MJBizMag July 2020 - 92

Head Start
re-forecast sales for the next 12 months
every quarter.
" You have to build a financial model
based on what you know today and then
prepare for the future, " Dorkin said.
He further advised including the entire
management team-sales, supply chain,
manufacturing, distribution-in monthly
planning and scheduling review sessions
to strengthen decision-making.
Such forecasting might be even more
critical with the coronavirus outbreak,
a capital crunch and the specter of a
recession. Cash today truly is king,
Dorkin noted.
While many founders have a passion
for the business and technical expertise,
Dorkin has found some are resistant to
incorporating the data essential to developing
meaningful forecasts.
One excuse Dorkin hears is a lack of
data. But he noted many markets now
have historical sales data, which is the
basis for demand planning that feeds into
" what and how much we should produce. "
" Cannabis businesses are still resistant
to building a financial model based on
practical inputs, " Dorkin said. " Why?
Wanting to be off-the-grid, different,
not wanting to be corporate. " But the
basics of running a sustainable business
are " absolutely applicable " to cannabis,
he said.
The day of reckoning already is here
for many companies-witness the
carnage in California and mandatory
shutdowns in some locations because of
the coronavirus-and federal marijuana
legalization could usher in a second day
of reckoning if companies aren't on solid
financial footing.
Protect your
intellectual property
" One of the biggest areas of contention
and litigation in the future is going to be
intellectual-property matters, " said David
Wunderlich, senior attorney at McAllister
Garfield, a Denver-based law firm
specializing in marijuana and hemp law.
Consider having em ployees sign nondisclosure
agreements preventing them from divulging
trade secrets after leaving the company.
While it's virtually impossible now for
cannabis companies to obtain federal
trademarks for much beyond their logos,
businesses can still proactively protect
their trade secrets, Wunderlich said.
" There's a lot of things commonly
known in the industry about processes,
but plenty of companies are doing
innovative things, " he said. " Those trade
secrets should be treated accordingly. "
For example, make sure policies are in
place to protect valuable information as
much as possible from employees who
don't need to know it, and have employees
sign nondisclosure agreements
preventing them from divulging trade
secrets after leaving the company.
Companies also need to be careful that
proprietary information is safeguarded
when hosting suppliers and other guests
on-site. This is critical not only for
competitive reasons but also if owners
of a marijuana company want to exit the
business after legalization.
Buyers, Wunderlich explained, " will
want to be comfortable with your
ownership of intellectual property. "
They won't want to buy assets that
are loosely protected or are under the
strain of litigation because of intellectual
property breaches.
90 Marijuana Business Magazine | July 2020
Develop a consistent brand
and strengthen your
organizational structure
Cannabis brands don't have as much
value as they could, especially in crowded
state-legal markets such as California.
One reason: Budtenders-often
individuals in their 20s-have a lot of
influence in what consumers buy, and
their preferences might not square with a
company's overall brand strategy.
It's essential that companies develop
consistent branding in advance of federal
legalization, experts say.
Take it from multistate operator
Cresco Labs, which last year integrated
its dispensary brands in 11 states under
one umbrella called Sunnyside.
That's just one element in creating
a fundamentally sound and scalable
company in advance of federal
legalization, said Charlie Bachtell, CEO
of the Chicago-based company.
Also critical is strengthening the
organizational structure, in part by
recruiting talent from industries
relevant to cannabis such as CPG and
pharmaceuticals.
For example, Cresco recently hired
Greg Butler, who has a background
with Pfizer, Johnson & Johnson and
Molson Coors, to serve as its first chief
commercial officer.
Cannabis companies also should
work to clearly define their corporate
missions, bolster their standard
operating procedures and approach to
production, supply chains, warehousing
and distribution.
To an extent, " I think everything
we're doing is in preparation for federal
legalization, " Bachtell said.
Lobby for reform and
engage in the community
Caren Wilcox, executive director of the
U.S. Hemp Growers Association, said the
2018 federal legalization of hemp is really
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