3 Priorities for Cannabis CEOS in 2024

Lord Tennyson’s sets the right tone for cannabis in 2024

"We are not now that strength which in old days moved earth and heaven, that which we are, we are. One equal temper of heroic hearts made weak by time and fate, but strong in will. To strive, to seek, to find, and not to yield." 

Calendar-year transitions are a good time to take stock of your business and where it’s going. 

Even if Rescheduling and SAFER comes to pass they will not materially improve an operating environment featuring margin compression, slowish growth in older markets, and limited access to cheap capital.  This situation may get worse before it gets better.

I speak to dozens of Canadian and American cannabis leaders on a regular basis.  Their priorities can be bucketed in 3 areas:  

1) Strategic clarity

Most cannabis firms try to be all things to all people and markets.  It’s time to make some hard strategic choices. 

CEOs need to clarify what they are (foundational corporate position), why the target consumer wants their products (the value proposition), where they can profitably compete (target markets) and how to repeatedly deliver their value proposition (capabilities). Any analysis should include torture-testing strategic assumptions, and undertaking a ‘build vs buy’ exploration to uncover smart outsourcing opportunities.

2) Corporate culture

Chances are your culture needs some TLC.  Bad cultures have high turnover, recruiting problems, and poor brand reputations.  Sick cultures also display less obvious ills such as low productivity and innovation, and excessive politicking.  

Renewal must go beyond bromides, cosmetic changes and shot-term balms. 

CEOs must consistently model desired behaviors and make the necessary fixes to the organizational design and operating practices.  Addressing deep issues may also require sustained change management activities and leadership swaps.

3) Revenue management

Maximizing available revenue is a prerequisite to enhancing margins. This a two-part effort.  First, look for ways to reduce revenue leakages such as unauthorized discounting or clients short-paying invoices.  Moreover, find opportunities to raise prices where pricing does not align with your delivered value proposition or competitiveness.

Part two is about maximizing cash flow through improved credit policies, faster AR collections and better inventory management.  Implementing these 'blocking and tackling' practices can no longer be deferred. 

Yes, companies have additional or other mission-critical needs.  However, plenty of research shows that firms cannot execute well on more than 3 priorities given day-to-day exigencies.

The above is a good start.  Let’s get to work

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