A cannabis cri de coeur. Or why the sector is doing just fine
Mellow out, people
‘I’m mad as hell and I’m not going to take it anymore’
Anchor Howard Beale in the 1975 film, Network
The cannabis industry often gets a bad rap. Yes, much of the criticism is fair and justified. Billions of dollars of shareholder value have evaporated. Scams pulled. Careers ruined. Rogues and amateurs continue to run amok.
Yet….is ALL the public disparagement completely deserved and fair, and reflected of the industry today?
Not in my opinion. If we are going to be critical and honest – fair is fair - then we are obliged to be balanced and fact-based. There IS much to celebrate.
The North American industry is large, growing and steadily improving quality, variety and access. A large number of companies have turned the profitability corner. The illicit market is receding.
And then there is that perspective, thing. When you are in this crazy business its easy to lose sight of the fact that new industries experience similar growth pains and stages of development (e.g., boom, bust and boom). Given its familiarity, it is simplistic to assume that cannabis almost grows and sell itself even under onerous regulatory and tax regimes. Finally, it would be erroneous but reasonable to assume that the more capital that is invested in a business the more likely it will be successful.
So its time to dispel a few myths…
Myth 1. The travails of public companies represent the entire industry.
Nope, they represent something like 5% of all producers. Much of the positive in our industry is found in the 95% of firms that most people don’t see.
Myth 2. Cultivating and marketing cannabis is easy.
Never was, and probably won’t be in the near term, given the regulations and the required ‘art’ to grow and differentiate the product.
Myth 3. Most cannabis leaders are incompetent and are in it for the money.
Smearing a class of people is neither constructive or fair. If passion and purpose counts (and surely it does) then I have never met a more motivated group of managers and employees.
…and affirm some conclusions:
1. If things were so easy, they would have been figured out by now. Next to the 100+ year old banking and defense industries, cannabis is easily the most complex and dynamic sector I’ve worked in;
2. One strategy does not fit all, particularly when it comes to regulatory and market fit. This will especially hold true in the US until there is regulatory liberalization and harmonization;
3. The legal cannabis industry will get there. Though I’ve seen tremendous progress over the past 6 years we can’t forget it takes many years for ANY new industry to mature.
#strategy #regulations #execution #publiccompanies #LPs #MSO