Should Some Cannabis Founders Pack It In?
“Life can only be understood backwards; but it must be lived forwards.” Soren Kierkegaard
As 2023 winds up, this question will be hanging over the heads of many leaders.
Year-end financial results are almost in, expensive leases & licenses may need to be renewed and regulatory liberalization remains a dream. December is also a time of contemplation, around one’s career goals and needs.
Not surprisingly, many cannabis entrepreneurs are fed up, burnt out and holding on for dear life.
Investors typically like founder-run companies. Entrepreneurs are passionate, have skin in the game and often take a longer-term view than imported managers. However, when it comes to the cannabis industry, ‘we ain’t in Kansas anymore.’
Ongoing market challenges and uncertainties make it tough for even the most battle-hardened leaders of public or private weed companies. As if the job wasn’t tough enough already…
- Shareholders increasingly demand (elusive) profits over growth;
- The lifeblood of any sustainable business, capital, is expensive and difficult to come by;
- Emerging governance and ESG reporting requirements are layering on more cost, hassle and complexity;
Founder exits are not uncommon in dynamic sectors. Tech, for example, has seen a slew of high-profile founders’ step aside this year.
Realistic entrepreneurs recognize that their firm’s prospects could be better served with new, more professional management that can better handle today’s exigencies.
Unlike others, I don’t have a hate on for any cannabis founder. I know how difficult it is to take the entrepreneurial leap and build a profitable cannabis (or any) business in a tough economic and regulatory climate.
But for many, the sheen of running a weed company has rubbed off. That shimmering grass outside of cannabis can look mighty appealing right now. And if we are going to be honest, its time for many founders to step aside given their share price and market results.
What could be their next step?
1. Reinvent themselves as efficiency mavens. Focusing on the basics can't come soon enough for some businesses. Some founders like Mark Zuckerberg have done this, but the overall results are mixed;
2. Offload day-to-day responsibilities to others and move upstairs to a Board role where they could pay more attention to CSR or deal making;
3. Leave gracefully so as not to disrupt morale & partnerships or send bad signals to the market.
Without a doubt leaving a hands-on role can be a blow to one's ego. However, you may end up being happier, and your company’s share price might thank you.
#founders #succession #leadership #startups #management