I get asked more cannabis questions…part deux

My next round of Q&A for your reading pleasure:

1) What’s more needed in cannabis, management or leadership?

This is a complex question and operators regularly confuse these different roles.  To me, leadership is about inspiring, guiding, and goal setting.  Separately though related, managers focus on controlling and administering people & resources.  Both types of duties are necessary for a healthy business.  However, the proportions depend on the business goals and culture. The cannabis sector adds a further layer of complexity given its special financial and compliance considerations plus the lack of executive talent.  In my industry observations, I have found it a challenge to find good leaders who are sound managers and vice versa.

Success is matching the right personality and skill set to a clear role definition at the propitious time.  In a typical cannabis firm, I would have an inspiring and respected CEO ‘leader’ craft a competitive strategy, rally the troops, and raise funds and an expert, diligent COO focus on ‘managerial’ activities like strategy execution and regulatory compliance.

2) What is the best market sizing number?

There are many ways to size a market.  What separates credible figures from bad ones is the criteria of attainability i.e. the chances of achieving it.  Many strategic plans feature a Total Addressable Market (TAM).  This will be the most optimistic number based on a supposition that ‘size matters’   The problem with cannabis TAMs are that they are derived from heroic but shaky assumptions around per capita consumption, regulatory approvals or time to revenue.

Consequently, TAMs will be unrealistic and unattainable, potentially putting off revenues & profits farther into the future.  Savvy funders know this and will discount the TAM - and possibly you.  There have been big TAM misses (California, Quebec) and imminent ones (Mexico, psychedelics). Be ambitious with your market sizing but not unrealistically so.

3) Why engage a consultant?

In emerging sectors like cannabis, consultants play a key role in guiding, scaling, and professionalizing a company.  The question of who and how you engage them is not an easy one as each will vary by fit, knowledge, and fees. 

Here is why I have been engaged:

> Specialized knowledge – could be narrow and deep (e.g, finance) or broad and integrated across the enterprise (e.g., change management);

> Added horsepower – filling an immediate work requirement (before hiring a FT person) or perform key activities at a certain time (e.g., corporate development tasks);

> Executive muse – This is a subtle but important need.  The CEO often desires an objective view of the business & industry by an experienced and trusted individual.

#marketsizing #management #leadership #consulting #TAM