As a high-growth sector, the cannabis industry requires CFO candidates who are hand-picked (no growing or picking puns intended), not plucked from piles of résumés. While CNN reports that legal cannabis sales are projected to rocket from roughly $26 billion in 2021 to $45.9 billion in 2025, high-level financial officers still face cash flow issues among a sea of upstart competitors, all while dealing with a complex and ever-changing mesh of legal and regulatory issues. 

Long story short, the role of cannabis executive calls for a different breed, and that’s something you won’t often get a sense of until the interview — here are just a few conversation starters to help ensure that your new CFO doesn’t just look good on paper, but is hired on purpose

1. The Cannabis Wellness Industry Is a New Frontier — What’s Your Place on That Frontier? 

Speaking to CNN, MJBizDaily CEO Chris Walsh says of the blossoming cannabis industry, “You’re seeing the next phase of a maturing industry take hold here.” While that’s great for headlines and hungry consumers, Y Scouts’ own Vice President of Search & Operations Sammy Siegal notes that, as a newly mainstream industry, “Cannabis has not been around for a long time, so there’s not a lot of experienced accounting and finance talent in the industry at the leadership level right now.”

Your aspiring CFO’s résumé tells you, in black and white, what their experience is. Likewise, their financial background most likely equips them to use historicals to create budgets and forecasts. In an industry where the narrative is still being developed — and developed rapidly — those strategies may not be as effective. In the interview, seek answers that show an understanding of how the candidate can leverage traditional skills and training among breakneck growth, constantly evolving regulations and the convoluted legal hurdles of a young industry. Consider that a baseline as we delve deeper.

2. How Do You Navigate in a World of Regulations? 

On the note of regulations, Siegal continues, “There’s not a ton of accounting and finance leadership talent that have experience in other highly regulated industries such as pharma, such as alcohol, such as tobacco, such as gambling.” A highly regulated industry is simply a very different beast all the way down the spectrum, from sales and distribution to marketing minutiae.  

Experience and exposure cannot be overvalued. Look for experience or exposure to 280E statutes, which limit federal tax deductions and credits on businesses dealing with Schedule I controlled substances. Think about this: You can buy a CBD tea at thousands of convenience stores, but your CFO inhabits a space where the FDA has yet to provide official guidance on CBD’s place in the commercial world; that sort of uncertainty calls for of-the-moment fluency in current laws and trends alike. Awareness of current movements like the push to lower cannabis sales taxes, increasingly common M&A deals, drives for social equity and climate change-driven unpredictability — all 2022 trends identified by MJBizDaily — is an excellent sign. Volubility in these areas indicates a CFO who is not only well apprised of current law but capable of pivoting at a moment’s notice.

3. What’s Your Strategy for Staying Agile Among Limited Cash Flow? 

Another hard truth from Siegal: “Most cannabis companies are operating with significantly lower cash flow than most other industries.” An interview answer that indicates strong experience in treasury, or at the very least in FP&A, is a real boon. Keep an ear out for experience (or at least perceptiveness) not only in dealing with constantly cash-strapped companies but in doing so in the midst of a rapidly changing business landscape and the ongoing dissonance between state and federal regulations. These factors all translate into finance and accounting smarts. While a CFO’s knowledge from a previous industry can indeed make the transition to cannabis, the most advantageous experience typically comes from other high growth and highly regulated industries. 

Congress has yet to lift banking restrictions on cannabis companies as of 2022, which also puts severe strain on their access to capital. Similarly, the still-lingering stigmatization of cannabis makes access to banking an ongoing pain point in the cannabis industry, so make positive note of existing relationships and awareness in the banking realm as well. 

4. How Does Your Bio Synergize with the Cannabis World?  

The cannabis world goes well beyond dispensaries and online storefronts selling CBD lotions or vape carts. There are as many types of cannabis companies as there are weed strains, from plant-touching businesses like breeders, cultivators, extractors and transporters to ancillary outfits like professional services, packagers, equipment manufacturers, wealth advisers, and security operations. As Business News Daily points out, plant-touching businesses are those that will deal with the most regulatory issues, but virtually every area will deal with a complicated web of necessary licenses and oversights. 

A solid cannabis CFO, especially one who comes from outside of canna-culture, understands that the industry’s learning curve can be a mountain climb. However, an agile exec can leverage past experience from any one of those aforementioned fields as a jumping-off point. A CFO who demonstrates that throughline in the interview is already starting off on the right foot.

5. For You as a Person — Why Cannabis? 

Sometimes, the simplest question is a gateway to the broadest, most revealing answers. While it’s easy to get lost in the financial muck, don’t neglect the human touch. One current reality in the cannabis industry, as Siegal puts it, is that, “Compensation is a challenge. A lot of these CFOs come from other industries that are earning significantly higher base salaries than what cannabis companies can afford.” So if it’s not necessarily the money, what attracts this person to the cannabis industry? Whether it’s a life-changing experience with cannabis, an attraction to innovative spaces, or a desire to move on from old-school pharma, a personal connection to, or even just a passion for, the cannabis industry helps create a solid foundation for a sustainable, healthy career. 

Don’t forget that the cannabis industry is a wellness industry. It’s a place where the human touch is welcome, where adventurers thrive, and where the idea that we don’t know everything is an exciting notion. Sammy Siegal’s advice? “Come in, eyes wide open. Know that there’s going to be a significant learning curve and you’ll do well.” In the interview, look through the résumé to find the person inside, and don’t sleep on people who are not just open to new ideas but are genuinely excited about learning.

Remember, cannabis executives are not typical executives; don’t hesitate to reach out to Y Scouts when you need help finding the atypical. 

 

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Dan Ketchum is a Dallas-based freelance lifestyle, fashion, health and food writer with more than a decade of experience. He’s been fortunate enough to collaborate and publish with cannabis companies such as Mistifi, Vitagenne, FOCL and Reign Together, as well as USA Today, The Motley Fool, The Seattle Times and more.