An elite class of leaders is emerging to generate billions for the economy, and yesterday’s stereotypes no longer apply
By Anne-Frances Hutchinson
Willie Nelson. Cheech Marin. Tommy Chong. Seth Rogen. Jay-Z. Carlos Santana. These artists typify the image of the stoner-cum-business-whiz that permeates media coverage of the cannabis industry. Has their devotion to the herb inspired them to use their celebrity to help usher an underground business into the mainstream? Absolutely. Their trailblazing influence will continue to hold center stage as legalization spreads throughout the country.
In 2016, Snoop Dogg and Martha Stewart brokered their longtime friendship into the critically acclaimed Martha and Snoop’s PotLuck Dinner Party, which solicited an equal measure of confusion and delight at the notion of the domestic doyenne collaborating on a lifestyle show with a former member of the Rollin’ 20 Crips. That partnership didn’t just nod to the ongoing integration of cannabis culture into American society, it demonstrated the power of business to change minds.
Linking perceived (and in some cases actual) potheads to pot businesses is a no-brainer, especially if those weed advocates are also multimillionaires. At $150 million, Snoop’s current estimated net worth puts him amid the highest-earning rappers in history. Never a slouch, Martha’s net worth in 2020 eclipsed $400 million. In addition to their talent, the duo’s expertise in marketing, brand positioning, and financial management is integral to their star power.
Uniting seemingly polar opposites for the purpose of satisfying shareholders is nothing new. Brands have been parlaying social movements into profit centers for a very long time, making the alignment with popular causes both an art and an expectation. However, transitioning prohibited commerce into a legitimate industry with stunning earning potential adds an intriguing dimension to these imperatives.
Lawyers, guns, and money
The CEOs of today’s most high-powered cannabis companies are largely indistinguishable from leaders in other industries. There’s no need to align support of using cannabis with the vision of capitalizing on projected earnings. What matters is their ability to shepherd startups to success as foundational elements in a global industry expected to reach $90.4 billion by 2026. Last year, the domestic market hit roughly $18 billion, and is expected to exceed $24 billion this year.
Take Darren Lampert, CEO and co-founder of GrowGeneration Corp., a designer and retailer of specialty hydroponic systems and cultivating supplies for cannabis growers. Lampert, a Colorado attorney with a JD and a 22-year tenure as partner at the law firm of Lampert & Lampert, co-founded the company in 2014, and grew it into one of the industry’s best stock buys of 2020. GrowGen, which is also the largest hydroponics company in the nation, was approved for listing on the NASDAQ in 2019. GrowGen became the best-performing cannabis stock in 2020, gaining 881%, according to Motley Fool. Shares are still rising, showing a nearly 30% gain in the first two months of 2021. According to Wallmine, Lampert’s current estimated net worth is at least $56.8 million.
Another legal eagle, Charlie Bachtell, founded and helms Cresco Labs, LLC (NASDAQ: CRLWF),
one of the industry’s star performers. The Chicago-based medical cannabis company operates retail stores in nine states that have legalized medical cannabis. Prior to launching Cresco, Bachtell, a specialist in regulatory affairs and compliance, served as the Executive Vice President and General Counsel of one of the country’s largest mortgage lenders, Guaranteed Rate. That focus on compliance was central in the formation of the company, whose portfolio of national cannabis brands is available in their retail shops as well as wholesale. Their 2020 revenue increased over the prior year by 271%, for an annual revenue of $476.3 million.
Lawyers aren’t hogging the spotlight, though. Jay Czarkowski, co-founder of cannabis industry consultants CannaAdvisors, started out as an electrical engineer, general contractor, and real estate developer. Diane Czarkowski, Jay’s partner in business and life and the co-founder of the Boulder-based operation, has a background in real estate and high tech. As advisors to cannabis entrepreneurs, CannaAdvisors helps startups navigate the labyrinthine structure of building their businesses. Before joining the group, their VP of business development, Bob Wagener, grew Serta’s revenues from $240 million to over $1 billion.
Some founders are ditching Wall Street for a much greener street. It was a risky move for Beth Stavola, but as the saying goes, well-behaved women rarely make history. Formerly an SVP at global investment banking stalwart Jeffries, in 2019 Stavola snagged the top spot as the leading female entrepreneur in cannabis, ranked by Cannabis Business Executive.
Two years earlier, the mother of six closed an $835 million deal in a reverse takeover deal that landed the enterprise she founded, MPX Bioceutical, on the Canadian Stock Exchange. A $1.6 billion merger with iAnthus quickly followed. Stavola landed in the industry when a broker in Arizona presented her with an opportunity to buy a license for a medical cannabis operation on the Mexican border close to a favorite smuggling spot for cartels. After a career dancing with the wolves of America’s most famous financial neighborhood, setting up shop near El Chapo’s domain didn’t faze her in the least.
Many cannabis company investors are firebrands in other industries, such as Starbucks chairman, president and CEO Howard Schultz, who in addition to investing in real estate, healthcare, oat milk, and SaaS for meal planning, is an investor in Dutchie, a startup described by Crunchbase as “a technology platform that provides consumers with safe and easy access to cannabis.” In March, the e-commerce platform creators raised $200 million in funding at a $1.7 billion valuation.
Cannabis company boards have no shortage of hardcore traditional industry leadership, either. Thomas Millner, director and chair of the finance committee at medical cannabis leader Trulieve (OTC:TCNNF), which, according to the company, owns 51% of Florida’s medical cannabis market, is the former CEO of outdoor retailer Cabela’s. For 15 years, Millner served as president and CEO of the Remington Arms Company, and has chaired Best Buy’s audit committee since 2014.
That said, the firm’s biggest power player is CEO Kim Rivers, currently the only female CEO of a multi-state operator in the nation. (Trulieve operates 84 retail stores in six states, 79 of them in the Sunshine State.) Before taking the reins in 2015, Rivers put her JD to work in her private law practice where she specialized in securities and M&A for a slate of multi-million dollar companies. Her acquisitional mindset is coming in handy; most recently the company snatched up promising MMJ operations in Philadelphia and Pittsburgh. Trulieve’s 2020 revenues topped off at $521.5 million, growing 106% from the prior year.
If and when federal legalization becomes a reality, get your popcorn ready for the showdown between Big Alcohol and Big Weed. That may seem preposterous today, but when the CEO and CFO of the country’s biggest seller of cannabis are veterans of beverage behemoth Constellation Brands, that’s a strong indicator of what’s to come.
Canopy Growth (NASDAQ:CGC) is home to some of the most in-demand cannabis brands, including Martha Stewart CBD and sports CBD innovator Biosteel. Canopy CEO David Klein is the former CFO of Constellation and a major shareholder; before becoming Canopy’s CFO, Mike Lee was CFO of Constellation’s wine and spirits division. In April, Canopy inked a domestic distribution deal with the world leader in beverage alcohol distribution, Southern Glazer’s Wine and Spirits, to move their CBD infused beverage line. Canopy Growth expects to generate $450 million this year.
The hoary impression of the cannabis industry as a playground for stoner celebs looking to make a quick buck or boost a flagging reputation no longer has meaning in this extremely complex, capital-intensive, and rapidly growing realm. Like Reefer Madness, the sanctimonious 1936 cautionary tale meant to scare innocents away from the evil weed that’s now regarded as rollicking satire, those hollow judgments are things of the past.