How you structure your business sets the tone for your relationship with investors, defines how you connect to your target market and results in the company’s overall profitability. If your management doesn’t reflect your target market’s diversity, you may find that your corporate vision is detached from consumers and investors alike.
An analysis by Marijuana Business Daily concluded that men hold 93% of all boardroom positions in the leading Canadian marijuana companies. Further estimates show that 99% of licensed cannabusinesses are owned by white business owners.
For any successful marijuana business to connect with its target market, it needs to structure the management team – from executives, to senior managers, to supervisors – in such a way that it encompasses a diverse spectrum of individuals. Women, minorities and baby boomers are considered some of the fastest growing sectors of cannabis users.
By ensuring that you have gender, racial and age diversity within your corporate structure, your business is able to respond to those demographics’ needs rather than a monochromatic board of similar individuals.
Connecting top management to operations
It’s no surprise that the larger the company, the more removed business executives typically are from the day-to-day business operations. For example, a small grower operation may have an office on the same parcel of property as they grow. A large cannabusiness may have corporate offices several cities or states away. However, when you add distance and multiple levels of managers, the business owners and board of directors may become unaware of what is occurring in their facilities.
It’s imperative that these individuals, who are often vetted at the state (and sometimes local) levels for licensure, are knowledgeable about the day-to-day operations. Regulatory compliance becomes increasingly more challenging when you factor in multiple cities or states, or different license types. To foster a sense of strict compliance with the state and local laws, the corporate ethos needs to be established from the top down.
If your LLC’s members connect to the operations and show an interest in maintaining compliance, the work environment will reflect that. Take the time to create offices in or near your facilities, or arrange management facility visits on a regular basis to instill a sense of corporate responsibility and compliance.
Regulatory compliance is key for corporate governance
At the end of the day, how you structure and implement your corporate governance policies ultimately impacts your history of regulatory compliance. A company that’s familiar with the industry’s ever-changing laws and regulations and creates procedures for ensuring compliance holds the highest chance of success.