The rapidly growing cannabis industry is set to quintuple from $8 billion in revenue during 2018 to $41 billion by 2025, according to recent Nielsen data. These numbers mean major investments, new career opportunities, and the chance to build and scale startups at a competitive speed. Although not yet federally legal, cannabis already has proven to be a lucrative industry.
At HerbForce, we’ve seen increased demand among cannabis brands for seasoned high-level executives to fill key roles on leadership teams.
Cannabis companies are growing at significantly higher rates than traditional food and beverage brands. Many of the cannabis companies that are just “getting started” already are generating $10 million to $30 million in annual revenue. Because of this initial growth, founders and other like-minded executives are preparing for long-term growth with the vision of becoming a $100 million to $200 million business within a few years.
To meet expectations, cannabis employers look for leaders who can adjust to rapid growth and have established backgrounds in bringing companies to scale. They seek executives who can operate comfortably at every level of company expansion from $5 million to $200 million. More than that, they want to hire for the long term, seeking candidates who can advise them about how to get from one level to the next. Their ideal candidates are comfortable with controlling cash flow from a few million dollars in revenue to hundreds of millions of dollars in revenue. These candidates should meet the supply-demand paradigm at every step of the company’s progress and create a strategy based on already achieved growth. Scaling so quickly, cannabis companies need to be able to apply all the necessary expertise.
CPG professionals bring value
Many companies are looking to similar consumer packaged goods (CPG) sectors like food and beverage when it comes to identifying top talent. Although cannabis is a new field that presents a variety of opportunities, it’s still a consumer product. While it’s not uncommon for brands to focus on purely cannabis, products often are presented in the form of supplements, oils, creams, edibles, and beverages that are similar in packaging and marketing practices to beauty and food brands.
Taking all that into account, cannabis companies looking to scale benefit from hiring classically trained CPG professionals who know what it takes to build a consumer brand. If we break down the scaling and development of a cannabis brand, the core elements—the key team functions—that go into the strategic plan are similar to those of other successful CPG brands: sales, marketing, finance, operations, e-commerce, etc.
Food and beverage veterans have begun to turn their attention to cannabis as a promising vertical that offers incredible opportunity for ownership and potential for long-term growth.
There is a lot of natural synergy and crossover in team building that can be borrowed from traditional CPG brands and applied directly to cannabis. A marketer who is creating awareness at the local level, in the field, or above the line still knows how to deliver a message to consumers, regardless the kind of product. A salesperson or sales strategist creates and maintains relationships with distributors, leverages said distributors, manages margins with retailers, develops a brand portfolio, drives volume, and represents a brand in a positive way.
An operations professional manages logistics and inventory, oversees the whole supply chain, deals with co-packers, and monitors orders. A candidate for a finance team in any CPG vertical should be able to raise capital, manage cash flow, provide financial insight, and assess the risks, issues, trends, and opportunities in the industry.
Cannabis companies require candidates who can perform the same duties in order to grow their brand.
Building a leadership team
Cannabis companies must consider how much experience with scale ideal executive candidates should possess. Many companies prefer candidates to have more of a large-scale background due to the rapid growth of the market. They tend to seek candidates from large CPG organizations like The Coca-Cola Company, Unilever, or Del Monte Foods. This trend is rooted in the idea that executives or C-level candidates from larger organizations understand the kind of scale required to build brands in a new space. However, smaller, emerging companies are more inclined to seek executives who have experience with high-growth startups. Cannabis companies want candidates who understand and have experience in dealing with different brands, various products, strategic planning, and departments within a company.
Any entrepreneurial company, regardless its vertical, wants to build a strong executive foundation, which starts with developing a strong leadership team of experts who will drive a brand’s success. This demand among cannabis companies seeking executive CPG candidates is becoming a prominent trend because it is met with CPG candidates’ willingness to switch gears. Food and beverage veterans have begun to turn their attention to cannabis as a promising vertical that offers incredible opportunity for ownership and potential for long-term growth. For many, it’s a once-in-a-lifetime chance to pioneer a new industry that has already achieved incredible momentum. To them, cannabis offers exciting financial potential and an opportunity to be part of a sector that is on the precipice of scaling tremendously.
Devin Penhall is director of client strategy for ForceBrands’ specialized cannabis division, HerbForce, where he aligns talent from the consumer packaged goods landscape with cannabis brands. Previously, he worked in sales, brand development, and event marketing for Red Bull North America. He graduated from Loyola Marymount University with a bachelor’s degree in communication.