From Stigma to Support: “Black-Owned” Labels and Expertise Stereotypes in Cannabis and Psychedelics Markets

Abstract We examine the effect of “Black-owned” labeling on cannabis and psychedelic brands, in context of the stigmatized and risky nature of the drugs category. Building on prior studies examining social justice or discrimination, we introduce an expertise stereotype framework. As study 1, we surveyed 37 Black professionals in the drugs industry about expectations regarding “Black-owned” labels, as juxtaposition to consumer responses in the following studies. In study 2, we measured expertise stereotypes about Black and women entrepreneurs across various product types. Utilizing these findings, we contrasted the effect of “Black-owned” labels on cannabis versus candy products in study 3. “Black-owned” labeling increased Black participants’ intentions to consume candy, but not cannabis; and the pattern reversed for White participants such that “Black-owned” labeling increased their intentions only for cannabis. Whereas out-group members’ response is consistent with expertise stereotypes, in-group members’ support does not extend to the stigmatized category. In study 4, field ad campaigns revealed that “Black-owned” (vs. no) label increases click-through by 21% on a psychedelics ad, while a “Woman-owned” (vs. no) label reduces by 15%, consistent with expertise stereotypes. These findings advance the discourse on ownership labeling and provide insight into nuanced consumer responses in this category.