Stereotypes Drive Cannabis & Psychedelics Market in U.S.
Stereotypes about cannabis and psychedelics are shaping the stock market's reception to these recently legalized drugs in the U.S., according to new studies. Consumers expect business owners' expertise to align with these stereotypes, influencing their purchasing decisions. The stock market for these substances is now worth tens of billions of dollars and is projected to grow exponentially.
Research shows that white consumers are more likely to buy cannabis gummies marketed as Black-owned, suggesting that stereotypes can benefit underrepresented business owners. However, Black consumers' preference for Black-owned businesses does not extend to cannabis gummies. Before legalization, people from underrepresented communities faced disproportionate criminalization for using and selling these substances.
Policymakers are addressing this disparity through equity initiatives, prioritizing licenses for underrepresented business owners. A real-world study found that a 'Black-owned' label on a psychedelics ad received 21% more clicks than an ad with no ownership indication, making it more cost-effective. Older research might suggest that Black cannabis-business owners should not identify their race, but these findings show that stereotypes can actually help underrepresented business owners.
The stock market for legalized drugs like cannabis and psychedelics is booming, and stereotypes are playing a significant role in shaping consumer behavior. Policymakers are addressing historical disparities through equity initiatives, and underrepresented business owners can leverage stereotypes to their advantage. As the stock market continues to grow, understanding and navigating these stereotypes will be crucial for business success.
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