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Marijuana industry ownership in Denver and Colorado overall is overwhelmingly white.EXPAND
Marijuana industry ownership in Denver and Colorado overall is overwhelmingly white.
Brandon Marshall

Denver Marijuana Industry Ownership Lacks Diversity, Study Shows

Denver's marijuana industry has long been criticized for lacking diversity, but now city officials say they finally have the numbers to prove it.

Almost 75 percent of local marijuana business owners identify as white in a survey commissioned by the Denver Department of Excise and Licenses, with 12.7 percent of the owners identifying as Latino, 5.6 percent as black, and 2.8 percent Middle Eastern. Asians and Native Americans weren't represented by a single owner in the survey; over one-quarter of respondents chose not to disclose their race.

According to 2019 Census Bureau data, 80.8 percent of Denver's population identified as white or mostly white,  29.7 percent as Latino, 9.8 percent as black,and 4.4 percent as Asian. (People can check more than one race on their census form.)

“This study sadly confirmed what was widely suspected. Just like what has been seen across the state and in other legalized markets across the U.S., Denver does not have a diverse marijuana industry," Excise and Licenses director Ashley Kilroy says in a statement announcing the results of the survey.

Employee demographics were slightly more diverse, with respondents checking in at 68 percent white, 12.1 percent Latino, 5.9 percent black, 2.2 percent Asian and 5.9 percent Native American.

Denver Marijuana Industry Ownership Lacks Diversity, Study Shows (2)
Denver Department of Excise and Licenses

The study notes that the sample size of responding owners was fewer than seventy, and that the results "should be interpreted with caution." However, a more comprehensive 2018 licensee analysis from the Colorado Marijuana Enforcement Division showed that statewide trends are even more skewed, with white people owning 88 of marijuana business licenses, compared to Latino and black ownership rates of 5 and 2 percent, respectively.

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Colorado's lack of social equity for communities victimized by the War on Drugs has come under the microscope as consolidation and funding barriers increase across the marijuana industry. Bills to expunge former cannabis crimes and create funding and licensing opportunities for social equity applicants at the state legislature were largely cut during the COVID-19 pandemic, though there is still a push this year to create a definition of a social equity applicant for future programs.

In the early stages of marijuana licensing work group meetings, Denver pledged to approach future marijuana business opportunities through a social equity lens, but no initiatives or license opportunities have been created yet. The study, released several months later than intended, will finally give city officials the data they need to craft more aggressive policy, according to Kilroy.

"Fortunately, this study arms us with key information that will help us take new steps to improve equitable access to the cannabis industry in Denver," she continues. "We look forward to the work ahead with the industry, social equity activists, lawmakers and other stakeholders to create a Denver social equity plan that offers more opportunities to increase diversity when Denver creates new marijuana licenses in the future.”

Minority marijuana business organizations such as the Color of Cannabis, Black Cannabis Equity Initiative and Equitable Consultants believe those opportunities need to be crafted before any new marijuana delivery or hospitality licenses are approved in Denver, and also before the upcoming lottery for the dozens of remaining marijuana business locations under the city's pot-business limit. Proposals have included setting aside a certain number of licenses for social equity applicants and using marijuana tax revenue to fund loans and training for qualified social equity entrepreneurs.

"I don't think [the survey] necessarily holds the city accountable, because the whole reason to do this was more to prove to the industry that social equity was a problem," says Color of Cannabis director Sarah Woodson. "We've always known, as a community, who owned what, but now everyone can see it."

Woodson has proposed a one-for-one structure for new Denver marijuana business licenses, setting aside one license for social equity applicants for every standard applicant. "A one-for-one is fair," she says. "You're putting aside social equity licenses, whether it's delivery or hospitality, every time you're issuing a license. It doesn't stop others from being involved, but it ensures that qualified applicants can benefit from them when caps or moratoriums come up."

Challenges for participation differ heavily between employees and owners, Denver's study notes. Among marijuana employees, 83.3 percent list criminal background checks as an obstacle, and anywhere from 64 to 78.5 percent say the same of startup costs, neighborhood and zoning restriction, banking access and licensing opportunities and procedures. Only 16.7 percent of owners view background checks as a challenge, with startup costs (35.8 percent) the most recognized obstacle.

Nearly 57 percent of the overall participants in the survey consider opportunities for ownership within the city "poor," while just over 24 percent say the same of equitable hiring practices. Nearly 53 percent of all participants describe employment opportunities as "good," but over 70 percent of workers say that low wages for entry-level jobs are among the biggest barriers to entry.

Find the full survey below.

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