The consumer mindset of the past is gone! Now more than ever, consumers are demanding companies change the way they do business by becoming more transparent in their practices, while also taking an active role in their community and environment.
In comes Corporate Social Responsibility, or CSR. Through CSR programs, companies can incorporate environmental and social concerns into the fabric of their business planning and operations with the goal of making the world a better place.
With cannabis rising as one of the leading industries, its devastating history for minorities across the U.S. still remains, leaving room for cannabis leaders to give back to the community and build meaningful corporate social responsibility for all.
Here’s what you should know about CSR and how it can benefit your cannabis businesses if you are forward thinking and looking to nurture community relationships and boost their reputation in the industry.
What Is Corporate Social Responsibility?
As the name suggests, Corporate Social Responsibility is a business practice that aims to promote social and environmental accountability. Simply put, CSR are strategies businesses use to make a difference in the community they operate in and serve. CSR practices come in many forms, including environmental efforts, philanthropy, volunteering, and ethical labor practices.
What Is the Difference Between Corporate Social Responsibility and Social Equity?
You may have heard of the term “Social Equity” when it comes to cannabis licensure, but it is important to note that “Corporate Social Responsibility” and “Social Equity” are not the same. As established in the previous section, CSR deals with businesses giving back to the community in an effort to demonstrate themselves as good corporate citizens.
On the other hand, Social Equity in the cannabis industry usually refers to a “Social Equity applicant.” These are individuals that meet one or more of criteria listed by their respective state during the cannabis licensure process. To learn more about Social Equity applicants, read our article, “How to Open a Cannabis Dispensary in Illinois.”
Why Should Cannabis Businesses Pursue Corporate Social Responsibility?
Companies across various industries are increasingly developing CSR programs to focus on championing causes that align with their business, here’s why:
Enlightened Social Investment
Through CSR, companies are given the opportunity to communicate their values publicly, simultaneously creating good faith among the community the business operates in. A constant presence in the community allows for change to be made, such as by nonprofit investments, company programming, and respectful treatment of the society and environment. Additionally, a company will be seen as a corporate entity that gives back—one of the most powerful ways of marketing to a potential client base.
Become a Trailblazer
To put it briefly, the cannabis industry lacks community leaders as seen in other lucrative businesses with similar capital. Ultimately, this absence affects cannabis’ ability to contend with other big sectors. When it comes to taking lead, consider these factors:
Taking up the leadership space in the cannabis industry makes an incredible marketing advantage
Companies that decide to invest in the community will be the first, the best, and become the standard for the new budding industry
Win the competitive edge over other companies
The New Standard
Top companies realize the importance of CSR. Not only is it a way to give back to the community they serve and operate in, it’s now expected. A majority of the world’s most reputable companies have robust CSR programs, becoming the gold standard for operations.
Marketing
CSR is the means to an end of marketing for a new brand trying to enter a new market space or to elevate their brand name in the community they serve and operate in. Companies that actively demonstrate social responsibility build consumer preference and loyalty, increasing not only brand image, but brand equity as well. Business giants like Microsoft and Disney both have strong CSR programs, making them two of the world’s most socially responsible corporations in the world.
Impact the Bottom Line
The way consumers buy products has changed. Now, people are actively searching for products that give back to the community and the environment. In a recent survey by Accenture, out of 6,000 consumers in 11 countries across North America, Europe, and Asia, research found that nearly 72% (three-quarters) of respondents said they were currently buying more environmentally friendly products, with 81% saying they are expecting to purchase more over the next five years. The trend continues with the rise of more “conscious consumers” seeking to buy products from companies they know are good corporate citizens.
Make a Difference
Developing and implementing a CSR plan truly impacts the community in which a company conducts business . The cannabis industry is in the business of healing. Whether for anxiety, chronic pain or for recreational use, cannabis is meant for people to feel better. Through CSR, cannabis companies are given the opportunity to give back healing to the community based on the causes they support.
How Does Corporate Social Responsibility Help During the Cannabis Licensure Process?
The cannabis licensure process is a rugged path with lots of twists, turns, and surprises, but there is one thing you can count on: a Community Impact Plan is required for all cannabis licensure applications, and they are bound to become a more critical piece of the equation as New York set a new standard by requiring licensed NY cannabis businesses to provide proof of having implemented their Community Impact Plan in order to be eligible for license renewal.
During the licensure process, applicants are expected to propose information on future philanthropic contributions, including those to give back to the community and other commitments to worthy causes, such as involvement in low-income areas. In order to make a real difference in the community, it is crucial that these Community Impact Plans are fully developed and actionable.
Common Corporate Social Responsibility Mistakes
Failing to Acknowledge the Past
Despite the recent legalization of recreational cannabis in New York earlier this year, the cannabis industry is still a sector shadowed by its illegal history and its negative impact on communities across the country.
Paying it forward means operating the business in a self-aware manner that understands and recognizes the impact of cannabis on different populations in the times before its legalization. Ultimately, it is negligent to not acknowledge the negative history of illegal cannabis’ effect on communities nationwide.
Not Executing the Corporate Social Responsibility Plan
When it comes to establishing a bulletproof plan during the application process, it’s better to “measure twice, cut once.” If you haven’t heard this popular expression before, it doesn't only apply to carpentry!
Developing a strong and actionable plan at the application stage is crucial to future CSR success. Many businesses fail to “measure twice” and go straight to cutting, leading to operations not fully executing—even failing to execute their plan at all. Other issues that may arise later include compliance problems when it comes time for companies to show accountability.
Always hold good to your plans, if you don’t, it reflects badly on the business.
How To Set Up and Implement a Corporate Social Responsibility Plan?
You’ve decided to implement a CSR Plan for your business, now what? Here’s how to get started:
Developing the Plan
When developing a CSR plan, it is crucial to recognize what your business’ priorities in the sector are—this is also known as your business’ “Giving Pillars.” Ask yourself: “What are the causes our business should commit to giving time, funding, and energy to?” Refer to state requirements to ensure these causes align with your state’s mandates.
Now it’s time to build a long term plan for impact in your community and environment. Consider the following:
What are the organizations that work within your market?
How many dollars by cause do you want to invest?
Are you willing to accept grant applications?
Are you open for solicitation from nonprofits?
Are you willing to serve as a sponsor for events?
Implementing the Plan
You’ve developed a bulletproof plan, congratulations! Time to put it to action. With the Giving Pillars your business has already identified, the next step in implementation is to vet organizations whose missions align with your causes of choice. Take the time to make introductions and connections with these organizations for the best long-term results.
Often overlooked, it is also important to stay on top of accountability report paperwork to ensure any money given to organizations is used appropriately. Not only is it necessary to track long term impact, but also crucial for dealing with possible compliance issues that may arise later.
Let’s Build Your Cannabusiness
Corporate Social Responsibility is the future of business and you do not want your cannabis business to be left behind. Whether you’re in the application phase for licensure or aiming to be the first trailblazing community leader, Cann Strategy is here to help. Our team of industry experts can turn your business’ CSR goals into actionable strategies that truly make a difference in the world.
Ready to work with us?