Let’s be honest. Nobody would pick me as the poster child for hemp.
I’m a small-town Kansas chick who grew up on a hog farm. I spent my formative years helping my dad lay irrigation pipe, delivering meals to a harvest field, and occasionally driving a grain cart. The closest I ever came to knowing anything about cannabis, was remembering to stay away from the “ditch weed.”
And in full disclosure – I knew the farm life wasn’t for me. After college, I ran away to the “big city” and cut my teeth climbing the corporate ladder in a publicly traded company. Even when Colorado became the first state in the union to legalize recreational marijuana, never not one time did I think to myself, “Gosh… Maybe I missed something in my life by not working in cannabis?”
Rather, I was busy overseeing $10 million dollar budgets, learning general business skills that the majority of the hemp industry is missing today.
It’s quite the conundrum… Massive amounts of passion for the plant, significant levels of “good intentions” around those who start hemp/cbd businesses, and a crap-load of cash to fool yourself into thinking everything’s ok.
But dare I say… Everything – is not ok.
Hemp is rarely run like general business – and while I recognize I’m about to ruffle a few feathers out there – I’m here to say, we need to turn over a new leaf and begin doing so asap.
Here’s an example…
A new business owner starts an extraction lab (or a processing facility, or a CBD product line, or a hemp ancillary business – take your pick). That owner then hires their friends and buddies to work with them. In fact, he/she also does a fabulous job of, “taking good care” of his/her employees by paying them well, offering them benefits they wouldn’t normally receive in a start-up, and lots of flexibility. The good news is, the margins for the product they’re producing are INCREDIBLE – and the business is quickly awash in cash!
However – as almost always happens in business – the market shifts. Prices drop. Regulations change. Banks freak out. Customers follow the new, “shiny” cannabinoid. Compliance requirements blow up like crazy. Marketing must be modified or the FDA will shut you down. And without warning, you find yourself in Facebook jail for a legal product.
Anything that CAN go wrong in hemp – DOES go wrong in hemp. The industry simply hasn’t stabilized and that means what was brilliant yesterday is f*cking you over tomorrow.
Hence, the reason why I’m so frustrated by bad business practices in hemp.
The initial financial windfall in hemp allows (and frankly, almost begs) people to make bad business decisions. Money covers a multitude of sins, until it goes missing. And you can’t hide a broken balance sheet when the income isn’t there.
If I were given the chance to wave a magic wand and ultimately bestow 3 of the most vital business skills on anyone currently in the hemp industry, they’d look like this:
1. TAKE TIME TO HIRE WELL. Perhaps your BFF does have an impeccable resume and is exceedingly accomplished in her field. Maybe she’s the whole reason to begin this crazy adventure in the first place – But if she’s not, then I IMPLORE you to take a deep breath and find the right person, by recruiting like crazy. If I’ve heard it once, I’ve heard it a thousand times… It’s not your amazing, life-changing product that’s your greatest asset. IT’S YOUR TEAM. And if you think you’re in the business of selling tinctures, or oil, or creams, or isolate, or edibles – you’re wrong. You’re in the people business. And you can’t possibly begin to sustain long-term growth in this industry with the wrong people on board. If that means firing your grandmother, by all means, grow a pair and do it. Your business is not worth losing because your heart got caught up employing your friends/family who have no ability whatsoever to advance your cause. Take care of your business first with the RIGHT people – or you will lose every single time. I promise.
2. PUSH YOURSELF TO IMPROVE. One of the things I preach over and over in Executive Coaching is that your team can’t improve, unless you choose to improve first. Your team will NEVER exceed your current skill set – which means, you need to push yourself to expand your capacity to lead. Listen to podcasts, read business books to challenge your current mindset, feed yourself a daily dose of something that will broaden your brain and force yourself to grow personally and/or professionally. Find someone who will hold you accountable for personal growth instead of keeping your head in the shifting sand of hemp. You need to grow – Otherwise, your team can’t grow. And if your team can’t grow – your business most certainly can’t grow. If you haven’t done so in a while, pick your head up and objectively take a good, hard look at YOU. Sooner or later, our own complacency always catches up with us. And if you haven’t pushed yourself to improve in recent months – I can almost guarantee, the leveling off of your company isn’t far behind.
3. DUMB FINANCIAL DECISIONS WILL KILL YOUR COMPANY. Seriously. Under-capitalization is rampant in hemp. Everybody needs more money yesterday. And I get it – most people who get into this industry are risk-takers at heart… But there are some very basic business skills when it comes to money that hemp folks are missing. Like creating a budget for every project and event. Then, stay under it. Maintain reserves. Coddle your top clients like crazy and never give them a reason to leave. Pay your employees what they’re worth – but stop over-paying them. If you can’t afford something, don’t buy it until you can. Get out of partnerships with the wrong people. Pivot when the market drops out. If your current business structure isn’t working, get creative and come up with new ways to adjust it. This isn’t a fantasy world where “good intentions” make a person rich. This is hemp. And everyone who “makes it” in hemp – is required to demonstrate massive amounts of flexibility. Become deft – not dumb – in your financial prowess. Protect your finances and strengthen your company, or watch it fade away when the sun sets on today’s golden ticket.
And that’s my case for better business skills in hemp. For more information on how to pivot your business model, cut your budget or fire your grandmother, feel free to reach out to me directly at The Hemp Business Advisors. It’s my honor to help business leaders reach their full potential in this crazy, cannabis game.
Carrie Cox
The Hemp Business Advisors
Co-Founder and Corporate Liaison