One reason diversity has been so difficult to achieve is that most industries are established. The workers with the most experience began their careers when companies rarely discussed diversity, much less invested in it.
That’s what makes the cannabis sector so exciting: As its legal status shifts, we’re witnessing an industry grow up in a different environment. Most leaders today see the business value of diversity, though they may struggle to achieve it. Unconstrained by the old guard, can cannabis companies make more progress than their peers in other industries?
Cannabis-based companies lack diversity — but that’s not how experts think things will remain.
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To answer my question, I caught up with Jeff Billingsley, vice president of sales and marketing at Lunchbox Alchemy. Lunchbox Alchemy is a cannabis processing company that operates in Oregon and California.
I wanted to know how Billingsley perceives diversity in the cannabis industry and what he predicts the industry’s future holds.
Serenity Gibbons: The cannabis industry has received a lot of flak for its lack of diversity. Why do you think it’s so important in this sector specifically?
Jeff Billingsley: Cannabis is a nascent industry — at least the regulated side of it — and the early workforce is more homogeneous than we think is healthy. The U.S. market is projected to grow from $12.8 billion in 2019 to $30 billion in 2024. If we want to achieve that, we need to look at the user base and mirror that diversity.
I see parallels to the craft beer market, where the majority of the workforce is Caucasian men. Many say that it reflects craft beer’s current user base; to me, it just poses the question of whether it’s the cause or the effect.
If we want to serve a diverse user base, it’s critical that the cannabis industry reflect that in order to truly understand consumer motivation and behaviors.
Gibbons: We often discuss diversity in the context of demographics, such as gender and race. Why do you think that in a newly legal industry like cannabis, diversity of background deserves particular attention?
Billingsley: Whether we’re talking about product innovation or legislative lobbying, a homogeneous group with similar experiences will generate similar solutions. Diversity of thought — whether due to background or life experience — generates diversity in problem-solving approaches.
Again, to achieve that projected growth, we need to evolve to more sophisticated manners of operation. Bringing in people with diverse backgrounds, a willingness to challenge industry conventions, and an openness to new solutions is imperative to that success.
With that said, cannabis veterans are critical, too. I believe there’s a balance that blends lifelong experiences in cannabis — knowledge of the plant and its benefits, technical expertise in growing and extraction, and more — with business expertise. Improvements that drive efficiency, reduce costs, and add brand value are likely to come from outside.
That blend, which can be challenging culturally to strike, is critical for innovation and growth. But it will be absolutely necessary in order to compete past the point of federal legalization, when giant enterprises in pharmaceuticals, tobacco, and alcohol are likely to get involved.
Gibbons: Your company, Lunchbox Alchemy, has cannabis pros working alongside experts from the e-commerce and alcohol industries. What do experiences in those areas bring to a company in the cannabis industry?
Billingsley: My background is in alcoholic beverages, specifically the beer industry. Because both sectors are regulated, I experienced less of a learning curve than others. I came in knowing how to efficiently navigate the regulatory environment to keep branding, marketing, and sales above board. Many regulated companies spend time “cleaning up” their violations, which just isn’t a productive use of time.
Second, people in the e-commerce and alcohol sectors have a good sense of the route to market. How do you distribute product across your footprint without putting your fate in the hands of someone who may not have your best interests in mind? For us, that meant building and operating a statewide cannabis distributor, Hydra. Getting cannabis from seed to shelf has been a team effort.
Two individuals from other sectors who’ve been really helpful are Will Warne, our VP of operations and service excellence, and Kate Dunning, our VP of finance. Will has helped international enterprises like Nike and Target fine-tune their supply chains. Kate’s experience in large-scale manufacturing has enabled us to optimize our production layout and source food-grade ingredients.
One area where outsiders like Will and Kate pair well with insiders is customer experience. How do you keep people engaged along their path to purchase, from before they decide to buy through the point of sale at a dispensary register? That’s key for competing in a crowded category.
Gibbons: How can business leaders get workers in sectors other than their own to consider a new industry? Did your workers from other industries worry about derailing their career?
Billingsley: For us, the top challenge in attracting talent from other sectors is the perceived sketchiness of cannabis. Whether because the product is federally illegal or because the industry still operates somewhat like the Wild West, many people want career security that they just don’t see in cannabis.
Nobody can predict the future. What companies can do, though, is offer work experiences that translate well to other industries. I mentioned how useful my background in alcohol has been for navigating cannabis regulations.
The other part of the picture is benefits. By offering continuing education and retirement benefits, businesses can attract new talent while reassuring existing workers. It’s a win-win.
Gibbons: What’s your vision for the cannabis industry in 10 years? How much more diverse will it be, and how might that benefit consumers?
Billingsley: Federal legalization is coming. When that happens, the talent floodgates will open. Minorities, who’ve been historically targeted via our drug laws, will be much more willing to work in industries like ours. I wouldn’t be surprised if we see two or three times as many minority applicants after that happens.
More broadly, the industry will start to look like a cross between the alcohol and pharmaceutical sectors. Cannabis will be available like alcohol is, with regulations varying somewhat by state. FDA regulation will put quality controls in place to protect the consumer. Medical availability will be much broader, and we’ll know more about cannabis’s medicinal benefits than we can even conceive of today. Large ag, pharma, and CPG brands will dominate the space, but small local ones will be sought after by consumers.