For Victims Of The Green Rush, What Lies Ahead?
I survived the dot-com bust, here's why what's happening in cannabis is similar but different.
After picking up my morning coffee and bagel, I make my way into the office like I would any other day. But when I get there I sense a very noticeable buzz. I ask my closest neighbor what's going on. “People have been receiving some really cryptic meeting requests this morning from their supervisors," he says. "None of them have any real details.”
I knew what was happening. Layoffs had arrived. By the end of the day, approximately half of my coworkers — my friends — had been escorted out of the building by security.
If you think I’m talking about a recent round of layoffs in the cannabis industry, you wouldn't be alone. But this is the story of what I observed in the fall of 2000 at my first programming job in New York City. The dot-com bubble had burst, and I was watching it all play out in front of me. The months that followed were packed with a seemingly endless stream of carbon copy stories. At some point, it seemed like the crash would never end. It felt as though we were watching an entire industry, a brand-new burgeoning one at that, be decimated to the point where you had to start wondering how it would ever recover.
Is this also the future of cannabis?
The Pot-Com bust
I’ve been having many conversations lately about the current state of crisis in the cannabis industry. Fortunately, I can pull from my previous experience to try to provide some insights about why this is happening and what we can expect to happen next. What we saw happen back then, in retrospect, was a perfect storm of greed (investors and entrepreneurs), non-existent capital stewardship, and a fundamental lack of understanding of how this nascent industry functioned.
It sounds familiar, but it's also different. In talking to one CEO of a top Point-of-Sale company in the cannabis industry who had also lived through the dot-com nightmare, he identified the same issues I pointed out above, but his contention is that the lack of capital stewardship this time around wasn’t as bad as it had been back then. There was a new issue, a lack of technical stewardship. I hadn’t heard this term before it came out of his mouth, but I immediately understood what he meant. We discussed that many organizations were doing things because they could and not enough of them were evaluating whether or not they should. As we see the surviving companies trim non-core operations from their balance sheet, we realized that we are not the only ones who identified this. If nothing else, this gives me hope that we have started to get back on the right track as an industry.
So what will cannabis look like in the next decade? The years that followed the dot-com boom taught me a few things. First, it doesn’t pay to do something only because you think there will be great financial gain over a short period of time. After all the layoffs in the cannabis industry, we saw huge amounts of attrition to the workforce. Those individuals who had only pursued a job in the tech industry to "get rich quick" left and moved on to the next opportunity.
For those who decided tech wasn’t for them, the layoffs really appear to have been a blessing in disguise. Once the gold rush carrot had been removed, it was easier for them to take a step back and evaluate what was truly important in their careers. I have friends who decided to work as financial advisors, chefs and some have even become doctors and nurses. Those of us who decided to remain in tech can be found sprinkled throughout the tech sector in senior leadership positions or bringing what we have learned in technology to new industries such as cannabis.
It's more fitting to call what is currently happening in the cannabis industry a “shakeout.” Those individuals in the industry who don’t have the commitment and the love for the plant and all the possibilities it contains, need to move on. What is truly interesting is what happens with those who remain. When you’ve gone through a shakeout of this sort, you end up with the best, brightest, and most committed individuals in the space. You also end up with a group of people that is very well aligned in its commitment and vision of what the future could be. Those conditions in 2001 and 2002 led to some of the most incredible periods of innovation I have ever seen, and I am ever likely to see again in my lifetime.
My hope is that we are going to see this mirrored in the cannabis industry moving forward. Those of us who care enough to weather the storm will be rewarded with more and better opportunities. This, coupled with the knowledge that we are all there for the right reasons, will create the perfect opportunity to make cannabis 2.0 bigger and better than any of us could have ever imagined!
Roger Obando is the author of the new book, The Highest Common Denominator - Elevating Your Base Self, now available on Amazon.