Why most cannabis companies fail?

You might have the wrong strategic assumptions

Many cannabis firms will inevitably crash due to the immutable dynamics of capitalism. Some companies, however, shouldn't fail especially when they are blessed with unique competitive advantage and assets.

Failure is often rooted in management operating under 3 faulty assumptions which underpin their strategic and investment decisions:

1. Product quality is everything: Not exactly. What’s really important is consistently delivering the right product to the right segment at the right price. That could be premium quality but for most brands it will either be mass-market quality or targeted at niches;

2. The consumer is static: Not a chance. The legal consumer (and its retail channel) is not well understood as legalization is barely a few years. Consumer knowledge is in its infancy. Needs are evolving and will differ across geographies, categories and use cases;

3. Cannabis is like (insert industry): Nope. Cannabis is like cannabis. Managers should focus on learning from their peers and creating their own best practices instead of superficially copying other sectors like alcohol or CPG.

Leaders can avoid these decision traps though better strategic planning, deeper consumer analysis and regularly challenging conventional wisdom.

#failure #strategy #assumptions