The American cannabis industry is one of the most sensational business environments to surface in the contemporary professional era. The landscape of modern marijuana marketplace is fertile with ideas, hopes, ambitions, networks, collaborations, and excitement. The crux of this novel professional realm lies in the fact that it is entirely populated by “start-up” businesses. However, the unexplored nature of the cannabis industry leaves it wholly susceptible to misinterpretations, miscalculations, and manipulations. Moreover, as the cannabis space begins to grow out of its infancy, its maturation is defined by fierce competition and slim profit margins. These two notions taken together speak for the need of sound guidance and realistic expectations from executives in the marijuana industry. For cultivation businesses and ancillaries alike, it is ultimately up to these C-Level decision makers to decide the fate of cannabis industry start-ups—and all of the employees and investors bound within these novel projects.
Cannabis industry executives must be comfortable working within the constant fluctuations and variations of a nascent marketplace. Along this line of thought, professionals are drawn to the cannabis space for a variety of reasons: money, excitement, passion, curiosity, medicine, transformation, and grit. Looking at the sort of professionalism and attitude needed by executives to succeed in this market, their motivations for entering the industry are a primary indicator of their potential for success. That being said, executives in the cannabis space need to have the sort of grit and wherewithal to thrive in a chaotic environment—and, in turn, act as the cornerstone for stability for their respective companies. These industry leaders can’t be completely motivated by money, they must love challenges that arise along the way to getting paid. Therefore, cannabis industry executives will fail if they don’t love the “growing pains” explicit in every facet of an emergent marketplace.
Green Rush Syndrome
With the radicalized influx of start-up businesses in the cannabis space comes misguided notions of “getting rich quick.” As seen with the California gold rush in the mid nineteenth-century, individuals lose their logical inhibitions in pursuit of a mythical treasure. Moreover, these ill-advised persons are quick to discuss the spoils of their fabled financial boon without paying any credence to the reality of hard work and risk involved in such ventures. Hence, cannabis industry executives whom emphasize exorbitant returns above meticulous business planning are a red flag. Along this line of thought, most of these C-Level professionals come from other realms of business and are entirely naïve to the challenges of an industry based on agriculture and under consistent threat of state and federal governments. Unfortunately, these misguided executives will foolishly guide their investors and employees into a business project that has no chance for success—having no idea why. To sum it up, cannabis industry executives who emphasize naïve notions of wealth instead of patience and realism will sink ships.
Big Ideas and Poor Planning
In the dawn of the November 2016 elections, the cannabis space has been entranced by the promise of bountiful new recreational markets in places such as Nevada, California, and Massachusetts. With this notion in mind, business leaders are scrambling to engage these new arenas of cannabis commerce. To illustrate, executives who have developed sound business plans for their respective demographics and geographies, such as Colorado, assume they can enter these new markets without foresight or proper market research. This notion is heightened in California, who has the largest and most established marijuana-based economy in the world. Those executives looking to capitalize on the new recreational marketplace in California must set an infrastructure for their businesses that are compatible with a highly developed cannabis culture. Otherwise, a lack of proper planning and due diligence can quickly lead to the haphazard construction of ill-equipped sales teams and misguided marketing plans. Point being, cannabis executives rife with grandiose ideas yet lacking in meticulous preparation should be avoided.
Lessons Learned and Future Determinations
As seen in any traditional business, the value in of company’s team is derived from “the top down.” In other words, executive leadership sets the standard for the entire corporate culture, as well as work ethic, of a business entity. That being said, cannabis industry leaders must employ a stoic realism in their management roles that other employees can follow. For those unfortunate cannabis industry companies who have suffered the consequences of misguided directors, and survived, here are a few traits to look for in a new executive team:
Gritty, Enthusiastic, Agriculturally conscious, Patient, Realistic, Organized, Collected, Cool-Headed.
If looking to hire a new cannabis industry executive, companies are well-advised to look for directors and leaders who have “weathered the storm” in other start-up/boom industries—and succeeded. It’s important to note, however, that having managed a tech industry or flavored water company doesn’t mean that an executive is the right fit for a cannabis start-up. Cannabis industry executives must love and embrace the trials and tribulations of a nascent industry.