April 23, 2024
CEO-Worker Pay Gap Reflected In Cannabis Industry Salaries
Similar to other industries, the salaries received by marijuana company CEOs dwarfs what their store employees make.
April 20 is the unofficial holiday for marijuana, and although marijuana is enjoying a more mainstream profile, there are some stark pay disparities on display in the industry. Sales of cannabis are expected to hit $31 billion by the end of 2024, but the exponential growth comes with growing pains.
“As an industry, we are struggling—we are in dire need of a regulatory overhaul to prevent more cannabis small business owners from closing their doors and laying off their workers,” Truman Bradley, executive director of the Marijuana Industry Group, told Business Insider in 2023.
A year later, income equality has emerged. Similar to other industries, the pay of the CEOs of marijuana companies dwarfs the salaries of store employees. The average pay of a cannabis CEO in 2023 was $402,350.
Budtenders, the point-of-sale employees behind the counter at smoke shops and other dispensaries, take home an average of $42,000 a year. The farther down the company structure you get, the lower the pay; this is referred to as the CEO-worker pay gap, and studies suggest it is a bad omen for business.
In 2023, ESG Dive reported that an analysis of the CEO-worker pay gap at 100 S&P 500 corporations with the lowest median worker pay in 2022 by the Institute for Policy Studies revealed that the average CEO-to-worker pay ratio was 603 to 1.
Likewise, the Economic Policy Institute found that wage disparity increased from 21 to 1 in 1965 to 344 to 1 in 2022. According to Sarah Anderson, the global economy policy director at the EPI, an organization between voters, workers, and shareholders could help alleviate some of the imbalances in pay.
In January, Sens. Bernie Sanders (I-VT), Elizabeth Warren (D-MA), Ed Markey (D-MA), and Chris Van Hollen (D-MD), alongside Reps. Barbara Lee (D-CA), and Rashida Tlaib (D-MI) introduced the Tax Excessive CEO Pay Act, which is aimed at addressing rampant pay inequality. The bill is structured to force CEOs whose pay is 50 to 100% more than their median employee salary to pay more in taxes. If, for some reason, the CEO is not the highest-paid employee, the executive with the largest paycheck would be used to evaluate the company’s pay inequality.
“Millionaire and billionaire CEOs at massive corporations are cashing in larger and larger paychecks even as their workers —who make those profits possible—barely see their pay keep pace with rising costs,” Van Hollen said in a press release. “These obscene gaps are grossly unfair to workers and harmful to our economy as a whole.”
“Corporate greed is a disease that has long afflicted our country. CEOs are now making 400 times more than their average worker,” Tlaib said. “It’s disgraceful that corporations continue to rake in record profits by exploiting the labor of their workers. Working families deserve to live with human dignity…It’s time for the rich to pay their fair share.”
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