“Our generation was the Sesame Street generation – we were supposed to grow up color blind, but instead, it seems we just ended up blind to our surroundings and I wanted to be part of the solution.”
About 20 percent of small businesses fail within the first year, 30 percent in the second year, and by the end of the decade, only 30 percent of businesses will remain — a 70 percent failure rate, according to data from the Bureau of Labor Statistics.”These statistics reveal the complexities if setting up a new businesses. As Amy Nathan puts it:
“It is hard work to build a business. In addition to having a plan on paper, you need an incredible team, you need to know your team can survive adversity, and you need to be very clear about how you will show up as a partner to your investor and the type of partnership you want to have with the investor.”
When the business is cannabis things get even more complicated. The industry is new and evolving and consequently there is no “fool-proof starter guide” that entrepreneurs can grab to get them up and running. Cannabis being a scheduled substance (CSA schedule 1) makes matters even more complicated.
Business owners have to work through several compliance hurdles against a backdrop of cannabis laws that keep changing time and again. At the same time, there is limited access to financing as most traditional finance institutions would not touch MRBs (marijuana related businesses) even with a 10-foot pole.
Amy Nathan is the Founder & Co-Executive Director at GROmentum Lab, a community-based cannabis business accelerator which supports cannabis entrepreneurs from marginalized communities with access to capital, mentorship, culturally relevant educational programming and assistance navigating the many options related to investors and equity ownership.
In this interview, she narrates to us her journey through the cannabis industry as the exec director of GROmentum Lab, lessons she has learnt, and offers her 2022 predictions for the industry.
The cannabis industry is one that many would rather not associate with. How did your career path lead you here?
Besides always being a friend of the plant personally, my last job in corporate America was implementing a state-of-the-art anti-money laundering system for one of the largest banks in the U.S. My office happened to be located down the hall from campaign headquarters of then candidate for Illinois governor, J.B. Pritzker. On a daily basis, I would find myself working on minimizing risk to the bank from working with clients who might be MRBs (marijuana-related businesses), which at the time was a ‘no-go’ for most major U.S. banks. I would also hear excited campaign staffers talk of the centrality of legalizing adult-use cannabis in Illinois. The bank where I worked also caught the bug and asked me to consider a new position helping them figure out what to do with cross-border clients who were MRBs in Canada, where cannabis had just been legalized, even though it was still considered an illicit controlled substance in the U.S. That got my wheels turning and made me consider a seismic shift in career paths.
You help cannabis businesses make strategic decisions and move past industry hurdles. Which skill set, experiences, or personal attributes makes you successful in this role?
I attribute persistence, insistence and consistence and deep faith to my success. For example, my husband and I tried for 11 years to have a family. We literally did every single thing anyone could possibly do. It paid off when we adopted our beautiful daughter 3 weeks before our timeline was supposed to expire.
I apply this persistence, insistence and consistence to my work in this rollercoaster industry as well. As Founder and Co-Executive Director at GROmentum Lab, a community-based cannabis business accelerator for social impact, I am constantly encountering obstacles. To make your entrepreneurial dream come true, you need to look at obstacles objectively, then come up with a plan to remove them. There is always more than one way to solve a problem. You have to consider different perspectives and be nimble and flexible enough to zig and zag to ultimately arrive at your end objective. It makes no sense to get stuck on a path if you are unable to move forward.
While no one could anticipate the impact the pandemic would have on cannabis-related businesses, at GROmentum, the pandemic allowed us to keep moving and GRO’ing. It gave us the opportunity to further build out our accelerator program to become best in class, and allowed us to bring in fresh and different perspectives and approaches from industry operators and professionals across the country.
You are passionate about social equity in the cannabis industry. What fuels this passion?
I grew up in a community where our clergy walked in Selma with Dr. Martin Luther King Jr. and there were huge letters inscribed on the wall of the sanctuary from Leviticus, “Justice, you must relentlessly pursue.” I was a kid who definitely mentally wandered off during prayer time, but I could not escape those huge letters on the wall and they were very meaningful to me. Early in my career, I went abroad to do exactly that. I found myself working in a war zone at a business incubator which helped economically empower people to overcome stereotypes and roadblocks that prevented them from peace and prosperity. Although I was completely electrified by the experience and the possibilities, it was early in my career and I realized I needed additional skills to do this type of work on a more macro level.
When I returned to the U.S., the discussion of adult-use legalization with social equity as its cornerstone in Illinois got me to diving deeper into what it meant and what the goals of the program were. It suddenly hit me that literally during my adult-life, and that of my peer group, we had witnessed the impact of the ‘war on drugs’ all around us. Though there may have been antecedents in place prior to it having been declared in the mid-80s, most of what we now refer to as the ‘war on race’ took place on our watch as we emerged from our youth, and most of us did little to nothing about it, as appalling as that is in retrospect.
Our generation was the Sesame Street generation – we were supposed to grow up color blind, but instead, it seems we just ended up blind to our surroundings and I wanted to be part of the solution. I know it is cliché, but I never ended up taking that job at the bank because I wanted my background in business incubation and consulting in highly-regulated industries to be more directed to populations worthy of benefiting from it.
Tell us more about your advocacy role in the cannabis industry.
GROmentum Lab advocates for the cannabis entrepreneurs we support. It is more about building up their own confidence in business operations so they can kill it in the market place. If someone did not grow up with a strong role model who built a business, it’s not necessarily obvious how to pull all aspects of a business together. You have to attract a team. You have to trust the people you put around you—but you also have to know exactly what to expect of them. You need to know enough about what they should be delivering that you can manage those expectations appropriately. You have to get them to believe in you. You have to communicate well. You have to build something your customers want. You have to get them to repeat purchasing your product. And you have to consistently deliver for them so they tell all their friends. And all the while, you have to do all these things better than your competition. But it doesn’t end there. You also have to make sure you do all this compliantly. And you need to court investors and continue to deliver per their needs. There are conflicts. There are obstacles. There are headaches, and there is stress. It can be extremely lonely even if you hold up a positive image as a leader and being optimistic. There is self-doubt. And there is winter in Chicago. When someone asks us to help interpret a regulation operationally, we dig in. When someone asks us for legal representation, we source trusted partners, when someone asks to be connected to investors, we find sources of capital. When we notice someone is demonstrating a myopic approach to developing their product roadmap, we bring data. We act often as a sounding board on so many issues entrepreneurs face.
We are advocates for entrepreneurs who have never before crossed these exact waters. The amazing thing about this community is they are no strangers to crossing choppy waters. They are typically incredibly agile and deft at making a change when needed. But our role is more on a personal and team rather than political, or legal level.
You are passionate about supporting entrepreneurs from marginalized communities launch out into the legal cannabis industry. What are some of the significant hurdles that you encounter in this capacity?
Most people would say access to capital is the biggest hurdle for these individuals. While I agree, accessing capital is really a huge hurdle, a lot of times the people who want to become entrepreneurs do not show up with the business acumen, or have not done the work required to be in position to be ‘investable.’ It is hard work to build a business. In addition to having a plan on paper, you need an incredible team, you need to know your team can survive adversity, and you need to be very clear about how you will show up as a partner to your investor and the type of partnership you want to have with the investor. Most people in pursuit of capital – not only those from marginalized communities – have not given that much thought, or have not done so realistically. It is hard information to share, because people usually think they already know all they need to know and they just need money to do it.
The thinking needs to shift. Entrepreneurs need to be honest about the gaps ahead of them and share their perspective, along with their plan to address them, with their prospective investor. Humility also helps build relationships, especially when they’re about to launch into a marriage with their investor, not conduct a transaction.
Which is the most rewarding aspect of your job?
There’s nothing more satisfying than the excitement of watching an entrepreneur either understand something differently for the first time – literally watching them ‘gro’ or similarly hearing that they achieved a huge milestone and knowing we helped them get there. Both are incredibly exhilarating situations I find myself in daily. Just getting a call from someone who wants our advice, is a huge compliment, it means they perceived some value in what we provided in the past and want to come to the well again to drink.
What are your personal investment predictions for the cannabis industry in 2022?
I think this will finally be the year that the dream of launching social equity companies in Illinois comes to fruition. They will be allowed to start their operations and, while they might not be profitable in 2022 after so much time stalled, they will be on their way to getting there.
I also think other markets like New Jersey and New York will be incredibly exciting places to be for social equity and moving the industry farther in terms of people bringing plant-based wellness into their own hands, closing the wealth gap in communities of color, bringing badly needed diversity in this industry takes place, and that cannabis will become an industry that leads better utilization of energy – as states will begin to require it. Provided they have the business fundamentals down, I believe any company-focused attributes of the industry will do well, and investors investing in companies aligned with those principles will follow.
It was a great pleasure to have this one-on-one with Amy from GROmentum. Readers who wish to learn more about GROmentum should check out their website.