After starting his career during the peak of the dot-comedy boom and bust, Sparky Rose became a first-mover in commercial cannabis running one of the largest medical marijuana operations in the United States in Northern California.
While those efforts were state-sanctioned, the federal government in 2008 had a different point of view, leading to his incarceration. Three years later, Rose moved to Chicago, started several cannabis ventures, ran marketing efforts for Pharmacann, and now is a principal at agencies 4042 North and SuperCritical. On July 26 and 27, SuperCritical is hosting the virtual SparkList Summit, of which Grown In is a media partner.
Grown In: You were a creative lead at a top San Francisco-based digital agency (Viant) in the late nineties during the dot-com boom. How do you compare today’s commercial cannabis industry to the early days of digital?
Sparky Rose: I’d say that there are very stunning parallels to, say, the dot-com boom. I think we’ve passed our phase of “unbridled enthusiasm” and, much like Web 2.0, I believe Cannabis 2.0 is going to bring with it a tsunami of innovation and a renewed commitment to focus, profitability, and solid business fundamentals. It’s unclear to me whether or not the vape crisis plus the spate of missed earnings from the publicly traded companies would classify as the official “bursting of the bubble” as there really hasn’t been a significant and total flameout, just yet.
This situation feels more like a gradual deflation. With Covid-19 and the classification of cannabis as an essential service, we finally proved that cannabis is, in fact, both recession and pandemic-proof with overall cannabis sales on an upswing since the coronavirus reached the U.S. Higher sales have led to some better earnings reports from the public companies and, with it, some additional investor confidence in the sector. Increased bandwidth, mobile penetration, and cloud computing ushered in a wave of tech investment after the dot-com bust.
I believe that increased M&A activity, as evidenced by over $2.8 billion raised for cannabis SPACs (Special Purpose Acquisition Companies), which must allocate those funds inside of 12-24 months, and the all-but-risk-free investment environment surrounding the new Illinois adult-use market coming on-line, will trigger another wave of new investment into cannabis going forward. Gone, however, are the days of raising money with a pitch on a cocktail napkin. I believe the “pets.com” analogs in our industry are long gone, and investors have lost the FOMO, and they’re taking a far more prudent approach to cannabis investing these days. Has the cannabis investment market shrunk? You bet it has, and significantly, but there’s still plenty of good and, more importantly, smart money out there for the right entrepreneur.
Grown In: In 2008 you were incarcerated by the federal government for operating one of the largest licensed, in the state of California, medical marijuana businesses in the country. How did that experience inform your subsequent work in the industry over the last decade?
Sparky Rose: Two words. Social equity. I look white, and I grew up white, although my mother and brother were born in South America. I’ve never had to deal with systemic racism as I grew up in a mostly white, suburban, middle-class household near Annapolis, Maryland. My mother explicitly did not teach me Spanish for the fear that I may experience racial discrimination. Being arrested by the feds is a harrowing experience, to say the very least, but incarceration teaches you a lot. As a matter of fact, I think every American should have to spend some time in jail as a matter of course. You simply cannot understand and appreciate what you have until what you have is taken away from you. But I digress.
Because my sentence was only 37 months in prison, I was deemed a “short-timer” by the general population. While federal prison conditions are far better than state-level prisons, the fed is known for dealing out lots of time. It’s pretty rare to come out of a federal conviction with less than a 5-year sentence. That being said, short-timers typically go to minimum-security federal prison for the balance of their stay. Most people think of minimum-security federal prison as “Club Fed,” where the inmates eat steak and lobster, everyone is white, and everyone is a white-collar criminal. Wrong.
At all levels, federal prison is about 80% black and brown people serving out sentences for drug-related crimes. Going back to my privileged youth, when I got out, I had it pretty easy. I called some old friends and hustled up some design work. My dad fronted me a couple grand for a phone and a laptop, and I started to build my career again.
My friends that I made in prison, however, had a different path. Virtually every one of them had to go out and get a job, go out and check that little box that reads, “Have you ever been convicted of a felony offense?” You’ve paid your debt to society and, violent and/or sex offenders notwithstanding, you should not have to disclose that information to your employer.
And while I have no interest or intention of owning a gun and remain a gun control advocate, why, as a non-violent drug offender, should I lose my right to own a firearm? Why should I lose my right to protect my family? These are the wrongs I aim to right in my current go-around the cannabis industry.
Grown In: What advice do you have for creative professionals looking to enter the industry?
Sparky Rose: I have advice for all professionals looking at the industry, and I’ll follow that with a little for creatives, specifically. The first thing I’ll say is that chances are, you’re needed in the industry no matter what you do. Janitor? We need them. Human Resources? We need them. IT Admin? You guessed it. Cannabis companies require all the same support systems as other “traditional” businesses and, in many cases, even more. And if you can’t find your career path in a “leaf touching” cannabis company, I assure you that there’s an ancillary company that needs you.
There are cannabis-focused insurance companies, banks, brand marketing companies. Shameless plug to 4042North! Software companies, data science companies, and the list goes on. This industry needs your skills. As for creatives, specifically, I’ll tell you that this industry can be a tough slog if you’re not going after a job with a cannabis or cannabis-related company directly.
I mentioned 4042North before, the first year and a half of that business was very challenging. We figured out that the industry, as a whole, fully embraces the notion that cannabis is largely a consumer packaged goods industry. And that a robust and well-developed brand is paramount to long-term sustainable success, very few have made the necessary investment. One of the primary reasons for this is that, essentially, all cannabis companies are still startups. They typically have limited capital available, and they’re often trying to establish and gain as much market share straight out of the gate.
When posed with the decision between investing $100,000 into their branding or investing that same money into another extraction rig, for example, it’s much easier to map out the return on investment for that extraction rig, whereas branding’s ROI is often ephemeral.
In my experience, this is typically followed by the company having its brand work done by the CEO’s nephew or niece who is in the design program at university and spending that money on the extraction rig. So, my advice to creatives is to understand where the industry is, on the whole, when it comes to brand marketing maturity. Then, cater your services with a long view at building long-term relationships with customers so that when they can afford to, “do it right,” that you’re the hands-down choice.
Grown In: How do you incorporate cannabis into your own creative process?
Sparky Rose: When I grew up back in the ’70s, ADHD wasn’t a thing. You were just “hyper,” and people just dealt with it. I’ve never tried to have myself diagnosed, but if I had to guess, I’d say that I have some amount of ADHD just based on how I process information and “organize” my life. It looks like absolute chaos, but there is an order to it that, apparently, only I understand.
I was your typical over/underachiever in school. I went to a science and technology magnet high school, scored an 1120 taking the SAT’s in 9th grade, and I think I graduated with a 2.0 GPA. They told me I was smart, but I was always bored, I couldn’t focus, and I just wanted to play music. I was a teetotaler in high school and didn’t try alcohol or cannabis until after I graduated when I was 17.
Cannabis made music, the love of my life, at the time, sound better, connect better, and allowed me to tamp down distractions that otherwise might throw me off my path. It was love at first puff. I’ve been an avid cannabis consumer ever since. I typically start the day with anywhere between a 10mg and 20mg cannabis edible in the morning, and I’ll periodically hit a vape or dab pen throughout the day.
I have an ongoing “maintenance dose” I keep up during the day, and then I’ll kick it up a notch if I run into some manner of creative block or should I start coming up against a deadline. It helps me with focus, clarity, and it reduces my stress and anxiety around the task at hand. At higher doses, it expands where I’ll allow my thoughts to lead. Coupling a strong dose with a brief round of meditation takes my creative ideas to places I don’t think I would have imagined without cannabis. Honestly, I don’t know how I would function without it.
Grown In: On July 26th and 27th, your agency Supercritical will be hosting a SparkList Summit. Who should attend and why?
Sparky Rose: That is correct, and thank you for bringing it up, Brad. Before I get into who and why, I believe I’m contractually obligated to thank our premier sponsors for the event: CannaTrac, a payment processing/merchant service for cannabis businesses, and Blaze Staffing and Recruiting, a cannabis-focused staffing company, for their support for our very first SparkList Summit.
The summit is a curated virtual cannabis resource fair happening on July 26th and 27th, which includes over six hours of educational content, one-on-one networking opportunities, and a virtual expo floor for our supporting partners. This summit began because Supercritical offers, as a value-added service to its clients, access to our ecosystem of trusted providers. We call this ecosystem the SparkList because it began, by and large, with my Rolodex.
Every exhibitor at our event has been invited, by Supercritical, to be there. We’ve worked with all of these firms over the years, and we’re putting our stamp of approval on the quality of service they provide to the industry. These are proven players.
The summit caters to individuals who have applied for a cannabis license in Illinois, intend to apply for a license in Illinois, or are interested in getting involved in the cannabis business in Illinois. The cannabis curious can learn a lot at the event as well. It’s designed to provide educational content and resources around the challenges soon to be faced by licensees and prospective licensees in the state of Illinois. You should come to educate yourself and to network with others. There’s countless opportunities for everyone in this vibrant, diverse, and growing industry.