CEO of Compassionate Cultivation, a Texas medical cannabis producer and retailer
You started your business in Texas, which many consider too hostile to cannabis for a successful medical program. Why not start your business elsewhere?
Every state is different, and a lot of states don’t look at cannabis from the perspective of trying to allow an industry to flourish. A lot of people take shots at Texas for being tepid, overly restrictive, a challenging compliance environment. But, in reality, what that does is give us an ability to create a business within those confines that is a very stable entity.
When you do the segmentation on the market size and you look at the numbers, it’s not a business that would attract a lot of people if it’s a very narrow market. We looked at where Texas was likely to go, knowing that it was a big bet. The pace of change, the pace of expansion, isn’t the quickest in Texas. But we feel pretty optimistic.
There’s a lot of momentum in Texas. Being first in, having first-mover advantage, an industry leader in a market this size? I like where we’re positioned.
What lessons can Texas teach other cannabis entrepreneurs?
When you’re facing a skeptical audience, or selling something with a stigma associated with it, the only way to address it is head-on. Go to your skeptics and meet them and say: “Why don’t you come down? Come see our facility and see what we do.” When they leave, they don’t think, “That’s a marijuana company.” They think, “That’s a biotech company.” Their impression just changes.
If you’re in cannabis, you’ve got a couple jobs: No. 1, create a high-quality product, and No. 2, you have to run your business with transparency and integrity. And if you do those things, you’re going to have a much better shot at changing people’s opinions of what this industry is.
What’s your best hiring advice?
Go look for people who have deep domains of expertise not necessarily in the cannabis business. Find those people and apply them to the cannabis industry.
Find people with extraordinary marketing expertise for your marketing. For cultivation, find someone with a commercial cultivation background—not just someone who grows the best weed, but someone who has the expertise and experience to deal with supplier networks and running a supply chain and managing a grow. For extraction, don’t just look to the cannabis industry, but maybe the oil-and-gas (sector) or maybe the brewing industry. Take all these people, and you can be disruptive in the cannabis industry.
Some executives say it’s important to prepare for an economic downturn. Do you think that’s the case for cannabis?
As the cannabis industry gets larger, the impact of macroeconomics takes on a greater risk profile. I think cannabis as an industry is somewhat insulated, somewhat recession-proof. But the impact of a big market correction, in terms of capital that can flow in, that could pose some challenges.
This interview has been edited for length and clarity.