Competing through Cannabis Keiretsu
A Keiretsu is a little known but proven strategy to drive top-quartile business and financial performance.
Basically, a Keiretsu is a loosely organized alliance of symbiotic firms within Japan's business community. Their power lies in aligning interests, strategies and relationship practices over the long run.
The cannabis version I am talking about is less structured than the Japanese model (e.g., it jettisons practices such as interlocking ownership and anchoring banks). It is more about finding and partnering with the best supply chain, ancillary and professional services companies available in our space.
The benefits are compelling.
I’ve interacted with hundreds of LPs & MSOs. When they work with leading advisors and vendors, they are able to generate compounding effects of shared value i.e. 1 + 1 = 3.
Partnering with the best also improves your odds of being the best.
One Canadian LP that leverage this strategy for success is MTL Cannabis Corp.
If you don’t know MTL, they are a profitable, mid-size LP - a rarity in Canada - who serve both the adult use and medical segments.
I leave it to CEO, Michael Perron, to best articulate MTL’s version of a Cannabis Keiretsu:
“We really value the idea of building a 'community' within the industry. Without a doubt, that is one of the driving factors to where we are today. We invest so much into the cannabis community, and we see first hand the mutual benefits of these partnerships.
This approach extends throughout our entire ecosystem, playing a key role in expanding our recreational, medical, and international business platforms.
Our valued partners include everyone from genetics suppliers and insurance providers to professional services firms, all of whom play key roles in the growth of the business.
In MTL’s community, we all win together.”
It won’t come as a surprise, but not every firm knows or has access to leading vendors. Modesty aside, many companies like me and MTL are selective in who we work with and how. By having access to the best but also scarce inputs, vendors, or expertise, LPs and MSOs can create real competitive advantage.
Furthermore, implementing a Keiretsu-like strategy is not a trite commitment. Finding and partnering with the top cannabis suppliers and advisors takes work and sometimes short-term sacrifice for longer term gain.
Finally, doing business is more than a commercial transaction. It is about having a two-way partnership model based on mutual transparency & knowledge transfer, shared values and objectives, and fair pricing & payment practices.
#partnership #Keiretsu #strategy #MSOS #LPS