Where the Cannabis Industry Fails: Community & The Future

The fourth of four in a series

By Toby Shillito

Prohibition has prevented the normal growth of CSR (Corporate Social Responsibility) issues in the cannabis industry. In this last of four articles, Shillito considers: the effects on the Community and looks to the Future.

Prohibition does not only mean that horticulturalists can go to jail. It also means that business people find it hard to:

• form partnerships
• make long-term investment decisions
• avoid a transactional sales mentality
• develop a positive corporate culture and
• manage a socially and environmentally sustainable business model.

In short – prohibition disrupts cannabis businesses from functioning healthily.

With prohibition in retreat, there are emerging opportunities for companies to show – and mean – how their operations both:

• address the threats to the planet and people and
• take advantage of the opportunities to do business in a considerate, conscious way.

To do this successfully, companies need to look beyond the traditional borders of the industry, to address their impacts on the wider environment and beyond this to their social responsibilities: to staff in the workplace, suppliers and customers in the marketplace and the communities that live around their areas of operation.  This fourth article looks at the impacts of prohibition on the Community and looks to the Future.

Community

Giving back

Under the conditions set by prohibition, cannabis entrepreneurs shunned social interaction. They had very limited opportunity to contribute positively to their local communities and had no incentive to do so. But a hallmark of a socially aware company is that it will seek opportunities to ‘give back’ to the community from which it receives its labour supply and other resources. This is an acknowledgement that the company operates as part of a wider system of relationships and exists not only to return profits to shareholders but to create value to wider society. So imagine the possibilities when the ‘bad guys’ turn out to be ‘good guys’, seeking to do good in society?

Philanthropy

This may take the form of philanthropy, sharing some of the profits with local community members – for example, through sponsoring education, repairs to local infrastructure, financing the arts or funding community-based events. These initiatives can be sporadic and random, but do allow benefits to flow from corporate profits to benefit local concerns.

Social benefits

A higher form of achievement is to address the local community’s social issues into the heart of the business model. Damian Marley has recently highlighted this approach through his acquisition of the former prison, Claremont Custody Center in Coalinga, California and conversion into a 77,000 sq ft cultivation and processing facility to supply local dispensaries. The plan is to employ many of the local population of this economically deprived area, thereby cutting public debt and providing jobs to the long-term unemployed. This is not only altruism. It provides a social benefit as part of a profitable, long-term business vision.

Under Prohibition, branding and formal marketing campaigns do not exist. There was no ‘halo’ effect from publicising a company through its products.  This is set to change and the smart new cannabis producers will understand that their image cannot be faked, but must be built on transparency, fairness and the true quality of the product. Cannabis companies have an opportunity to differentiate themselves away from the street corner criminal, in order to reach new consumers: older people who re-discover their lost love for the plant and younger consumers who expect ethical corporate behaviour and produce.

The Future

In a pure sense, entrepreneurial companies do best when they embrace these issues into the DNA of the company from the start. Rather than seeing these responsibilities as an ‘add on’, such as “we’ll get around to some low impact packaging when we’re rich enough”, they promote a healthy mentality – an ethos of sustainability in all things – as a natural part of ‘how we do things around here’. The issue is not about ‘greening’ parts of the supply chain, but influencing suppliers and customers to produce and demand the highest standards to de-carbonising the entire length of the supply chain, from raw materials to post-consumption disposal of the product. In the finest examples, this leads not only to avoiding negative impacts, but taking advantage – competitive advantage – of the opportunities to differentiate themselves from their competitors in how they act in the marketplace.

In practice, there is a ladder of achievement: to stand on the bottom rung, a company might be paying above minimum wages or reducing and recycling environmentally malign materials. At a higher level of achievement, a company might be offering equal opportunities for promotion to staff, sacking bullies, contributing to society through tax payments or charity work, changing cultivation techniques so as to save resources (and money) and supporting customers in making positive product choices. 

Post-prohibition, there are opportunities to develop – and exceed – industry standards in environmental, product, people and philanthropy management. In future, companies that work to reduce the carbon intensity of their supply chains will be able to demonstrate to conscious consumers their commitment to environmental sustainability. Those that treat their staff and suppliers humanely will gain trust, loyalty and enhanced profitability.

1 Environment / 2 Workplace / 3 Marketplace / 4 Community & The Future

Toby Shillito has been cultivating cannabis for 28 years. He holds an MBA from London Business School and is currently CEO of Sunshine Labs, a provider of legal Cannabis flowers and derivatives based in Europe, which seeks to do business responsibly. He can be contacted on tobyshillitouk@gmail.com