Cannabis use was legalized in Illinois nearly four years ago on Jan. 1, 2020. A lot can change with a new industry in that time, especially one as unique as cannabis. As it pertains to the Prairie State, the initial businesses transitioning from medical cannabis companies and entering the adult-use marketplace as the industry began to take shape were 100% majority white-owned, with only one majority woman-owned business.
Though, just a few years later, the latest data on Illinois’ legal cannabis industry shows that diversity numbers have increased significantly since those initial days, according to the state’s Cannabis Regulation Oversight Officer (CROO), suggesting that the efforts of recent years to prioritize social equity license applicants seems to be working.
The CROO’s diversity survey assesses the “extent of diversity” in the state’s medical and recreational cannabis industries, along with methods for reducing or eliminating “any identified barriers to entry, including access to capital.” The most recent survey, conducted December 2022 to August 2023, shows a stark change since 2020, though the majority of increases across many categories came during the 2021 study.
The findings resulted from two surveys sent by CROO in May, including a mandatory poll sent to all 227 licensed cannabis businesses in the state along with a separate, voluntary survey for employees. The final data includes responses from 132 companies, representing roughly 224 licensees, while 2,307 employees responded, around a quarter of the nearly 10,000 emails the survey went to.
The new report shows Black-owned companies increased from 0% to 27% of the market between 2020 to 2023, while Latine and Hispanic-owned companies showed growth from 0% to 5%. Asian-owned companies grew from 0% to 3%, while women-owned businesses currently make up 16% of licensed cannabis companies.
The report notes that “company responses were not verified but accepted as accurate.” CROOS also noted that, since not all companies returned the poll or answered every question, it’s possible that the survey responses are not representative of the total cannabis industry in Illinois. Still, “the results are the most accurate information available,” according to the office.
Cannabis industry employees in the state are also more diverse than when the adult-use market launched in 2020. From 2020 to 2023, Latine and Hispanic employees increased from 5% to 11% and Asian employees increased from 1% to 2%. Additionally, 3% are veterans, 7% have a disability, 2% have been incarcerated, 16% are part of the LGBTQIA+ community and 2% are transgender.
The survey results also found that diversity increased on the board of directors and in the C-suite of cannabis businesses, with racial and gender diversity among directors and executives increasing in nearly all categories. (The only categories that saw no change were the amount of Latine or Hispanic executives, staying at 5%, and the amount of women executives, 26%.)
This year’s survey marks the third round of diversity polling conducted by CROO since Illinois’ legal market opened. The first survey was conducted from November 2020 to April 2021 and the second from December 2021 to August 2022.
The Illinois cannabis market has faced a number of challenges finding its footing. Earlier this year, a Headset report found that the state ranked among those with the most expensive retail cannabis markets in America. Taking 2023 sales into account, Illinois is the third-largest cannabis market in the U.S., behind California and Michigan. Home to only 118 brands at the time, Illinois is also home to the highest market consolidation, with 68% of sales coming only from the 10 top brands.
While the market is still growing, Illinois awarded 55 adult-use licenses through a lottery in July 2023.
