Corporate social responsibility is a management concept that is woven into corporate identity rather than a singular initiative or a one-off drive like a seasonal donation. By practicing CSR as a regular means of operation, companies aim to balance economic, social and environmental imperatives into what UNIDO describes as a “triple-bottom-line approach” without neglecting shareholder or stakeholder expectations.
It’s through that foundational application that CSR becomes so vital to the cannabis industry, an industry that’s projected to grow from $28.266 billion in 2021 to nearly $200 billion through 2028, all while navigating ever-evolving legalization, balancing environmental impact with innovation and serving a consumer base that increasingly values social justice. In the cannabis industry, it’s not just about the marketing spin or the benefits of corporate social responsibility — it’s about the essentiality of CSR.
CSR: The Wide View
In the cannabis world and well outside of it, CSR can focus on a wide swath of issues. On the environmental side, those might include responsible sourcing and eco-efficiency, while the social side encompasses humane working conditions, human rights and social equity.
CSR is a management concept that extends to business ethics, too, often concerning itself with anti-corruption measures, principled governance, stakeholder engagement and community relations. Philanthropy can play a part (though it’s not the be-all-end-all of CSR), as can improving operational effectiveness and even transforming the business model specifically to address social or environmental concerns.
CSR and Cannabis Culture
Looking at CSR through the cannabis lens, it’s key to remember that grassroots social movements created the industry itself. Somewhere between profit-focused companies and charitable organizations, the relatively-young cannabis industry emerges in a unique position of social entrepreneurship, according to Forbes.
Here at the very beginning of a newly mainstream industry, leaders have an opportunity to leverage that grassroots background and fresh start to create and nurture self-sustaining, revenue-generating businesses that don’t just do a little good here and there, but actually exist as vessels for social change – and maybe even set positive examples for others to follow. This more forward-thinking model is something many cannabis entrepreneurs call “net-positive” capitalism.
Why the Status Quo Won’t Work
Especially in an industry with such close ties to community action — and one that is still wrapped up in grassroots activism that’s both intertwined with and fueled by ever-changing legal statuses — CSR is not something that cannabis companies can put on the back burner.
Rather, it’s such a part of canna-culture DNA that companies can outright fail if they make the choice to neglect it. As legalization looms, it becomes the obligation of the cannabis industry to extend social responsibility to a consumer base that will expand exponentially.
On the generational front, Oracle reports that more than half of existing legal cannabis consumers are millennials, with Gen Z consumers rising quickly. While it’s not news that millennials and Gen Zers are both increasingly socially-engaged demographics, a Clutch survey of more than 400 customers (updated in 2022) really puts the burgeoning consumer focus on corporate responsibility into perspective, as the following numbers bear out:
- 75% of all customers are likely to shop with companies that support issues they agree with.
- More than half are likely to stop doing business with companies that support causes they disagree with; if this is limited to baby boomer customers, that figure falls to just 37%.
- 68% to 71% say that friendly business practices, social responsibility and giving back to the local community outweigh product price tags.
- More than 70% think it’s important for companies to take a stand on social issues.
CEOs surveyed in Deloitte’s 2019 Global Human Capital Trends agree, determining that the leading measure of corporate success is no longer profit, but “impact on society, including income inequality, diversity and the environment.”
Business Benefits of Corporate Social Responsibility
Sometimes, doing the right thing is a sacrifice, but in the case of CSR, these practices are oftentimes beneficial across the spectrum. Just off the top, potential business-side benefits of corporate social responsibility include the following:
- Broadened access to both markets and capital
- Reduced operational costs
- Increased sales and profit potential
- More efficient productivity and human resource bases
- Bolstered brand image and customer loyalty
Per Aflac, more than 40% of millennial investors consider CSR significantly when spending their money, too, but Harvard Business Review reminds us that the foundation of CSR must rise above profit margins: “[if] CSR activities mitigate risks, enhance reputation, and contribute to business results, that is all to the good. But for many CSR programs, those outcomes should be a spillover, not their reason for being.”
While CSR’s potential for customer retention is clear, these management mantras have a similar effect on employee retention and engagement.
Porter Novelli finds that a staggering 95% of employees believe that businesses should benefit all stakeholders (not just shareholders is the important takeaway, here), while 92% of employees who work at companies with a strong sense of purpose report that they’re more likely to recommend their companies to others seeking employment.
Implementing Cannabis CSR
Your cannabis company’s corporate social responsibility efforts don’t need to be focused on cannabis, but the plant’s cultural roots do open the way for opportunity, whether that’s helping to overturn often racially-motivated cannabis incarcerations, turning exclusively to recycled packaging options or offsetting the environmental impact of mass cultivation.
Cannabis companies like Harvest Health & Recreation have created entire CSR departments, keeping community outreach, internal ethics and social impact in constant check. Speaking to Green Entrepreneur, Director of Community Outreach Marc Ross suggests that canna-companies make focused CSR efforts based on the common, foundational principles of the people behind the business.
He points to Bloom Farms’ model of making one-to-one donations to food insecure people for every product purchased — it has little to do with cannabis, but it’s focused, it’s community facing and it reflects the values of the company’s founders.
Some other successful examples of CSR leadership in the cannabis industry include the following:
- Method Man’s TICAL creates strains specifically for sale in black-owned California dispensaries.
- Raw Garden commits to using less than a single gallon of water per plant daily — that’s five times less than the average water usage in its home state of California.
- During the COVID-19 pandemic, KushCo Holdings, Inc. set up a fund for employees to request anonymous emergency assistance, all while donating 700,000 pairs of gloves to frontline workers.
- Old Pal partners with Eaze, Amuse and Sweetleaf to donate more than 11,000 joints’ worth of cannabis to Compassionate Care programs with a special emphasis on veterans’ care, helping ensure that those in need have access to medical marijuana.
- Fiora hosts online forums for sexual health and body positivity and donates a portion of all sales to LGBTQ+ organizations.
- Aster Farms releases a public, consumer-facing sustainability report that discloses water, carbon, waste and energy consumption at their farm.
- Wana Brands and N’Bliss Cannabis Dispensaries offer direct donations and feature optional $1 and $5 donation prompts at their online storefronts to combat food insecurity alongside Operation Food Search.
A Mission, Not an Initiative
Speaking to the New York Post, National Cannabis Industry Association spokesperson Morgan Fox says that the cannabis industry has a once-in-a-lifetime opportunity to “set the standard for corporate responsibility and build an emphasis on ethical environmental, business and social practices into its foundation.” As a cannabis company, you don’t just exert an effect on society and the environment — you rely on both, and it’s your responsibility to be a warden of both.
CSR focuses on sustainability in more ways than one; it’s a recognition that profit alone is not a powerful enough working objective to keep a company both viable and relevant. From seed money to quarterly reports, it’s less about aligning CSR with your business goals and more about integrating CSR concepts into your company’s mission and core values, as practiced every day you’re in operation.
For cannabis, corporate social responsibility is not a way forward on a diverging path — it’s the only way forward to an equitable, sustainable mainstream industry.