Text size

Canada has blasted out of the gate in the legal cannabis industry, with revenues expected to surpass $7 billion this year according to some reports. Just a single Canadian marijuana corporation, Aurora Cannabis, sold 9 metric tons in the last quarter alone.

Since Canadian law made cannabis legal last fall, there’s been an opportunity for explosive growth. And although U.S. federal law still bans marijuana, numerous states are legalizing it, sparking what CNBC says “looks like the fastest-growing job market in the country.”

This doesn’t only set the stage for broad competition between the United States and Canada in the pot industry. It’s also setting up a race for talent in executive suites on both sides of the border. I’m seeing this in action already as president of an executive search firm in Toronto.

Because marijuana has always been sold on the black market, the people with the most knowledge of the business have, by and large, not exactly been top-notch executives with experience running public corporations or large private companies. Now, however, everything is changing. The industry is quickly being taken over by legal, established corporations -- a transformation buoyed by a sudden infusion of cash from investors and stockholders.

With so many stakeholders, including regulators, to answer to, these corporations are facing a host of expectations. They’re establishing boards to oversee their operations. And, sensibly, those boards are demanding that leaders with experience running billion-dollar operations take over.

As EY noted, most LPs (licensed producers) “are highly entrepreneurial, which is to be expected, but they will need to quickly organize talent and apply the formality, rigor, and a lens for governance that established organizations do.” Just one of the many challenges these companies face is to “compete with other established adjacent industries — such as tobacco, pharmaceuticals, alcohol, and consumer products — which are likely to have an interest in entering the market for recreational cannabis. These companies have strong ties to capital, possess mature infrastructure, brand recognition, and the knowledge of operating in a highly regulated environment.”

So the search is on for CEOs and other executives to fill out pot’s new C-suites. These men and women are being lured away from pharmaceuticals and nutraceuticals; greenhouse growers; generic drug manufacturers; biotech companies; consumer packaged goods companies; and more.

It’s the latest twist in the ongoing competition between the U.S. and Canada for talent, and just

Phase 1 in the battle for “big pot”. The possibility that the United States will legalize pot federally is on the horizon, with a bipartisan group of lawmakers pushing to strike down the federal ban and let each state decide. If such a bill becomes law, there will be no federal impediments to pot sales. It’ll be fertile ground for the emerging industry.

When that happens, then the talent war will really heat up. U.S. marijuana firms will be looking to poach executives from Canadian companies -- executives who, by then, will have had enough time in the industry to see the challenges, opportunities, and avoidable mistakes, making them invaluable to emerging U.S. cannabis players.

Of course, this competition isn’t limited to just two countries. With more governments legalizing weed for medical use, Arcview Market Research and BDS Analytics predict worldwide spending on legal cannabis will reach $57 billion by 2027. So nations from Germany to Mexico can be expected to create new corporations -- and, in the process, look for C-suite talent with marijuana industry experience. Guess where they’ll look first? North America.

We’re also likely to see a surge in competition among investment banks for people with expertise in the pot sector. Legal Cannabis has been a boon to Canadian investment banks, particularly among boutique firms. And the Canadian arms of certain U.S. advisory shops have been actively involved in some of the industry’s largest transactions, such as Greenhill advising Canopy in its $3.4 billion deal for Acreage Holdings. As the United States takes further steps toward legalization, I expect U.S. banks to start looking to pluck Canada-based investment bankers with a specialty in cannabis, who are quickly distinguishing themselves as experts in this emerging sector.

All this is just the beginning. As marijuana legalization changes the landscape, all sorts of new talent pipelines are sure to sprout up. Already, more colleges and universities are launching cannabis courses -- quite possibly laying the groundwork to help develop pot CEOs of the future.

Adam Dean is founder and president of Dean Executive Search.