusu-Bempah: I commend the New York lawmakers, who while in favor of cannabis legalization, stalled or opposed previous attempts to legalize because they did not include important equity measures. I think the Canadian example shows us very clearly that unless equity is included from the get-go, it’s very difficult to achieve after the fact. My message to Americans would be to ensure that adequate equity measures are incorporated into legalization from the start.

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