The cannabis industry is going through some rough times. In conjunction with maintaining a healthy balance sheet through layoffs, cannabis companies deal with DEI initiatives. According to Business Insider, 50% of companies need more resources to make these initiatives work.
There’s fierce debate on whether these programs work. On the one hand, c-levels in the cannabis industry are primarily men, and programs need to be in place to promote more diversity, especially for the areas it serves. On the other hand, there’s an argument that these social equity programs lack viability due to poor processes, procedures, and costs, which can hurt more than help cannabis companies struggling to turn a profit during recessionary times.
One reason for DEI failures is the rules need to be thought out and written clearly. These can create significant roadblocks for smaller businesses. States who have set aside social equity licenses have stringent requirements that can prevent small cannabis players from taking advantage of these programs without a solid legal team to help them navigate the process. This process could create a two-tiered system that perpetuates disparities between the haves and have-nots. In addition, there needs to be more enforcement of these rules; many need help to eke out an existence.
DEI programs in the cannabis industry go beyond social equity programs and license allocation. There needs to be a push to hire a more diverse and inclusive workforce, especially at the C-suite levels. According to Venture Beat, companies that employ a diverse workforce are likely to have a thirty-five-percent improvement in their financials than their non-diverse counterparts. Diversity and inclusivity in your company culture can generate new ideas, perspectives, and approaches to tackle business problems, which can be a competitive advantage. Also, business leaders who employ these DEI tactics can look more attractive to customers, investors, and employees, which can help your cannabis business grow and succeed in the long term.
Implementing a truly diverse and inclusive working environment can be challenging. We all have our biases. Your company will need buy-in from all levels and continuous improvement processes to make DEI initiatives successful. Establish measurable goals and hold management accountable. Leadership needs to target underrepresented groups based on merit. Make sure when hiring diverse employees that it isn’t only a symbolic hire. When discrimination occurs, make sure to address the problem swiftly.
DEI initiatives aren’t a one-size solution. Different companies may have other challenges based on the demographics of their workforce. Implement solutions that focus on overcoming hurdles – access to traditional financing and procedures to deal with stringent regulations.
Businesses focus on profit. At first glance, DEI programs may seem to be a thorn in a business owner’s side when they deal with a mountain of problems every day. Leaders could take a short-term hit when adjusting their workforce, especially as layoffs mount in the industry. Implementing AI-driven tools can address profitability gaps during this time. A diverse and inclusive culture with well-thought policies can positively impact your short and long-term bottom line.
If you want to know how AI can help drive top and bottom-line growth for your cannabis company, schedule a discovery call here.