The Cannabis Industry Is Like…..
'To a man with a hammer, everything looks like a nail' Abraham Maslow
….nothing else. This is not a trite statement. Leaders with incorrect a priori assumptions are vulnerable to bad operational and branding decisions, not to mention building the wrong organizational model. Sadly, many cannabis decisions are tinged with misperceptions, facile industry comparisons and dangerous operating assumptions.
Some background
To a certain extent the weak state of our industry traces to the pioneering managers, investors and Boards who strongly believed that cannabis was just like the Alcohol, Tobacco, Pharma or CPG industries, the most comparable sectors at the time. As such, these early-stage cannabis firms would be run based on the operating principles of the Big 4. Many of cannabis's first generation of leaders came from these sectors, bringing their methodologies, experiences, and expectations.
They could not be faulted for applying their thinking constructs since that’s what they were hired for. And to a certain degree it’s all they knew.
This strategic path was understandable, even in hindsight. Legal cannabis in Canada emerged relatively quickly out of thin air, lacking a playbook and any meaningful data to rely on. It was also a challenge if not risky for a manager or former legacy employee to go against the money or smooth-talking Big 4 management imports.
Today
By 2020 those of us who in the trenches or were critical thinkers started to know better. Most of those big LPs and MSOs that were built on Big 4 ideas have floundered including ones that were funded with significant Big 4 dollars.
The concern today is that many leaders do not recognize these early strategic missteps and continue to make the same mistakes as their forebears. The evidence is everywhere.
There may be a time when a large LP resembles P&G, but that won’t happen unless some basic prerequisite are in place such as the emergence of a true CPG-like culture, better quality data and significantly improved product consistency.
Forward to a new construct
Without a doubt, the cannabis industry does share some features of the Big 4 including strict regulatory requirements, dynamic consumer tastes and high CapEx requirements. But cannabis also shares important characteristics and can leverage insights from other sectors.
To wit, cannabis resembles the fashion business in the criticality of launching products to meet changing tastes. Cannabis and the tech space share a common start up environment, rapid growth and pursuit of IP. And not surprisingly, cannabis is creating its own best practices every day.
People who see cannabis as a unique industry with its own operating system will reap higher returns, faster.
#MSOs #LPs #decisionmaking #strategy #benchmarking