CPG Executives in the Cannabis Industry – The Evolution of Leadership

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A migration is taking place. Consumer goods company (CPG) executives move into the cannabis industry to fill executive positions for large multi-state operators (MSOs), startups, and every type of cannabis company in between.

With their transition into the legal marijuana industry, these executives bring extensive experience from industries such as food, beverage, retail, pharmaceutical and more. It’s a win-win for both growing cannabis companies and executives who have a proven record of success.

Why Cannabis Companies Are Hiring CPG Executives

The main reason cannabis companies hire CPG executives is to gain leadership skills as they prepare to scale. The cannabis industry is growing faster than ever, and many companies started by cannabis enthusiasts and entrepreneurs have grown to the point that they now require leadership skills that the founders simply don’t have. To reach the next level of success, these companies need leadership teams who know what to do and how to make it successful.

MSOs and other cannabis companies looking to acquire and / or go public need executives who have a proven track record of getting businesses on that scale – from $ 1 million to $ 5 million to $ 200 million US dollars and more. In other words, they need leaders who can guide and advise them through all stages of growth.

It makes sense for cannabis companies to turn to CPG for executive recruitment. Cannabis products are often sold as dietary supplements, topicals, and edibles, which means that they have many similarities to foods, beverages, and beauty products. With national legalization ahead, including this type of talent is likely to generate exponential returns in the future.

For example, Cresco Labs – one of the largest vertically integrated MSOs in the United States – hired Ty Gent as Chief Operating Officer (COO) in early 2021. Ghent brought more than 35 years of CPG and supply chain leadership experience in executive positions for US Foods and PepsiCo. Cresco Labs announced that Ghent has been discontinued, among other reasons, because it has a track record of taking operations to the next level while optimizing integrated supply chains.

In 2020, Cronos Group hired Kurt Schmidt as President and Chief Executive Officer (CEO). Schmidt brought more than 30 years of CPG experience to Cronos in leadership roles at Blue Buffalo Company and Nestle SA Cronos Group announced that the reasons for hiring Schmidt were not just his CPG experience but also his track record of working with start-up founders were in the late stage in order to accelerate accelerate growth.

Also in 2020, Tilray recruited a new Revlon COO, Jon Levin, and Canopy Growth replaced its CEO with a Constellation Brands executive, David Klein – just two years after Constellation Brands first acquired a stake in Canopy Growth.

Another great example of a cannabis company hiring executives with extensive CPG experience is Parallel (formerly Surterra Wellness). In 2019, the company recruited executives from a number of CPG senior positions, including Fareed Khan of Kellogg as CFO and William “Beau” Wrigley, Jr. (who was heir and CEO of Wrigley’s confectionery company, sold to Mars in 2008).

Why CPG executives are moving to cannabis companies

CPG executives move to cannabis companies for a variety of reasons, but the most talked about are financial potential and the opportunity for innovation and significant growth.

In 2021, Troy Datcher left The Clorox Company to become CEO of The Parent Company. Datcher said he came to The Parent Company to help shape the future of the cannabis industry on the front lines.

Also in 2021, Leaglich recruited Scott Shilling as CEO. Schilling brought with him experience in management positions at Diageo, Unilever and AB InBev. Upon accepting the position at Leaigible, Schilling said he looked forward to leading the company at an important turning point for both the business and the maturing cannabis industry.

The migration from CPG to cannabis is not just happening in the United States. In Canada, BevCanna recruited Raffael Kapusty to serve as Vice President of Sales and Insights. She worked in the US and Canadian retail industries for 25 years with positions at Ice Age Glacial Water Company, Kruger, SC Johnson and Unilever Canada. At the same time, BevCanna recruited Bill Niarchos as Vice President of Sales and Sales Operations. Niarchos brought 20 years of experience working for companies such as Bayer, Colgate Palmolive, Walmart, Costco and more.

It is important to note that the migration from CPG to cannabis is not a new phenomenon. It’s just getting more and more common. In 2019, John Griese already held two leadership positions in the cannabis industry before joining Supreme Cannabis as COO. However, he had spent years in executive positions for PepsiCo and Nestle before moving into the cannabis industry. Why did Griese come to Supreme Cannabis? He explained, “I wanted to work with the most passionate people in a company that shaped the industry.”

Bottom line, promises of future equity, bonuses, stock options, and other financial rewards are certainly one of the reasons CPG executives migrate into the cannabis industry, but money isn’t the only reason. Enthusiasm, innovation, passion and the desire to build something are also very important to many of these seasoned leaders.

Key takeaways from CPG executives in the cannabis industry

As the cannabis industry continues to mature, it will become increasingly common for executives to be recruited by CPG companies. There is a point in the life cycle of any business where leadership typically needs to change to move to the next level of growth.

Then a leadership team experienced in leading a similar cycle of growth, understanding and avoiding obstacles, and identifying opportunities is critical to the success of the cannabis business. Many of these new cannabis team members will be rooted in CPG companies.

You can keep track of cannabis license holders, key contacts and more in the Cannabiz media license database. Subscribe for comprehensive financial research data, M&A targeting, and ratings Cannabiz Intelligence ™ – the business intelligence tool for the cannabis and hemp industry. Schedule a demo to see it in action.