We don’t yet know how cannabis will impact Chicago’s corporate landscape. Maybe one day all this will be cannabis. (Nancy Bourque/Pexels)

As one of the more than 250,000 U.S. professionals to transition to the cannabis industry in 2019, I’m now finding myself dispensing advice to friends and contacts interested in working in the sector.

This is what I’m learning so far. 

There are no industry natives

Virtually everyone working and/or investing in cannabis today brings experience, bias, capabilities and networks from whatever industry they left into their new professional journey. All others are just starting their careers in a field that came into existence (and to some extent was illegal) while they were still in school. 

Grown In advisor David Friedman, a serial entrepreneur who started cannabis companies in 2014 and now has more than 20 investments in the industry, explained to me recently that there are no natives in this industry. 

“Almost all of us have come from some other mainstream industry and immigrated into this space,” he said. 

This is similar to the early days of digital in Illinois and nationwide. The pioneers from Champaign and Silicon Valley who developed companies like Netscape in the Nineties – the graphic web browser that ushered in the commercial Internet – were followed by investors, entrepreneurs, opportunistic professionals, and others excited about the promise of a new industry. 

In that era, sometimes called “Web 1.0”, there were no digital natives. While serious-minded people and organizations raised money to fund new businesses that promised to change the world, nobody had a full sense of what they were doing or how the new industry would evolve over time. 

A generation later, at least two of that industry’s pioneers are also among the most important players in the Illinois commercial cannabis industry. Governor J.B. Pritzker, who championed the new law, invested in dozens of Internet companies during Web 1.0 via his New World Ventures fund. Another early leader, Wendy Berger, who co-founded early web development firm Neoglyphics (sold for $63 million in 1998) and was employee number 11 at Orbitz, is today among the most accomplished and connected individuals in commercial cannabis in Illinois today.  

Illinois has the commercial infrastructure to be an industry leader 

Six Illinois-conceived cannabis companies – Green Thumb Industries (GTI), Cresco LabsRevolution GlobalPharmaCannGrassroots Cannabis and Verano Holdings – are leaders in this fast-growing, multi-billion dollar sector. 

GTI and Cresco are both publicly traded on the Canadian Stock Exchange, and like most public cannabis companies took a valuation beating in 2019. Grassroots and Verano were or are poised to be acquired for 9-figure valuations. PharmaCann dodged a bullet last year when its $675 million sale to Los Angeles-based MedMen (now reeling) fell through. Revolution Global, while attracting fewer headlines on the finance page, is the largest grower of medical cannabis in Illinois. 

All of these companies are vertically-integrated in that they operate cultivation, processing, and retailing facilities in multiple states. While the Federal Trade Commission historically cracks down on companies that become too powerful while engaging in such practices (see U.S. vs. Paramount Pictures Inc. for an example), the United States government must first recognize the legality of growing, producing and selling cannabis for medical and recreational use before it can regulate these business practices.  

While legal ambiguity and market volatility persist, all of these companies are hiring at a breakneck pace. A healthy portion of executives, investors and professionals living through massive growth in a still forming industry will start new companies, brands and organizations to serve the next wave of industry aspirants. 

While some observers believe California, due to its climate and commercial head start, will emerge as the epicenter of the industry when and if becomes federally legal, locals point out that weed grows like a weed and can be efficiently produced and packaged from anywhere. Illinois, with its existing consumer packaged goods, branding and financial services infrastructure, can be an industry leader in ways that it may never be in technology and other 21st Century industries.  

Big Food execs eye big opportunities 

Deerfield-based snack conglomerate Mondelez International is trying to figure out how to infuse CBD in Oreos and Triscuits (which may or may not encourage the consumption of more Oreos and Triscuits), while C-level executives from its parent company Kraft are asking industry newbies like me for consumption analytics to gauge potential market size for its consumer goods. 

Constellation Brands, which operates its Corona and Modelo beer imports out of Chicago, pumped $4 billion into Canada-based Canopy Growth. Lagunitas, which operates a major production facility in Pilsen, recently debuted Hi-Hops, “an IPA-inspired sparkling beverage” that lacks alcohol but contains THC. 

Overall investments in this space are constrained, for now, due to things like the illegality of transporting cannabis (or at least THC)-infused food across state lines. 

Employment policies are changing 

Off-hours recreational cannabis consumption is no longer illegal. Companies who don’t want to limit hiring options in these times of historically low unemployment are liberalizing employment policies to recognize new state laws and social norms. 

As outplacement and executive coaching expert John Challenger explained to Grown Inshortly after cannabis became legal in Illinois:

“Cannabis still carries a higher stigma than alcohol, but as more jurisdictions permit recreational use and as time passes with this new legislation, we’ll likely see even conservative businesses relax their policies to some degree.”

More social equity investments are coming 

Illinois was the first state to legalize recreational cannabis through its legislature. One of the results of this process, which will likely be followed by New York and other states, is that incumbent medical cannabis growers and retailers need to invest in social equity programs to most easily expand their operations into what appears to be recreational sales opportunities. 

By Illinois Statute, companies (which include independently-owned dispensaries) that were formed to sell medical marijuana have the right to open additional recreational sales operations in exchange for $100,000 in social equity contributions and donations for each new location opened. 

This includes incubators run by Cresco and GTI that train social equity applicants to apply for dispensary, infusion, cultivation and transporter licenses. These individuals typically come from communities most negatively impacted by the war on drugs. Revolution recently contributed to the OURS program in association with Growing Greater Englewood.

Jeremy Unruh, PharmaCann’s director of regulatory and public affairs, believes blue states like New York (who many expect to approve recreational sales in 2020) will adopt and perhaps expand upon social equity requirements pioneered in Illinois. 

As Unruh shared with Grown In earlier this month, “the same political winds that drove this industry five years ago are not the same political winds driving it today.”

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Brad Spirrison is a journalist, serial entrepreneur and media ecologist. He lives in Chicago with his son. Interests include music, meditation and Miles Davis.