Mainstream executives want in on the cannabis craze.
That’s not surprising, with the value of some Canadian pot businesses topping $10 billion and Coca-Cola Co. and Molson Coors Brewing Co. eyeing marijuana as the next trendy ingredient. But the burgeoning industry faces a unique hurdle: Pot is still illegal at the national level in the U.S. — the world’s biggest consumer market.
As Canada prepares to legalize weed this week, and regulations loosen in some U.S. states, there’s growing demand for experienced executives to take leadership roles and help startup companies create the next generation of pot products. Yet, the federal ban in the U.S. has created a legal minefield for headhunters trying to find enough bodies to meet demand.
“Getting started in cannabis is probably a lot like when Prohibition ended in the 1930s,” said Catherine Van Alstine, who recruits executives for the industry as a partner in Vancouver for search company Boyden. “Everybody thought the world was going to end because alcohol was going to become available and legitimate. That’s the way to think about cannabis.”
The latest flashpoint for recruiters: threats from U.S. Customs officials of potential lifetime bans for Canadians employed in the pot business trying to enter the U.S. That’s forced some executives in Canada to reconsider taking board seats or executive roles at marijuana companies. And search firms are fielding questions from U.S. business leaders as well, who are concerned about the implications of being tied to corporate cannabis.
Financial opportunity
The tension is complicating hiring for Gabriella’s Kitchen, a packaged-food company that’s adding a line with cannabis-infused products for sale in California, Chief Executive Officer Margot Micallef said. The Calgary-based company retained three search firms, including Boyden, to help it fill posts such as chief operating officer and vice president of development and will soon seek a chief financial officer, she said. Most of its sales are in the U.S., and the company has a manufacturing facility in Santa Rosa, Calif., she said.
“The roles that we are hiring for are all U.S. positions,” Micallef said, partly because of the border risk and lack of support from Canada’s government. “The result of that might be that Canadians don’t get offered positions that they might otherwise have been qualified for.”
Even without Canadians, Micallef said there’s been no shortage of people reaching out to show interest in the positions, particularly from the packaged goods and alcohol industries.
Harris Damashek had no reservations about changing careers. Still, he was aware of the stigma and waited two months to tell his mother he’d left Anheuser-Busch InBev SA to become chief marketing officer at Acreage Holdings, a New York-based cannabis company that counts John Boehner as an adviser.
At the beer giant, Damashek worked in the unit responsible for tracking consumer trends and investing in small, fast-growing businesses. He broached the idea of the company getting into cannabis, but left after the proposal was rejected, he said. The boom in the Canadian stock market and interest from big consumer companies are helping legitimize the field, he said.
“That stigma is being replaced by titillation that this is a big financial opportunity,” Damashek said.
Legal U.S. employment in the industry is expected to double by 2022 from about 160,000 this year, according to the publication Marijuana Business Daily. Thousands of jobs are also expected to be added in Canada in coming years.
Ahead of Canadian legalization, the value of the industry there has surged to about $60 billion in the stock market, with shares spiking on any mention of cannabis. Canada’s government has estimated annual legal pot sales of roughly $3.1 billion annually.
