The legal marijuana industry continues to expand, with some estimates projecting a worldwide market worth over $146 billion by the year 2025. If yours is one of the many companies to enter the booming cannabis trade in recent years, chances are good that you are experiencing a bit more than the typical startup growing pains. For many recent entries to the “cannabusiness” world, a question that inevitably arises is, is it time to hire a COO for my cannabis company?
The Role of a COO in a Cannabis Business
According to Investopedia, a COO “is tasked with the day-to-day administration and operation of the business. Typically, the COO reports directly to the Chief Executive Officer (CEO) and is considered second in command.” That is a fairly broad definition, but for a recently-formed marijuana company considering making this leap, those last three words matter most: “second in command.”
There are several reasons to hire a COO for any business, but as the CEO of a cannabis company, your first concern is the need for that person to take some of the weight from your shoulders and to strengthen your weaknesses. Your COO should supplement and complement your leadership strengths. The person you hire should have a similar business philosophy to yours but ideally will possess strengths that you do not.
5 Questions a Cannabis Company CEO Should Ask Before Hiring a COO
1. Can you let go?
A big question for any CEO considering hiring someone to take over operations is somewhat philosophical: Are you ready and willing to let go of some of the things you are doing? At some point, it will be unavoidable. Still, it is important to assess your own comfort level prior to making a big hire such as this.
2. How well are you managing your current workload?
As a CEO, you might be very accustomed to burning the candle at both ends. The buck stops with you, and you take pride in your work ethic. As a “Type A” personality, you convince yourself that you are working at your peak. Yet, this question is not about how well you are functioning personally; rather, it is more a question of how well you are handling each aspect of your business.
You had the foresight to enter the growing cannabis industry. Perhaps you have a good working knowledge of the industry. You may also be a subject matter expert in one of its key areas: Manufacturing, extraction, quality control, distribution, or retail. Despite these facts, you are one person. You cannot be everywhere at once, and you cannot be the top expert on every aspect of your business.
If you are finding yourself putting off certain tasks, or recognize that there are things in your business that you hate to do, or you know that you are just not very good at some aspect of your marijuana business’s day-to-day operations, a COO could be just what your company needs.
3. Is your company’s fast growth creating inefficiencies in your business?
We know that the market for legal “weed” is huge, and you got in early. That puts you ahead of many hoping to join the bandwagon and get a piece of this multi-billion-dollar industry. To take advantage of the current and anticipated growth of this industry, you need to be prepared for its expansion.
In rapidly growing industries it is easy to become overwhelmed. If there is no shortage of work to be done but your forecasts come in less than expected, consider the possibility that you are not running your business as efficiently as you could. A COO might provide the “extra set of eyes” that you need to spot those inefficiencies.
4. Are you starting to feel like a babysitter?
This is not a knock against your staff. You may have a great team working for you, and you might have the utmost appreciation for their part in your cannabis company’s success. Regardless, if you are spending most of your time managing people, you are limiting the time you are able to dedicate to the long-term planning that is crucial to your business’s future.
A COO who understands the weed business and who appreciates your management style can relieve some of that pressure of working with the team, freeing you to focus on your vision for the company’s growth.
5. Does your staff all think like you?
Many executives have a hard time recognizing this as a problem. Especially for small businesses, it is easy for teams to form with personalities and thought processes closely matched to the team’s leader. In the beginning, this can be a good thing—it makes it easy for everyone to get along and to work well together.
As the business matures, the similarities can lead to stagnation. Diverse opinions, ideas, and methods of reasoning are good for a business’s long-term growth. While you as the company’s leader may have the final word, different perspectives can help find unique ways to solve problems. Hiring a COO adds another personality to your executive team, potentially diversifying your staff overall.
So how does a growing cannabis company go about finding the right people to fill their key leadership talents? They work with an executive recruiter that specializes in the cannabis industry. These experts understands the mindset of top executives and they know how to source and recruit them. A search consultant that specializes in cannabis is experienced at matching the executives’ skills with the organizations that need them.
The decision to expand a cannabis company’s team can be a challenging one, and hiring a COO for your weed business is a big step. If it is a step you are considering, Kaplan’s executive search experts are here to help.