Mitchell Osak’s Post

I was honoured to contribute some branding & marketing insights to the exciting 2024 summer issue of Grow Opportunity Check it out. https://lnkd.in/gh46f7wh

Raise Your Strategy Development Game With growth, reform and cash flow comes bigger, riskier strategic and funding decisions. Cannabis firms cannot afford to fly by the seat of their pants or make calls based on gut feel or cursory analysis. My strategy facilitation support will help your company make the right decisions, faster and with more buy-in.  The services can- 1. Overcome your team’s paralysis & conflict with bespoke techniques & tools 2. Deliver a comprehensive financial, market and consumer analysis 3. Provide a ‘danger check’ assessment of big, high-risk moves Let's chat about how my unique facilitation support can drive your business performance. #cannabisindustry #strategy #cannabis #management #strategicplanning #research

The One Measure Every Cannabis Firm Needs to Care About All MSOs and LPs want to reduce/avoid cost and increase profits over the long term. After capturing the low hanging fruit (e.g., implementing layoffs) what is left to do, short of divesting assets?  Boost productivity. Productivity is about getting more output for a given input.  Think of it as increasing the number of PCs you could produce over a period with a given workforce and asset base.  However, productivity is much more than throughput.  Highly productive companies can also defer hiring, scale easier, and limit costly errors.  Some will disagree, but the impact on your workforce is irrefutable:  productivity gains lead to higher wages, more engagement, and enhanced skills. Productivity is a simple idea but with lots of complexity.    In my experience, unlocking productivity gains require improvements in one or more of the following drivers: 1. Raising employee skill levels through regular training schemes;   2. Deploying labour saving automation and IT; 3. Cutting organizational flabbiness (i.e, bad practices, rules and structures) and;     4. Optimizing compensation programs to incentivize greater effort, innovative thinking etc. Before embarking on a productivity-lifting journey, it’s important to know where you want to see improvement and how you will measure it. Some commonly understood (albeit crude) productivity metrics are units or kgs produced or revenue per employee.  With today’s market dynamics, some MSOs and LPs may want to consider gross profit or net income per employee as their measure. Choosing the right mix of productivity drivers will depend on your business model, quality of management, level of IT & organizational development and culture.  Some methods such as tweaking sales team quotas can yield quick results but also introduce bad behaviors.  Other strategies like upskilling your staff could take a year or two to generate a ROI. The rate of productivity growth also depends on your starting point.  If you begin with a low level of IT, automation or skills, the incremental return on capital and productivity jumps will be very high. However, the improvements tend to slow down after initial or big leaps.  There’s no ‘silver bullet’ to boosting productivity.   Enhancements in areas like cultivation yields or marketing performance will typically advance at a ‘slow burn’ pace.  My cannabis data suggests that about 50% of productivity rewards happen when each worker has more data, IT and equipment at their disposal - and knows how to use it.  Increasing productivity, therefore, will be as much about investment as anything else.     Subscribe to my free newsletter (link in comments), the Cannabis Management Review, for more unique content. 🔔 Hit that follow bell to always get my unique, impactful content #cannabisindustry #productivity #cannabis #operations #costs #cannabiscultivation #MSOS #LPS

Puncturing 3 More Cannabis Myths “The way in which we see things can hardly be distinguished from the way in which we wish to see them.” Joseph Schumpeter My recent post on cannabis myths (link in comments) garnered a lot of positive engagement, including private messages. Thank you.  Many DMs wanted me to address some other industry myths.  Here goes- 1. “North American Cannabis is a growth industry” Yes and no - and not for everyone. Without a doubt, new/pending markets are accretive to the total market. And many existing jurisdictions such as New Jersey and New York have plenty of growth left in them.  However, some mature markets like Colorado, Illinois and California are experiencing (legal) market flatness and even decline.  It’s reasonable to believe that tax and regulatory reform could fix this but that’s hardly a consolation for a retailer or producer seeing their revenues and profits dipping NOW in the hope something changes LATER. If they are not well-established in mature markets or targeting new ones, some MSO will find themselves struggling to find profitable growth. Finally, market size and growth is important but not in itself, sufficient.  There is no guarantee firms will be profitable or sustainable.  See Canada. 2. “My brand/product is different” Are they really that different, and on what basis? If a mass cultivated strain like Blue Dream was Pepsi challenged (i.e. blind smoked), I doubt most consumers could tell which brand is which or if they were even smoking Blue Dream. Fact is, there are few strong brands in cannabis; widespread product confusion and misunderstanding continues to plague the sector. Being different also doesn’t mean your brand will be desired. The point(s) of difference must be meaningful to the channel & consumer and marketed well to deliver sales. 3. “Most Americans want legalization and decriminalization” Yes, according to polls.  The inference is that these people will support our goals. However, one should be mindful of Carl Jung’s dictum, “You are what you do, not what you say you will do.”     Sadly, most people don’t back up words with support.  To achieve legalization, individuals need to take action such as voting for pro-cannabis politicians, contributing to advocacy groups and purchasing from legal businesses. This goes for cannabis companies too, in terms of supporting industry lobbying and legal efforts (e.g., Boies lawsuit). Encouragingly, stigma is fading. However, reducing stigma doesn’t mean you are creating legions of pro-legalization soldiers; it might just mean more apathetic fence-sitters. Finally, we need to acknowledge that the current regulatory mish mash benefits some groups including certain MSOs, illicit players and, yes, consumers.  They will prefer the status quo. 🔔 Hit that follow bell to always get my unique, impactful content #cannabisindustry #cannabis #MSOS #myths #cannabisusa #cannabiscommunity #cannabiscultivation  

Dispelling 3 Cannabis Myths “The greatest enemy of knowledge is not ignorance; it is the illusion of knowledge.” Daniel Boorstin I’m often stupefied by the cannabis culture wars raging online.  I get that many take them seriously but like other issues these days, the interactions generate more heat than light i.e. they don’t lead to sector unity or smart business & policy making. Why is that? One reason has to do with the beliefs regularly tossed around.  While appealing on the surface they often lack substance and credulity.  Let’s unpack just 3 (paraphrased) myths: 1. “We produce the best quality products” Really?  Is there a best car brand, wine or fashion designer?  Of course not. Yet these kind of bold statements underpin the strategy of many cannabis producers. In cannabis, the ‘best’ is subjective, difficult to measure and relatively short term in nature not to mention irrelevant to what really matters.  Your goal should be to constantly produce a level of quality (i.e a product feature set that meet needs states) at a price your target consumer is happy to pay. If you want to create a sustainable business, the best product could be your ticket but most often is not. 2. “Cannabis entrepreneurs are unique” Yes, to a point insofar as each entrepreneur is a unique person. However, after speaking to thousands of cannabis founders I have concluded that they are not all that different from other entrepreneurs.  When you get beyond the ‘cannabis is medicine’ style platitudes, you’ll find their concerns turn quickly to mundane issues like cash flow, employee turnover and service levels. There is one aspect of many cannabis entrepreneurs that is exceptional:  their background in the OG market.  While critical to understanding consumers, strains etc. this legacy can also blind the operator to dealing with conventional business needs as well as learning from people outside their bubble.  3. “The cannabis community believes…” This belief takes first place in the reductive Olympics.  Outside of shared ‘War on Drugs’ experiences and motherhood hopes like legalization there is little uniformity within the broad cannabis community.  To say otherwise is to gloss over many different voices, locales, and experiences, not to mention their ideas for addressing pressing challenges such as furthering social equity or lobbying for smart regulatory policies. Plenty of bad actors try to speak for the weed community, ignore basic economics and smother dissent. On the other hand, many corporate types cynically pay lip service to the community and disregard their interests - but not their wallets. Perpetuating bad myths wouldn’t really matter if the industry stakes were low and the consequences of bad thinking were trivial. Alas, this isn’t reality.  Its time many took off their rose-colored glasses. 🔔 Hit that follow bell to always get my unique, impactful content #cannabisindustry #cannabis #cannabiscommunity

Cannabis Brand Proliferation:  Clean-up, Aisle 2 It doesn’t matter if you are a retailer or producer:  Competitive and internal dynamics will inevitably lead to you stocking an excessive number of SKUs leading to overlapping brands and bloated inventories. The best way to fix this is by rationalizing your product portfolio, via: --> Identifying the underperforming SKUs --> Culling them according to financial and strategic criteria --> Optimizing your business practices to ensure this problem doesn’t return My SKU rationalizing efforts have delivered a 14x ROI behind new cost savings, reduced inventories and renewed brand competitiveness. This should be you. Send me a DM to discuss how we can clean up your underperforming brands and SKUs #complexityreduction #SKUs #brands #cannabisindustry #cannabis #MSOS #LPS

Cannabis Pubcos:  Is it Time to Go Private? “The definition of insanity is doing the same thing over and over again and expecting different results”  Albert Einstein It’s no secret that cannabis valuations are in the crapper, down ~90% from their Feb 2021 highs and ~38% from April 30 when Rescheduling (major industry news!) was first reported. Every positive development is met with an initial share bump followed by a disappointing drop.  Rightly or wrongly, cannabis is seen by most investors as a failed industry especially when you compare returns to other trendy sectors like AI.  Not surprisingly, cannabis firms are hoping with bated breath that RIII and SAFER happen in 2024.  Sadly, hope is not a strategy to boost your share price. It’s time many Pubcos came to the realization that their true market value will not be fully realized till legalization - which won’t happen for at least 5 years.  I understand their initial impetus to go public and the reasons for staying the course.  However, it no longer makes sense for most publicly listed companies for the following reasons: 1. Major capital markets gaps A lack of liquidity, short sellers, a dearth of institutional capital, poor research coverage and missing custodial services will limit valuation upside till full legalization.  SAFER (depending on what’s passed and when) may help but there is that forlorn hope thing, again.  Uplisting is beneficial to a point but has shown to be no remedy for a depressed share price. 2. High cost and stress Pubcos pay millions in regulatory and professional services fees plus expend considerable IR and management effort.  Your brand and CEO frequently get pummelled by disgruntled retail investors and shit-talking online commentators. Finally, the disclosure requirements and scrutiny are not to every firm’s liking. 3. Equity market headwinds Persistently high interest rates are dampening valuations, constraining M&A activity, constricting risk capital and introducing serious downside market risk. IPOs for plant-touching firms remain out of the question. Greener pastures don’t exist in weed-friendly markets such as Germany.   The Deutsche Börse CEO called the Frankfurt Stock Market ‘A Junk Shop’  Its DAX index is trading at a record 25% discount to the US S&P 500. 4. Other financing options are available Companies don’t need the public markets to raise capital.  There is lots of available debt funding plus copious amounts of dry powder sitting with private funders. Cannabis leaders, it’s time to accept a sad reality: your share price is unlikely to appreciably rise without legalization.  Buybacks might help but they are not a long-term panacea. For Pubcos with market caps below $100M, the juice may no longer be worth the squeeze; you have better things to do with your money, time and sanity.  🔔 Hit that follow bell to always get my unique, impactful content #cannabisindustry #MSOS #LPS #publicmarkets #cannabis #buybacks  

Why Cannabis Firms Must Upskill to Flourish Business opportunities are plentiful but capturing them is not easy.  Strategic, financial and execution mistakes are costly and culturally toxic. Risk is magnified when your team lacks key competencies such as… --> The right financial skills & tools --> Powerful consumer & market research frameworks & techniques --> Effective planning and project management methodologies & templates Customized and experiential management training is the fastest way to improve productivity, employee engagement and decision making.   Lets chat about your organization needs and how I can deliver you the right training and coaching solutions. #cannabisindustry #training #upskilling #cannabis #MSOS #LPS #talentmanagement

AI is Coming for Cannabis Few emerging technologies generate as much discussion (and confusion) as Artificial Intelligence. AI will revolutionize business and create (and destroy) vast amounts of shareholder value. Like all disruptions, however, there is a gap between the promise and the reality on the corporate ground.  Today, a few operators are using AI to make product decisions, as outlined in a fine MJBizDaily article by Omar Sacirbey (link in comments).  I’ve also seen AI help cultivators optimize their mix of inputs and manage their grow environments. AI has the potential to address a myriad of cannabis business challenges.  It helps to consider what other industries are doing with AI, and with what results. A recent McKinsey survey sheds some light on these questions. A proviso:  McKinsey targets governments and Fortune 500 firms - not the cannabis space.  Consider their findings directional.  > Organizational penetration As of Q1 2024, 72% of respondents reported deploying AI in at least one function. This is up from 55% a mere 10 months earlier. Of the adopters, 50% of organizations use AI in two functions, while 27% have deployed it in 3 functions.  > Top 3 AI Department Adopters and Use Cases: 1. Sales & marketing (34% of adopters) - Content support (ChatGPT etc.), personalized marketing, sales lead identification & prioritization 2. Product and service development (23% of AI adopters) - Design development, research review, early simulation & testing 3. IT (17% of AI adopters) -Help desk (chat bots, administrative assistant), data management > Spend by Sector The survey reported AI adoption across ALL sectors.  On average, AI initiatives now make up 5% of total IT spend, and growing. In these cannabis-relevant industries, the percentage of companies that hit a minimum 5% AI spend threshold: Consumer goods and retail:  64%  Business and professional services:  63%  Pharma and healthcare:  61% AI Value When properly deployed, AI adoption can reduce costs and drive revenues.  The biggest cost declines (>5%) have been in HR and customer service. The largest revenue increases (> 5%) were found in inventory management, sales & marketing and supply chain optimization. Some advice I’ve had a front row seat to the rise of new technologies. Firms should not dive into uncharted waters without understanding how transformational AI tools can enable their corporate strategy, solve burning problems, and comfortably fit with their organizational structure & culture. Undertake a suitable operational, finance and IT assessment as well as consider applicable cases studies. Prudent CIOs will start with a pilot project led by an experienced vendor.  Your objective is about gathering learnings and proving out the business case. Lets chat about how I can help you leverage AI 🔔 Hit that follow bell to always get my unique, impactful content #cannabisindustry #AI #cannabis #IT #generativeAI #cultivation

Building a true brand-driven MSO   Most cannabis executives and sector analysts concur: Winning MSOs will be brand-driven. Great, but what does that mean in practice and how do you get there?   A strong brand is more than a logo or THC level. It is a promise of value reliably delivered to consumers – and, if done right, a provider of strong margins and sustainable advantage for producers.   I've worked with some of the biggest consumer & B2B brands in the world (e.g., P&G, Merck, AmEx) plus many ambitious Canadian and US weed brands.   Here's what I learned in cannabis. It doesn’t matter how many CPG people you hire, the amount of executive ‘happy talk’ or how much money you throw around.   Great brands will emerge from the creation of a brand development engine that forms the core of how a firm competes. This engine is built on a foundation of strategic clarity, an unwavering focus on channel & consumer needs and the assembling of enabling capabilities such as market research & analytics, innovation, and product line management.   One MSO that is dialed into this advanced thinking is Ayr Wellness.   Ayr’s go-to-market strategy is based on the notion of a ‘flywheel’. This is an understanding that the company is simultaneously seeking to be a retailer of choice and a house of sought-after CPG-like brands. Their operational ‘secret sauce’ includes quickly capturing and leveraging market & consumer learnings, ensuring quality throughout the supply chain and designing the ideal consumer brand portfolio and experience.   This approach seems obvious, but it is not. Many MSOs plan/execute their retail and brand strategies in silos, thereby increasing complexity, hindering learning and challenging cost minimization efforts.   For Ayr’s differing brand and retail strategies to work, they need to support one another and leverage available synergies. For example, Ayr’s CPG brands need strong equity and a unique identity, and not be seen as ‘me too’ house brands. Ayr has rationalized its brand portfolio from 12 single-form factor brands to 2 core brands that cross form factors to ensure that each provides a differentiated value proposition and carries a strong physical and digital presence. When done successfully, brands can become a driver for retail, much like carrying Coca Cola is de rigueur for any grocery chain.   On the other side of the flywheel, Ayr’s strong retail platform gives them the ability to launch/build brand equity through readily available shelf space, a supportive retail service team and direct access to market data. The retail brand is being built to convey clear positioning and resonating pillars and focused on generating customer loyalty.    When fully developed, Ayr’s flywheel could powerfully drive corporate performance, including delivering market-leading brands, service levels and margins. 🔔Hit that follow bell to always get my unique, impactful content #cannabisindustry #MSOS #branding #cannabis #marketing #AyrWellness