Veteran consumer packaged goods executive Beena Goldenberg sees parallels between the development of the natural organic food market and the cannabis industry.
Rigorous executive discipline, a more thoughtful approach to mergers and acquisitions and targeted product innovation are important factors for corporate success in the cannabis space, she said.
Before joining Toronto-headquartered Supreme Cannabis as CEO, Goldenberg headed up Hain-Celestial Canada – a successful producer and distributor of foods and products.
Goldenberg grew Hain-Celestial Canada from 40 million Canadian dollars (CA$30 million) in revenue in 2005 to more than CA$300 million ($221 million) in 2019.
Instead, she asks: “What are the consumers looking for? Where do we have to be?”
“I watched over the years how (the natural organic segment) matured to a more disciplined, traditional type of operation. I think the cannabis industry is going through the same thing now,” Goldenberg said.
Marijuana Business Daily spoke with Goldenberg about cannabis business strategy and the challenges associated with taking over a company amid a pandemic.
How have you facilitated communication with your team in your first month amid the pandemic?
We’ve been trying to make sure ongoing communication is happening.
We’ve done virtual town halls every two weeks.
We have updated calls with broader audiences, just to keep the communication flowing. We have Q&A sessions.
The most important thing is keeping those connection points. We have leadership-team touch-base calls three times a week.
We’re really focusing our effort on making sure people still feel connected, still being part of the team to help drive it forward.
The most important thing is keeping those connection points.
A lack of discipline and focus has been an issue for some large Canadian cannabis firms. How is better discipline applicable to the cannabis industry?
In traditional CPG companies, the things executives focus on are how to optimize high-volume production environments, getting a deep understanding of the consumer and how to deliver products to retailers in the most effective way.
It’s all about disciplined approaches to demand planning, category management and product innovation.
Those are things that traditional CPG companies do very well. They fine-tune those processes over the years, and this is how they drive profitability.
That discipline coming into the cannabis industry will drive more companies to be more profitable moving forward.
Is part of executive discipline a focus on core competencies and competitiveness?
Being disciplined is about evaluating all the different opportunities and deciding where you think you can win, and where you can get the most return on your investment.
The change as this industry has matured is that there is a view now to (focus on) profitability.
We have to be businesses that survive the longer term, and as a result, it’s not purely (about) investing all over, but it’s focused on where you are going to invest and where you will see returns.
It’s about being choiceful about where you want to play, and where you believe you have the differentiation to win.
Women account for a small percentage of boardroom positions in the cannabis industry. How is a more diverse board better for business?
I’m encouraged because I strongly believe that if you have a more diverse team, you get to better decisionmaking. People are coming at items from different perspectives.
Interestingly, at Supreme I’m quite impressed with the diverse leadership team we have.
That gives us an advantage, because we better represent the needs and preferences of our diverse consumers. It helps (us) make the right decisions.
Do I think it’s changing over time? Yes. I want to see it change more, because I think it adds value to businesses.
Is your Craft Collective initiative an opportunity to work with micro-producers?
Craft Collective is a good example of how we can quickly respond to what consumers are looking for.
We’re sourcing cannabis for select markets based on unique consumer demand in that market.
To the micro-cultivators, I say we are looking for producers who are growing interesting strains using high-quality practices that are consistent with what (Supreme Cannabis brand) 7Acres is all about … and achieving those desirable sensory characteristics and strong terpene profiles.
We recognize that a lot of the producers have ambitions to eventually own their own brand and sell into the marketplace, but they might not have the right licenses yet or processing capacity.
For the interim, it’s a great opportunity to go to market with the 7Acres brand, and it’s a great opportunity for us to quickly bring new strains to the marketplace and keep cannabis enthusiasts interested in the brand.
Do you think some cannabis companies were too focused on the size of their greenhouses at the expense of satisfying customers?
Back to my CPG discipline: I don’t believe in “if you build it, they will come.” I believe in “what is the demand?” and producing products to meet the demand that’s out there.
You can differentiate yourself on quality. It’s not just about tonnage.
I think we want to stand on our quality differentiation moving forward.
How do you evaluate international opportunities?
Our focus at Supreme is the Canadian marketplace, (but) we do look at some short-term opportunities in the international market.
They have to be capital-light opportunities that drive incremental revenue. We recently shipped medical cannabis to Israel under our Truverra brand.
I’m not ruling that (international opportunities) completely out of the equation, but it is going to be opportunistic.
There has to be a way to monetize the inventory. It’s not “to build it so they will come.”
It’s an ability for us to achieve good gross margins. We won’t exclude those opportunities, but it isn’t our core focus.
Our core focus is Canada.
This interview has been edited for length and clarity.
Matt Lamers is Marijuana Business Daily’s international editor, based near Toronto. He can be reached at [email protected].