5 Essential Truths for the Cannabis industry

There are more but 5 will do for now

Last week, I posted why it was time to slay 5 destructive cannabis myths.  My article generated lots of engagement and debate. One industry pundit, Kate Crowther, suggested I post my 5 truths - or what every cannabis leader must get right to build a flourishing business.  

Thanks Kate, and here goes:

1. The team is everything – Cannabis may be a wonder plant but without a committed, professional and competent team, it’s just a pile of organic material.  Diversity (across many dimensions) counts even more in cannabis because of the sector’s unique culture and operating environment.  Not surprisingly, firms should prioritize human capital management to get the right players in the right roles.

2. The basics still matter – Foundational activities around financial management, governance and planning (to name but three areas) are often neglected tasks in cannabis firms. Paying close attention to these business activities is critical for optimizing cash management, making big investment/capital markets decisions and understanding high-risk, strategic bets.    

3. Everything takes way longer than expected – Subdue your ego and naiveté.  I’ve worked with over 140 cannabis organizations around the world.  I have yet to see one major initiative come to fruition on time, on budget and hassle-free.  This is not necessarily a failure of management or poor planning.  Regulations, talent gaps and financial limitations will play havoc with your best laid plans.

4. Your products will be relatively undifferentiated (at least initially) – Companies may think they produce the best cannabis products in the world, but the data (and the typical consumer) would probably disagree.  In many cases, you will need to identify and leverage a better, more differentiated way to compete.  This strategy development & implementation process takes time, involves extensive market research and requires painful resource choices, plus an understanding of your true operational capabilities and gaps.     

5. A start up is not a mature business – Starting a cannabis operation is very different from running a sustainable and profitable business, whether you are talking vision, capabilities, scale or culture (i.e. norms and practices).  Revenues, costs, and products can quickly soar - along with risks and stakeholder demands. Cannabis leaders must quickly but adroitly manage the transition from entrepreneurial venture to mature enterprise.

Industry-wise, we are just getting started.  Fortunately, there are lessons and best practices to guide companies.  

What are yours? 

#strategy #culture #products #marketing #collaboration