(Editor’s note: This story is part of a recurring series of commentaries from professionals connected to the cannabis industry. Nancy Whiteman is CEO at Boulder, Colorado-based Wana Brands infused product company. Want to hear more about her views on recession? Join our live Instagram chat with her at 4 p.m. ET on May 7.)
This global pandemic is forcing every industry – and person – to face its own set of challenges and new realities.
The cannabis industry is at even greater risk because we have no federal support, no access to standard banking, greater supply-chain issues … and the list goes on. It’s easy, then, for irrational behavior to take over.
How do we prevent what is undoubtedly a severe recession from becoming a depression?
Rationality and a sense of common cause is one answer.
If we act in a knee jerk way in the absence of real data, everyone collectively pulls back, up and down the supply chain.
Dispensaries get scared because sales are erratic, so they pull back on paying vendors.
Vendors start getting concerned because revenues aren’t keeping with outlays for cost of goods, and they start pulling back on paying partners.
At some point, fear becomes a self-fulfilling prophecy. As an industry, we’ll find ourselves with a failing industry despite strong demand.
We can’t let fear run the game.
Businesses helping businesses
Instead, let’s tap into the “all in this together” strength that comes from adversity and get creative.
How can we help each other so that we support our fellow businesses up and down the supply chain as well as supporting our own organizations?
As a small example of this type of thinking, at Wana we are offering a 10% discount to our dispensary partners with outstanding accounts receivables who were willing to pay in a timely manner, regardless of how old the account is.
That helps our partners with their cash flow, and it helps us get money to Wana.
Now is the time to think win-win.
If you are having cash-flow problems, don’t avoid the hard conversations.
Instead, be transparent and work together to find solutions that are good for both parties so that everyone can plan appropriately and not be spooked by the unknown.
Human element, prudent business practices go hand-in-hand
Place the human element squarely in the middle of your business’ decisionmaking – there are people on both sides of the transaction.
Of course, we all have to look at our budgets, our cash flow and the real metrics that drive our business. That’s prudent business thinking.
What is not good business thinking is to hoard cash for the unknown, at the expense of our vendors, partners and the industry.
It is incumbent upon those of us who can do it to keep the money flowing and behave rationally.
I’m proud of this industry, of what we have collectively built.
I want to see us ready to put those gloves back on for another round of fighting for legalization once the dust of COVID-19 has settled.
The only way we can do that is by holding ourselves to the highest levels of transparency and integrity as we collectively find our way through these dark times.
Nancy Whiteman can be reached through her LinkedIn page.
The previous installment of this series is available here.
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For more of Marijuana Business Daily’s ongoing coverage of the coronavirus pandemic and its effects on the cannabis industry, click here.