The Cannabis Industry & Stakeholder Capitalism

Ever since I read Simon Sinek’s “The Infinite Game” in 2019, I have been working with a mindset that life is an infinite game. And that the games we play within that game, can be finite or infinite.

In finite games, there are known players and known rules and a time limit for the game. The goal of finite games is to win. The goal of infinite games is to keep on playing.

The game of cannabis has been played since the beginning of time. The plant is precious, but also controversial. The players in the cannabis game have to fight for the right of the plant to exist.

Recently, we have leveled up in the cannabis game; we’ve begun to legalize it. But many new players who join in the infinite game of cannabis have started to see the game as finite. Applying the antiquated practices of shareholder capitalism, the game has fallen victim to short-sighted thinking and upside-down wealth. And, that has led to a loss of our compass; the “Just Cause” of the cannabis plant.

Sinek coined the term “Just Cause.” More than a mission or vision statement, the just cause is the core reason, belief or future world view of all of those playing the game.

Once, we all had one mission; free the plant. But, now that we’ve leveled up in the game, the players new and old have lost sight of the mission, and replaced the infinite game with their own finite ones. In the new game, everyone has a different vision for the future of cannabis. And, traditional capitalism has blurred the original vision to use the plant to help humanity heal.

We can all agree that the game of life seems to get increasingly more divisive as well. We are abusing our natural resources, countries are at war, racial and cultural tensions are at an all time high.

So, how can we start to change? How can the cannabis industry be saved from becoming a victim of late-stage capitalism? How can the industry instead be a beacon for future new industries to model. How can 2024 be the beginning of unhooking from the quagmire of divisive finite-minded thinking that pulls us apart?

I'll use Sinek's tenets to provide my thinking around how we can use the idea that the cannabis industry will still be here long after we've left to consider our opportunity to change the rules in the infinite game.

1) Define our Just Cause.

Taking a stab at it: "We envision a world where cannabis is a widely accepted and highly respected part of a healthy lifestyle and many disease treatment plans."

2) Build Trusting Teams.

Given how diverse the industry is, and that we all have our own “teams” playing the game. We all need to understand that we are part of a bigger game. And, that the teams we build in our own organizations should be trusted to be the foremothers and forefathers of this infantile industry. So, let’s seek to work alongside people who share this Just Cause that is larger than our own companies. This will allow us to innovate and collaborate more freely without trust issues as we’ll know that at the core we are all playing the same game.

Also, within your organization, build a culture where people feel safe coming to work and cared for by their leaders. If you have that, your bottom line will soar. If you don't, you'll be putting out little fires everywhere within your business instead of working toward common goals. If you find yourself always complaining that your team isn't loyal enough, it's you not them.

3) Learn From Worthy Rivals

Finite games are all about competition. Infinite games are about getting better, playing longer. The best leaders hire people that they not only complement their weaknesses but who can be trusted to and encouraged to help the leader see things they are blind to or are too far ahead of their horizon. In the cannabis industry we see so much blustering and posturing at the top that I am not sure these transformative partnerships are happening here. I see a lack of understanding that we are all building the plane while flying it. And, a lack of learning from the mistakes made already made in states/businesses that came before.

Cutthroat competition, price-cutting and the race to the bottom is not working. So, instead of each person coming to cannabis thinking they "know better," let's adopt a more is more attitude and call in more experts to the space. Instead of seeing the people who are good at what you're good at your competition, start seeing them as your "Worthy Rivals," and learn from them.

Remember that in business, people do move from job to job in the same industry and one week you can be championing the company your work for and the next week you're getting laid off. So, grow your relationships with the understanding that your reputation is the most important part of business. And, treat one another like the teammates we might working with in the future that we are.

4) Display Existential Flexibility

Existential flexibility is that you're able to make a profound shift when you realize that something is not sustainable. For example, putting aside the fact that MedMen and its capital raise was woefully mismanaged, what if after that debacle, MedMen took a hard look at itself and made a seismic shift. A shift could have looked like differentiating its brand to appeal to a more diverse audience. Like some of its competition, MedMen might have chosen to rebrand some of its stores and product lines to appeal to more women.

Instead of changing its direction, MedMen's new leadership didn't seem to change anything. When those leaders came on board, the company was under duress. So, the leaders likely promised a big turn-around. But, if the company hired new leadership that thought bigger, more existentially, perhaps the outcomes of the company's current stock price and would be different.

What gets in the way of existential flexibility? Ego. Especially at the top. I look back and see now that my pivot to helping cannabis brands develop content marketing strategies and helping content creators in cannabis get meaningful work came much later than it should have. I really wanted to build a social platform for cannabis wellness consumers to learn about the plant from others who benefit from its use. But, it wasn't working. Monetization was too far out of reach to make it a viable business. I should have seen it earlier.

5) Lead with Courage.

Infinite-minded leaders have the courage to do what's right instead of what's easy. If your company's own "Just Cause" laddered up to a larger vision about advancing the plant for the good of humanity, it should be hard to look yourself in the mirror when you trade safety for cost. Or when you gouge your suppliers on price and then sell the product to the consumer.

Think about it, what is your company in service of?

Here's mine:

Just Cause -- I envision a future where cannabis is a well-respected, well-studied wellness supplement.

My business connects cannabis companies that have a wellness and responsible use message with their target consumers through strategic content creation partnerships. We're moving toward our just cause every day by tapping into influencer audiences to spread a wellness message. And, it's working. The more content spreads about cannabis for wellness, the more people will curious and the better our chances of rescheduling and descheduling becomes as public acceptance grows.

See how it's all connected? Not to toot my own horn, but every time a make a business decision I put it through many filters. Does it align with our Just Cause is one of them.

6) Ethical Fading.

When I read The Infinite Game, the chapter called Ethical Fading hit me hard. It was 2019 and Trump was still the President. Covid had not yet happened and I had just left my agency job less than a year prior; I was knee-deep in trying to find a solution for the capitalism that I had been very wrapped up in for years.

Ethical Fading is the idea that in an organization, if leadership's ethics stop being a priority, ethics will start to erode. For example, if a company has someone on staff that everyone knows makes women uncomfortable and leadership does nothing about it. It not only green lights that behavior n one individual, but it paves the way for a toxic culture and the hiring of team members that perpetuate, rather than call out that culture.

Having Trump as President definitely led to the Ethical Fading of this country. I mean if the President of the United States can do THAT, why shouldn't I do this?

But, we know better. We know that the right way to take care of our businesses is to take care of our people.

Which brings me to my last point before I get off my soapbox for the year.

The industry has been taking sides lately about capitalism vs anti-capitalism. And, while there are so many things about capitalism that I hate. I am not ready to give up on the purest sense of the philosophy. It is the weaponization of capitalism that has ruined the culture in companies where Shareholder value is the only measure.

And, the good news is, the solution has already been developed and championed by the most well-respected Economic leaders of today; the World Economic Forum. In fact, the concept of Stakeholder Capitalism was the topic of the 2020 Davos WEF Forum.

That year's press release, which was quickly forgotten as Covid-19 began to hit just as the forum closed, said, "The Davos Manifesto 2020 provides a vision for stakeholder capitalism that touches on a range of important issues of our time, including fair taxation, zero tolerance for corruption, executive pay and respect for human rights."

The press release went on to say, “Business has now to fully embrace stakeholder capitalism, which means not only maximizing profits, but use their capabilities and resources in cooperation with governments and civil society to address the key issues of this decade. They have to actively contribute to a more cohesive and sustainable world,” said Klaus Schwab, Founder and Executive Chairman of the World Economic Forum.

Even Larry Fink said in his 2022 Letter to CEOs:

"When my partners and I founded BlackRock as a startup 34 years ago, I had no experience running a company. Over the past three decades, I’ve had the opportunity to talk with countless CEOs and to learn what distinguishes truly great companies. Time and again, what they all share is that they have a clear sense of purpose; consistent values; and, crucially, they recognize the importance of engaging with and delivering for their key stakeholders. This is the foundation of stakeholder capitalism.

Stakeholder capitalism is not about politics. It is not a social or ideological agenda. It is not “woke.” It is capitalism, driven by mutually beneficial relationships between you and the employees, customers, suppliers, and communities your company relies on to prosper. This is the power of capitalism."

Can the cannabis industry and its leaders look ahead to the infinite game and shift to become the leader in the implementation of Stakeholder Capitalism?

I believe that by proliferating the Just Cause: "We envision a world where cannabis is a widely accepted and highly respected part of a healthy lifestyle and many disease treatment plans," we can rightset our organizations and the larger industry. And, we can take care of all of the stakeholders who play a part in the industry's success; the people our businesses serve, the employees our businesses support and the shareholders who believe in our futures.

I'd love to hear your thoughts on this. Happy 2024 everyone!