As Big Marijuana seeks legitimacy in the national marketplace, the cannabis industry’s top companies are packing their boards with stars.
Some of the world’s best-known — if not best-loved — politicians and corporate leaders are now paid advisers to major cannabis concerns.
Former Canadian Prime Minister Brian Mulroney was named to the board of Acreage Holdings, which operates marijuana-growing facilities in several states, including Pennsylvania. Mulroney sits on the board with former U.S. House Speaker John Boehner, who with former Massachusetts governor Bill Weld was named to the Acreage board in April.
“This is a really savvy move,” said Michael Useem, professor of management at the University of Pennsylvania’s Wharton School of Business. “You want a mix of people with a range of skill sets on a board, including someone who knows how Washington works and how voters may vote when it comes to legalizing whatever you’re doing. And John Boehner no doubt is as good an adviser as you can find on how to navigate Capitol Hill.”
While in office, Boehner and Mulroney were openly hostile to marijuana.
Boehner once said he was “unalterably opposed” to legalizing marijuana. But last week, he starred in an infomercial touting cannabis stocks. “My thinking on cannabis has evolved,” Boehner said on Twitter upon joining Acreage in April. Now he’s “all in on cannabis,” he said last week.
Mulroney’s government tried to keep marijuana in the same legal category as heroin. He told CBC this month that since he left politics there has been a “sea change in attitudes in the reality of the use of cannabis.”
The Acreage board also includes the former chair and chief executive of Time Warner Telecom, Larissa Herda, and the former chief financial officer of IBM, Douglas Maine. Herda also was chair and director of the Denver branch of the Federal Reserve of Kansas City. With banking a major stumbling block to cannabis industry expansion, Herda’s experience could be invaluable.
“Running AT&T is not the same as growing marijuana,” Useem said. “But the running of the companies is similar. It’s about strategy. You know John Walter will provide wise counsel.”
The traditional function of a board is to protect a company’s investors. In the realm of cannabis, the boards provide an air of gravitas and legitimacy. Both qualities have been difficult to establish given marijuana’s pre-medical history — populated by cliched images of glassy-eyed hippies and hipsters. And the federal government still considers nearly all traffic in marijuana to be illegal.
“The boards show the seriousness of the industry,” said Philadelphia cannabis entrepreneur-investor Lindy Snider. “The fact they can attract that kind of talent is very telling. They’re not going to take these positions frivolously It’s a great indicator of where we’re headed.”
Other former heads of state who advise marijuana concerns include former Mexican President (and former CEO of Coca Cola Latin America) Vincente Fox and former Israeli Prime Minister Ehud Barak.
The symbolism of corporate giants advising these companies can’t be underestimated, Useem said. “You want directors that institutional investors — the Fidelitys, the Vanguards and the BlackRocks — can trust and have confidence in.”
The board members, who also attract investment capital, are usually paid more than six figures a year, Useem said. They also get an equity stake in the companies.
“They’re attaching their reputations to the cannabis industry, which is risky still,” said Chris Walsh, founding editor and vice president of Marijuana Business Daily. “They’re probably getting a handsome payout, but they also may be realizing that this is truly one of the next big American and global industries and they want to ride that train.”
Brian McCormack, a director and co-founder of Cresco, said the board members are available seven days a week to advise Cresco’s executives. “We can have a board meeting in 24 hours,” he said. “That happens. We’re not just dialing it in once a quarter.”
And they truly believe in the company’s mission, to provide marijuana as a replacement for opioids and alleviate symptoms of PTSD and other ailments, McCormick said.
“We have a chance to change the world and create an industry,” said McCormack, an early Groupon investor. “We feel like we want to give back. John (Walter) believes in alternative forms of medicine. Tom Manning, who still runs Dun & Bradstreet, is a guy who loves to see young people build companies. It’s more altruistic.
“They’re not in it for large paychecks. They’re already massively successful.”
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