People with lighter colored hair have melanin in the:

Individuals with lighter colored hair have melanin primarily within the cortex, which is the middle layer of the hair strand. The cortex is responsible for the strength, color, and texture of the hair. Melanin is the pigment that gives hair its color, and the amount and type of melanin present in the cortex determine whether the hair appears light or dark.

In lighter hair colors, there tends to be less overall melanin than in darker hair. While the cuticle is the outermost layer of the hair that protects the inner layers, it does not contain melanin. The medulla, which is the innermost layer of the hair, may be present in varying conditions in different hair types but is not directly involved in pigmentation. Therefore, the correct understanding emphasizes that melanin is indeed found in the cortex for individuals with lighter colored hair.