Kim Barker’s Post

Cannabis Firms Need to Grow Up “The works must be conceived with fire in the soul but executed with clinical precision”  Joan Miro The best way to achieve Miro’s precision in business is by fostering a professionally managed organization.  ‘Professional’ is a broadly used and often misunderstood concept. In my view, it’s about strong management, effective day to day practices and targeting specific outcomes.  Professionally run companies feature intangible norms like transparency and high standards as well as concrete things like SOPs and project management (PM) competencies.  There is a good correlation between a company’s level of professionalism and market & financial success (on average).   These firms tend to make better strategic decisions, have lower costs, and execute product initiatives with less operational and financial risk. Moreover, I have seen cannabis companies miss out on investment because they were perceived as ‘lacking maturity and institutionalized practices.’ Outside of cannabis, you would be hard-pressed to find a world-class firm that isn’t considered professional across most facets of its business.   While most LPs and MSOs have been raising their games, 3 gaps stubbornly stick out: 1. A lack of PM support Cannabis companies are operationally complex and require a high level of compliance. Employing PM staff and practices are a proven means of getting initiatives executed well, on time and on budget. In larger MSOs and LPs, running a separate PMO (project management office) is useful to coordinate different projects, allocate resources, and report up to senior management. 2. Insufficient strategic planning Weed firms face a litany of threats and opportunities, many of which involve big, proactive financial bets.  This environment necessitates understanding your consumer and market situation in real-time and frequently revisiting strategic assumptions.  A formal planning mechanism driven by a cross-functional planning team is vital to ensure systematic thinking is always guiding your firm’s decisions.  3. No Corporate Credo A credo are the standards, values and behaviors expected of every worker.  A company won’t operate professionally if their expectations aren’t defined and reinforced daily as well manifested through hiring practices, training schemes, and performance measurement systems.  To be truly effective, professionalism needs to be baked into your culture - and that often requires change. There is, however, a risk of overdoing things which can lead to excessive bureaucracy and reduced staff empowerment.   Cannabis firms also don’t want to lose their corporate superpowers like creative problem solving and passion. ‘Fit for purpose’ and practicality should be your organizational bywords.    🔔 Hit that follow bell to always get my unique, impactful content #cannabis #cannabisindustry #projectmanagement #professionalism #operations #PMO

4 Traits Every Cannabis Manager Must Follow “Leadership and learning are indispensable to each other” John F. Kennedy Building top-down managerial competencies is one of the most important but least acknowledged cannabis issues right now.  Possible reforms aside, 2024 is shaping up - correctly - as the year of operational acceleration. There’s a simple equation in business:  better managers = better financial performance.  However, like many things in cannabis that is easier said than done. Some impressive McKinsey research can help.  In 2014, the firm surveyed 189,000 people across 81 diverse organizations to determine which frontline manager skills & traits correlated with leadership and organizational success. McKinsey found that the secret to developing winning leaders and businesses is through encouraging the following 4 traits.  (I will apply them to the challenges found in most cannabis companies): 1. Operate with a strong results orientation Virtually every cannabis firm needs to keep driving down costs and upping its operational game in terms of production efficiencies, brand building and employee engagement.   To do this, leaders must choose and manage against the right metrics, tighten departmental & business unit alignment, and drive down accountability to the appropriate level. Successful managers are also priority-setters and sticklers around plan execution. 2. Be supportive Many cannabis companies have already banked the easy operational wins.  Achieving even better performance (e.g, increased productivity, more innovation and better decision making) will require more effort spent on collaboration, mentoring and training. Managers should also be modeling professionalism and transparency in all interactions.  All of these ‘soft skills’ must be a part of every manager’s tool kit. 3. Solve problems efficiently Running a successful cannabis business is about solving a myriad of small operational problems and putting in the analytical effort to crack bigger, more strategic ones.  Unfortunately, most companies and managers are ill equipped to do this because of a lack of skills, time, and problem-solving techniques, not to mention a failure to properly leverage data.  Effective problem-solving must be a foundational management skill. 4. Value different perspectives This notion should be self-evident but sadly is not in many teams and Board Rooms I know.  The ‘roots vs suits’ rift is but one expression of the hubris and blind spots plaguing many firms.   If one wants to make progress, the fix is relatively straightforward: hire for more diversity (of all types), insist on frank & open conversations, and reinforce empathetic managers. Cannabis businesses need strong frontline managers who can also nurture the next generation.  These 4 traits are a good, foundational place to start. 🔔 Hit that follow bell to always get my unique, impactful content #cannabisindustry #cannabis #MSOS #LPS #leadership #management

How many of these key factors and practices for going from "Good to Great" are in place in your cannabis company? One of my favourite business books is "Good to Great" by Jim Collins because it offers some powerful lessons for companies that want to make the leap from being good to GREAT. Here are the key factors👇🏻 1. Disciplined Leadership: Great companies are led by "Level 5 leaders" who selflessly combine deep personal humility with intense professional will. These leaders prioritize the company's success over their personal ego. How many folks like that do you see in the cannabis industry? I can count the ones I know on two hands. 2. First Who, Then What: this is about having the right people on board before deciding on a strategy. Great leaders focus FIRST on building a strong team and then figuring out what direction to take. King Solomon said there's wisdom in a multitude of counselors. Annette Verschuren once told me you need a diversity of opinions in your c-suite to be as good as you want to be. No one is an island, and your senior team makes a massive difference. 3. Confront the Brutal Facts: you've got to face reality head-on and make decisions based on the cold, hard facts. Don't sugar coat the truth or try to paint a more optimistic picture of the future than is likely. This practice fosters a culture of honesty and openness, and helps everyone engage in better strategic planning. 4. Hedgehog Concept: this involves identifying the intersection of three critical dimensions: what the company is deeply passionate about, what it can be the best in the world at, and what drives its economic engine. Companies that achieve greatness focus on their core competencies and avoid diversifying into areas where they cannot excel. Remember when Harley Davidson launched a luxury cologne? Yeah, me neither lol 5. A Culture of Discipline: Great companies maintain a disciplined culture, with employees adhering to a consistent system of rules and behaviors. This discipline allows for greater innovation within a structured framework, driving sustained growth. Despite an onerous regulatory framework surrounding them, most cannabis companies have a fairly undisciplined culture, due at least in part, to the untraditional nature & background of many cannabis entrepreneurs. 6. Technology Accelerators: While technology alone cannot make a company great, it can act as an accelerator when aligned with a well-conceived strategy. Great companies use technology as a tool to enhance their unique strengths and strategic goals. How many innovations have we seen in the cannabis market since legalization? Infused pre-rolls, 30%+ THC weed, a prevalence of minor cannabinoids in products are just a few. 7. Flywheel Effect: Transformation from good to great isn't a sudden, dramatic event. It's a gradual process of building momentum. Consistent, disciplined actions build over time, creating a powerful flywheel effect that drives the company forward.

Leadership Lessons from the Cannabis Industry: Managing a cannabis dispensary isn’t just about sales or inventory; it’s about navigating a unique and ever-evolving landscape with resilience, adaptability, and a commitment to both community and compliance. One of the biggest lessons I’ve learned is the power of transparency. In an industry often misunderstood, being open with both our teams and our customers builds trust and credibility. Clear communication, especially around regulations, pricing, and product quality, helps to demystify cannabis and create a safe, welcoming space for everyone. Another lesson? Empathy is essential. Customers come through our doors with diverse needs and experiences—some are seasoned, others are brand new. Leading a team that can educate, guide, and make each person feel heard is what turns a transaction into a relationship. And, of course, adaptability is key. The cannabis industry shifts quickly. Regulations change, products evolve, and so do consumer expectations. As leaders, we have to stay agile and open to learning to keep up, which also means investing in our teams and empowering them to grow with us. In the end, leading in cannabis is about more than managing a business; it’s about shaping an experience and building a community. It’s challenging, but it’s the most rewarding journey I could ask for. What leadership lessons have you learned in unique or emerging industries? #CannabisIndustry #LeadershipLessons #CustomerExperience #Transparency #EmpathyInBusiness #CommunityFirst #CannabisLeadership

Dereliction of Duty: The Dangerous Silence of Cannabis Staff “Lyndon Johnson was a profoundly insecure man who feared dissent and craved reassurance” H.R. McMaster If you don’t know General H.R. McMaster you need to.  He is an acclaimed American general, scholar (Stanford) and former National Security Advisor.  McMaster is the author of Dereliction of Duty, a study of leadership and decision making in the Johnson Administration during the Vietnam War.  As the title asserts, McMaster excoriates many civilian and military leaders for not speaking up and allowing the US to lapse into the Vietnam War quagmire. According to the General, Johnson was a flawed leader but was also ill-served by a faulty analytical and decision-making process that arose from a soup of bureaucratic (e.g., weak information flows), strategic (e.g., outdated constructs) and team (e.g., institutional rivalry) failings.  In essence, a flawed President was making complex strategic decisions, cut off from dissenting opinions and ‘on the ground’ feedback. McMaster’s insights are germane to how cannabis firms are run as well as the responsibilities of staff vis a vis management. Fact is, many cannabis business failures can be blamed on similar dysfunctions, particularly in areas like production builds, product launches and hiring practices. Cannabis companies need more, not less, input from a variety of knowledgeable people especially when it comes to difficult, high-risk decisions. Staff, however, must think and act like true stakeholders, especially if they seek a greater share of profits - and have their opinions taken seriously. This includes not shit posting on social media or behaving like ‘I told you so’ spoilers. Setting the tone right from the top is crucial.  The CEO should encourage and expect all workers to speak up any time, without the threat of censure. For major issues, this engagement requires more than just an opinion.  Serious opinions should be buttressed with facts and delivered dispassionately focusing on metrics leaders care about such as risk, profit or ROI. However, we must be realistic - and patient.  Many employees will be reluctant to lean in, fearful for their jobs, insecure with their skills or lacking a suitable forum to speak up.  Companies can do their part to promote broad engagement by: 1. Encouraging leaders to walk the production floor and proactively engage the rank and file; 2. Adding contrarians (internal or external) into planning and decision-making activities; 3. Including cross functional participation in major initiatives; 4. Canvassing the input of customers and suppliers though direct outreach and advisory panels. 🔔 Hit that follow bell to always get my unique, impactful content Subscribe to my free newsletter (link in comments), the Cannabis Management Review, for more unique content. #cannabis #cannabisindustry #leadership #management #MSOS #LPS

The One Measure Every Cannabis Firm Needs to Care About All MSOs and LPs want to reduce/avoid cost and increase profits over the long term. After capturing the low hanging fruit (e.g., implementing layoffs) what is left to do, short of divesting assets?  Boost productivity. Productivity is about getting more output for a given input.  Think of it as increasing the number of PCs you could produce over a period with a given workforce and asset base.  However, productivity is much more than throughput.  Highly productive companies can also defer hiring, scale easier, and limit costly errors.  Some will disagree, but the impact on your workforce is irrefutable:  productivity gains lead to higher wages, more engagement, and enhanced skills. Productivity is a simple idea but with lots of complexity.    In my experience, unlocking productivity gains require improvements in one or more of the following drivers: 1. Raising employee skill levels through regular training schemes;   2. Deploying labour saving automation and IT; 3. Cutting organizational flabbiness (i.e, bad practices, rules and structures) and;     4. Optimizing compensation programs to incentivize greater effort, innovative thinking etc. Before embarking on a productivity-lifting journey, it’s important to know where you want to see improvement and how you will measure it. Some commonly understood (albeit crude) productivity metrics are units or kgs produced or revenue per employee.  With today’s market dynamics, some MSOs and LPs may want to consider gross profit or net income per employee as their measure. Choosing the right mix of productivity drivers will depend on your business model, quality of management, level of IT & organizational development and culture.  Some methods such as tweaking sales team quotas can yield quick results but also introduce bad behaviors.  Other strategies like upskilling your staff could take a year or two to generate a ROI. The rate of productivity growth also depends on your starting point.  If you begin with a low level of IT, automation or skills, the incremental return on capital and productivity jumps will be very high. However, the improvements tend to slow down after initial or big leaps.  There’s no ‘silver bullet’ to boosting productivity.   Enhancements in areas like cultivation yields or marketing performance will typically advance at a ‘slow burn’ pace.  My cannabis data suggests that about 50% of productivity rewards happen when each worker has more data, IT and equipment at their disposal - and knows how to use it.  Increasing productivity, therefore, will be as much about investment as anything else.     Subscribe to my free newsletter (link in comments), the Cannabis Management Review, for more unique content. 🔔 Hit that follow bell to always get my unique, impactful content #cannabisindustry #productivity #cannabis #operations #costs #cannabiscultivation #MSOS #LPS

Should Politics Be Welcome in Cannabis Firms? Political and social turmoil in North America is turning companies (including cannabis firms) into a battleground of competing opinions and ideologies.  You can’t escape the spicy disagreements around the water cooler or canna-friendly social platforms like X, Instagram and LinkedIn. Yes, strident agitators are in the minority and often cooler heads prevail.  But not always.  The Google, Disney, and Netflix cases are the tip of a larger iceberg. Check them out.   I’ve witnessed corporate turmoil firsthand in weed businesses around many issues ranging from who someone supports on November 5 to more prosaic concerns like remote working.  Cannabis firms are particularly vulnerable to discord.  The painful legacy of the War on Drugs continues to scar our community and spill over into corporate deliberations & decisions.  Cannabis is populated by many young, social justice-oriented types who spend much of their life online.  The ongoing presence of an illicit market and its progeny, the ‘roots vs suits’ dialectic keeps economic and class issues front and centre.  Finally, industry problems drive worker insecurity, which can lead to greater conflict. All of this is a recipe for workplace toxicity and bad decision making. Heres why: 1.       Divisiveness reduces employee engagement.  Many workers are less likely to be engaged (or stick around) if their company is insufficiently strong on certain issues or takes positions at odds with their beliefs. 2.      Polarization minimizes diversity A Boston College study found that between 2008 and 2020 the executive teams at S&P 500 firms were more likely to be dominated by people affiliated with a single party.  In effect, managers tend to recruit/seek out people who share their political views thereby creating an echo chamber. 3.      Dissension reduces collaboration up & down and across the organization, reducing productivity and integration. 4.      Partisanship skews decision making.  A recent study out of the Chinese University of Hong Kong finds that American managers increased investment when their preferred party gained control of the Presidency.  Not surprisingly, this investing criteria did not work: it was correlated with lower valuations and profits. Finally, overt politicking is a unnecessay distraction and could end up being a pox on your personal and corporate brand. The negative implications extend to the gig economy. When freelancers bring their authentic but strident opinions to public forums, they repel potential clients and pollute business-oriented spaces. In the old days, disagreements had little material impact in the workplace.  Not anymore.   Bosses need to figure out how to manage in this 'new normal'.  Frankly, I am not sure how. Do you? 🔔 Hit that follow bell on my profile page to always get my unique, impactful content #cannabis #cannabisindusty #cannabiscommunity #socialjustice #USelection #cannabisusa

Why Have the MSO CEOs Left? As of today, 4 of the top 10 US cannabis companies have exited their CEOs this year. Do these changes herald a cannabis industry trend or is something else afoot? Like everything in cannabis, its complicated. Context is key CEO exits are a natural feature of US corporate life and something that should not automatically be seen in a negative light.  They leave (or more frequently, are asked to leave) for a variety of legitimate reasons including vision misalignments with their Boards, unethical behaviour, or simply poor performance. Shareholders have become an impatient lot. The shelf life of American CEOs is getting shorter.  According to Harvard Law School, the median tenure among the S&P 500 companies has decreased 20% from 6 years in 2013 to 4.8 years in 2022. I don’t have similar data for the cannabis sector, but turnover is not unheard of.  Some CEOs just get fed up.  Running a cannabis business is very hard.  Most MSOs are built like start-ups, replete with talent gaps and immature practices & cultures.  In most cases, the role is not all it’s cracked up to be.  Cannabis CEOs get paid less (on average) and are hassled more than their non-weed peers. I have observed some terrific CEOs at world class firms.  These companies have effective Boards and support their CEOs from day one. The boss’s boss Boards have a fiduciary responsibility to shareholders.  This includes hiring, guiding and firing CEOs.   Ultimately, the CEO buck stops at the Board’s door.    Boards lacking sufficient sector and business knowledge cannot provide the requisite strategic guidance or identify risks. Dysfunctional Boards are a distraction, slowing and politicizing important decision making.  When Boards are not sufficiently engaged or thinking independently, they will often fail to hold the CEO accountable.  Finally, many cannabis Boards do a poor job at defining the right role, expectations and metrics for their CEO. Good Board support begins with strong governance mechanisms but goes further.  High performing Boards are good judges of leadership talent. They will also provide CEOs with informed strategic counsel & risk management, coaching and objective feedback, plus pitch in with key activities like raising money and engaging governments.      A supportive team The CEO’s colleagues also matter. Effectual CEOs have teammates who provide him/her with timely and accurate information on the business, culture and customers – but also empathy and prudent advice. When a new CEO shows up, the staff will have an on boarding plan ready to bring him/her quickly up to speed. The cannabis stakes are high. CEOs who don’t cut the mustard need to go. However, Boards must also ensure they are putting the right person in a properly defined role and are set up for success. 🔔 Hit that follow bell to always get my unique, impactful content #cannabis #cannabisindustry #CEO #management #MSOS   

Good post, I was going through all of the broader corporate CEO turnover in 2024 alone, it's been dynamic, even for big brands such as Nike & Starbucks! It reminds me of one of my fav books, 'The Hard Thing About Hard Things'. ZIRP was a 'peacetime CEO' period... we've been more in a 'wartime CEO' phase as businesses dig in to drive to improved fundamentals. In these times of getting scrappy and lean and searching for sustainable growth, there will be change, especially in #cannabis.