Corporate governance an emerging priority for Canadian cannabis firms
By Mari-Len De Guzman
LAS VEGAS – Good governance may be emerging as a high priority for Canadian cannabis companies in 2020, as organizations get a better handle on operational processes and develop more effective metrics and key performance indicators (KPI).
This was a highlight of a panel discussing the Canadian cannabis market outlook for 2020, held at this year’s MJBiz Conference in Las Vegas.
Pointing to a recent report on governance ranking among Canadian corporate boards, Torsten Kuenzlen, CEO of Sundial Growers in Olds, Alta., said the cannabis industry needs to do better in the corporate governance game.
“Most of you have seen the good governance rankings come out recently and cannabis companies don’t feature very highly on those rankings. In fact, it’s very much towards the bottom,” Kuenzlen said, referring to the Globe and Mail’s recently released Report on Business, which ranked Canada’s corporate boards based on a set of governance criteria.
Kuenzlen added, however, that as cannabis corporate leaders overcome the initial challenges of building multimillion-dollar companies in such a short time, good governance will increasingly become a priority for many cannabis companies.
“There are so many things that you have to do as CEO, as the leadership team of the company, but that doesn’t excuse not being there when we need to be on governance. We had to work through our priorities, we need to build capacity, we had to hire and train people, we had to get the products out to service the market. The operational challenges are many. I think now that we are getting on top of those, it’s time to add more tools and that’s where governance comes in,” Kuenzlen pointed out.
Ensuring diversity among corporate boards in the cannabis industry will also be an emerging priority as corporate governance move up the hierarchy of corporate priorities, said Jeannette VanderMarel, CEO of cannabis licensed producer Beleave, based in Hamilton, Ont.
As one of the first female CEOs in Canada’s young cannabis industry, VanderMarel understands the challenges of navigating a male-dominated industry.
“Less than five per cent of board seats in Canadian companies are held by female. There are four female CEOs in the cannabis industry (currently). We really need to encourage and mentor women to take on these roles. I think it’s leading by example,” said VanderMarel, who was part of the Canadian Market Outlook 2020 panel at MJBiz Conference.
Cannabis companies are also beginning to look at resiliency and business continuity as part of their priorities for 2020, said Mitchell Osak, national cannabis advisory services leader at Calgary-based business advisory firm MNP.
“There’s also big awareness and interest in cybersecurity and protecting the data of your firm and the data of your customers, particularly in medical cannabis,” Osak said. “We see a significant push there and that is driven significantly by our internal clients as well as external stakeholders and investors. They want to make sure there are no massive blindspots that can cripple their companies.”
Some 25,000 attendees and 1,300 exhibitors in Las Vegas this week for the 2019 MJBizCon taking place from Dec. 11 to 12.