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Female-led cannabis companies receive 'fraction of capital' of male counterparts: Wana Brands CEO

Wana Brands CEO Nancy Whiteman sits down with Yahoo Finance's Dave Briggs at the Benzinga Cannabis Capital Conference to discuss the state of the cannabis industry and gender disparities in the space.

Video transcript

DAVE BRIGGS: All right, Dave Briggs back here at the Benzinga Cannabis Capital Conference. The market sell-off does not escape pot stocks. They took a beating today. Most major MSOs down between 4% and 8%.

But it won't hurt the mood here at Benzinga, here with Nancy Whiteman, who is the CEO of the biggest-- North America's number one edible-- cannabis infused edibles company. And at first impression, what jumped out to me at this conference-- it's been my first-- it's about 100 men to one. Why is there so few women in this industry? Why is there so few female leaders in this industry, Nancy?

NANCY WHITEMAN: Well, I do have a theory about that. And to provide some context, so Wana Brand was founded in 2010. So that's 12 years in Colorado. And Colorado, at that point, was the medical-only market. And at that point, it was an unlimited license market. And it was very low barriers to entry. You had a couple thousand bucks, you filled out a loan application, you got your license. And there were lots and lots of women in the market at that point in time.

But what has ended up happening is that as states have adopted more limited license models, it's become much more expensive to get into the game. And so it favors the people who've traditionally had access to capital, who are men.

DAVE BRIGGS: White men.

NANCY WHITEMAN: White men.

DAVE BRIGGS: There's a lot of emphasis, though, on the social equity component. Why is there not more emphasis in getting more women involved?

NANCY WHITEMAN: Yeah. Well, I think the social equity component has historical roots in candidates and the very blatant laws that discriminated against Blacks. So I think it's a higher visibility range than women. But I don't know if you heard [AUDIO OUT] talk to this, but the evaluations that women get when they raise capital can be 30% to 40% less than similar male companies. And they get a fraction of the capital--

DAVE BRIGGS: Wow.

NANCY WHITEMAN: --in that case. And so it really-- it's a little disheartening. You have this brand new industry. You'd think that it really has the opportunity to set a new path, but unfortunately, at this point, it looks very much like a traditional industry.

DAVE BRIGGS: Let's hope you can change that. How is inflation cutting into the cannabis business?

NANCY WHITEMAN: Yeah, I think inflation has had a big impact. Well, I think a number of things have a big impact. Inflation is certainly one of them. But people have less disposable income. So that means that they are buying less, and that what we see is both price compression, which is not-- ironically, we have price deflation in an inflationary.

So it's a bit of a double whammy for the cannabis industry. But I think that people have less disposable income. Their buying velocity is down. And then with price compression, price is down, too. So that's-- there's kind of both components when you look at what's happening with volumes straight.

DAVE BRIGGS: I want to talk here at Benzinga about the California market, which was expected to be the basis on which the country would operate. It has turned out to be anything but. It has been a disaster for businesses, for farmers. Can you put your finger on what went wrong there, what we've learned from the biggest market in the country?

NANCY WHITEMAN: Well, a whole lot of things, right, out there. Where do I begin?

DAVE BRIGGS: And you're pulling out.

NANCY WHITEMAN: We have pulled. I think we have a weird sort of swarm of issues in California. One of them is the taxation situation there and have-- we've got oversupply of product, which is driving prices down. We have a proliferation of brands. At the same time, there really isn't enough distribution. So not enough dispensaries to population size, too many brands, and oversupply. And then against that backdrop, we have a very robust [AUDIO OUT] right? So it's much, much, much more expensive to buy illegal product than it is to buy product.

DAVE BRIGGS: Some estimate that illegal market is at least 10 times the size of the legal market--

NANCY WHITEMAN: Oh, wow.

DAVE BRIGGS: --and is a massive challenge.

NANCY WHITEMAN: By that much, but yes, exactly.

DAVE BRIGGS: It's awfully big. Nancy Whiteman is the CEO of the number one edible brand in North America, Wana Brands. It's good to see you here. Thank you so much.

NANCY WHITEMAN: Thank you so much.