Djoeang - Make Money and Be Success - Back in the ’90s, it seemed that anyone with an idea had a dot-com company. The money was flowing, and everyone was trying to jump into the latest and greatest disruption the market had seen. Cannabis has followed a similar path, with investors seeing the massive potential in the industry. Unfortunately, just like then, now we’re seeing which organizations are led by passionate, visionary leaders — and which ones simply aren’t.
This is a natural process of development in any new industry. Companies are formed, entrepreneurs bring new ideas to the table and investors help the burgeoning businesses grow. Over time, those investors want to see their investments bear fruit, which can lead to some culling in the market.
In my experience as chairman of the National Cannabis Industry Association Banking and Financial Services Committee, I’ve seen the cannabis industry up close, learning the regulatory climate and industry dynamics. For this next phase, it’s vital that companies elect true leaders who can help move the cannabis industry forward. But what does this even mean, and what makes cannabis such a unique and challenging market? Here’s what I’ve seen and learned in the past six years.
Entrepreneurship Versus Operations
It’s common in entrepreneurial fields that it takes a unique blend of risk-taking and visionary skills to lead a company from a concept into a business. However, that skill set isn’t necessarily as helpful when that organization needs to scale. As the focus of the business shifts, many companies opt for more operations-minded leadership.
Cannabis has experienced this trend. It shows the value of a strong board of directors or leadership team when they can agree on who needs to steer the ship at launch compared to once a company hits a certain level of maturity. While many companies have made these decisions and experienced increased success, founders can be unwilling to step down and let their businesses move in the directions they need to in order to thrive.
Founders in the cannabis industry were often also advocates during legalization efforts. Their passion for the product and its value for society cannot be understated. While this clear purpose is inspiring and can lead a team in the beginning, it can sometimes blind leaders to the business requirements of the changing market.
Cannabis As A Unique Industry
I sometimes laugh when I see high-profile executives brought into cannabis organizations after experiencing mainstream success. What works in other retail or delivery organizations doesn’t necessarily apply to cannabis.
Leaders in this industry need to understand the complexity of each market and how that shapes their decision-making process. Every state-legal market creates a unique set of challenges. These include the licensing structure, consumer demographic, regulatory environment, banking dynamic, government influences, market history and more. Someone in a leadership position navigating through these potential landmines in each state, with little to no knowledge of where to take the next step, could potentially set those operators back precious time, momentum and capital.
A failure to recognize these differences and complications, as well as the ramifications of moving forward without a deep understanding of the regulatory, commercial and consumer circumstance, often ends up pushing these leaders out of the industry. The “basic” rules that make traditional businesses successful and scalable simply don’t apply to cannabis, which requires a more agile and multifaceted approach.
Valuable Leadership Qualities For Cannabis
Empathy has increasingly been regarded as vital for any leader. This skill is required in two main ways for the cannabis industry. First, turnover is notoriously high in the cannabis space. By empathizing with employees and addressing issues like burnout or stress, leaders can reduce this issue and build a more cohesive and unified organization that works together, resulting in employees who feel supported and understood.
Second, empathy is vital for leaders to understand their customers and connect with their community. The needs and motivations of an older cannabis consumer ordering edible delivery in a medical state will be different than those of a younger flower-consumer picking out a recreational product at a retail dispensary. Only by truly understanding their community can leaders build experiences that lead to meaningful connections.
It’s not surprising that integrity is a must. People want to work for and do business with leaders who are ethical, who mean what they say and are reliable. Cannabis is often perceived as the “Wild West,” where anything goes. That’s why it’s even more important that leadership teams of major cannabis businesses are built on a foundation of integrity, reliability and compliance. Cannabis can only be normalized and prosperous when it’s built on trust.
Popular leadership thinking says that leaders can either be idealistic or pragmatic. The idea is that idealistic leaders give the vision of the desired outcome but aren’t particularly concerned with how the company will get there, instead only focusing on the goal. Pragmatic leaders are interested in the process, in how a business will get it done. While I think both are necessary at different stages in a process, the cannabis industry would certainly benefit from more pragmatic leaders.
The last piece of the puzzle needs to be a focus on innovation. I don’t just mean technology, even though I work at a fintech cannabis company. Innovation is more than making an app or building a technological solution. It’s about looking at a problem in a new way or finding unique approaches to resolving existing challenges.
The cannabis market changes on a yearly, monthly, weekly or even daily basis. Rules and regulations shift, a global pandemic can turn business on its head, and consumer behavior or perception can dramatically differ. It takes an innovative leader to find the right approach for each situation.
As the industry and community mature, I’m confident that cannabis will evolve. I’m excited to be a member of the leadership community, and I’m grateful to have met so many founders and executives who are a part of the future. With true leadership and collaboration, I think we will see incredible outcomes in this unique and unusual industry.
Source : Forbes