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Smoke or fire: Is the cannabis entrepreneur already dead?

With the imminent arrival of big food and pharma in the legal cannabis space, is the entrepreneurial approach already dead-on-arrival?

5 min read

SMOKE (no): John Fowler, principal of Blaise Ventures. Founder and former president of The Supreme Cannabis Company.

FIRE (yes): Brian Sterling, president of SCS Consulting

There is always room for more entrepreneurs.

Those big companies will come in, but they won’t come in greenfield. When has big pharma or big CPG ever done that before?

Big companies struggle with entrepreneurship so they end up buying brands. Coke wanted to get into healthy drinks so they bought Vitamin Water for hundreds of millions of dollars.

You have to be smarter as a cannabis entrepreneur now. Maybe it is a little harder than it was before, but quite frankly people used to succeed as a [cannabis] entrepreneur whether or not their business succeeded, which probably was not a good thing. You just have to have a real, solid plan and not just a ‘me too’ strategy of ‘I’m in cannabis so gimme ten million bucks’.

If you came up with a good idea, there was a time when that idea might be worth millions of dollars because you’re going to raise money at a high valuation. That same idea might only be worth fifty grand today in terms of sweat equity.

There is a sense that there is still an opportunity for entrepreneurs in cannabis, but they are rapidly diminishing. I think the opportunity only exists in the short-term now and only because the big [pharma and consumer packaged goods] players are scared shitless.

The bigger folks that I have spoken to and worked with specifically, they get to the point where they are ready to jump in the pool, then all of sudden they’ll say something like they need to take another look and see what it’ll cost. That is code for ‘we are scared shitless’.

[Corporate directors at these companies] are my age [baby boomers] for the most part and are naturally more conservative. A lot of them have never even tried cannabis before and don’t want to have anything to do with it. What that is doing is opening the door for a brief period of time, and I would say it is maybe the next five years at the most, for an entrepreneur to come in and really grab a bunch of the market. The end goal there of course would be to get bought, get taken out.

 

Extracts

  • This story presents opposing views on whether cannabis entrepreneurs will survive the arrival of deep-pocketed food, beverage and pharma players in the sector
  • It should help you draw your own conclusion on that critical question
  • Longtime food industry consultant Brian Sterling argues cannabis entrepreneurs only have a few years left, while Supreme Cannabis founder John Fowler claims no amount of well-funded competition can keep the entrepreneur down

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