This session and other content from MJBizCon 2020 are available upon request.
The coronavirus pandemic has forced the marijuana industry to grow and now offers companies a unique opportunity to reassess their business strategies, including retail locations, a senior industry manager said at MJBizCon 2020 on Friday.
It's a tragic situation, but it's exciting what it brought into the cannabis room, said Joe Caltabiano, founder of the JSC Fund, a cannabis investment company and co-founder and past president of Illinois-based multistate operator Cresco Labs.
In a virtual session titled "Preparing for Recovery: Lessons Learned to Move Strategically," Caltabiano said the pandemic had not only driven revenue – many states declared marijuana companies "essential" – but the cannabis industry forced to:
- Manage supply chain disruptions.
- Redesign of the shops for more security.
- Invest in technology to both improve customer communication and speed up ordering and checkout.
"It really forced the industry to come of age," said Caltabiano, noting that the coronavirus pandemic "has put the industry forward five years".
But marijuana operators, he said, must constantly reassess their businesses and prepare for the next crisis or disruptive event. Caltabiano said it could well be a marijuana rescheduling, federal legalization, or interstate trade.
For example, federal marijuana reform could have a positive impact on the country but disrupt your business.
So play out what-if scenarios and determine whether you are missing any important business components.
Caltabiano said Cresco, for example, initially didn't have a retail branch and realized that this was a component it needed.
He shared some practical tips for marijuana operators:
- Reevaluate retail locations. Many companies have likely selected less than ideal locations. This is an opportunity to potentially select properties with better roadside and drive-through options and a more convenient location.
- Reevaluate who needs to be in the office and whether you can have more shared space and remote workers. Any money saved on office space goes into the bottom line or can be reinvested in other business areas.
- Re-evaluate cultivation, processing and distribution. Industrial corridors may have made sense in the past, but that is changing as local authorities realize that the industry is growing revenue and bringing in talent. If you want to expand, consider placing such activities closer to the city centers, which will also help attract talent.
- Communicate with your investors regularly to maintain trust and expand your investor base. Don't sugarcoat it, talk about some of the positives that come out of this current environment. You need that level of confidence for the next round of funding or capital opportunity.
- Constantly assess your talent and make sure everyone is in the right place and that you are preparing for the next round of growth.
– Jeff Smith