Grower good results in the cannabis sector comes down to the worth developed by way of manufacturing and retail processes, Shaun Nugent, incoming CFO of grower Vireo Overall health, told CFO Dive final week.
Nugent is a veteran executive who previously served as president and CFO of AllOver Media, CEO of Contour Technologies, joint CEO-CFO of Sun Nation Airlines, CFO of Life Time Fitness, and CFO of Champps Entertainment. He was named CFO of the Year by Twin Cities Enterprise magazine in 2014.
Nugent spoke with CFO Dive on Thursday about his new position and the approaches in which the swiftly expanding cannabis sector represents a departure from his extended CFO history.
“I’ve lived a pretty classic CFO profession,” he stated. “I began [as a senior audit manager] at Arthur Andersen, then became CFO [of Champps] shortly right after. When [Vireo] referred to as me, I wasn’t searching for something, nor genuinely searching at the cannabis space. But I was intrigued by the group [they were] a extremely vibrant group. I was sort of expecting a bunch of stoners in suits, but I didn’t get that. I got a genuinely qualified group.”
Cannabis is a larger sector than you consider
Nugent stated he was shocked by the size of the marketplace and its presence in the healthcare space. “I knew the marketplace was huge, but I didn’t see a lot of traction with any 1 firm,” he stated. “It’s pretty regulated, as well, so you have to be committed to organically developing, which needs a bit of sophistication.”
Possessing served as CFO in a range of industries, cannabis is a new venture about which Nugent is eager to study.
“What attracted me was the chance to appear at the manufacturing side and retail side and obtain exactly where the worth is developed, and create the model about that,” he stated. “I believed my customer-facing talent set would add a lot of worth in expanding the modeling, and capitalizing on organic and lucrative development, in particular in web page-primarily based expansion, customer-level marketing and advertising, and developing organization models about buyer excellence and service. It is all these points that sort of drew me to it.”
Enterprise challenges remain the very same
The extra Nugent discovered, the extra fascinated he became. “As I began to genuinely dig in and study about the sector, it began to develop on me,” he stated.
But cannabis, primarily, does not need considerably of a diverse repertoire than does getting CFO in any other sector. “I do not see [Vireo] as substantially diverse [from my prior companies]. It is a pretty identified quantity,” he stated. “I consider it will be a small bit diverse [because] it is so new. I consider the organization will reward these operators who know how to construct a organization about profitability and scalability, points I discovered early in my profession.”
As in any developing sector, getting a holistic understanding each of the marketplace and the information is integral to effective expansion, Nugent stated. “Firms that comprehend how to use information and technologies have a strategic benefit as firms get started to do the land-grab that is the cannabis sector,” he stated. “In impact, [being CFO of a cannabis company] is the very same job [as being CFO of an airline or restaurant chain].”
But as opposed to an airline or restaurant chain, Vireo have to grapple with the illegality of its merchandise at the federal level and in 17 states. Nugent calls that obstacle “certainly a thing to be considered” when considering about scalability.
“A lot of the industrial variables are at the legislative level, and you do not have a lot of handle more than that,” he stated. “To a specific degree, preservation of capital is going to be essential. Getting in a position to analyze investments, merchandise and diverse organization possibilities will take a pretty nimble management group.”
Nugent does not see the slow-to-legalize status of cannabis as considerably of a damper on the marketplace. “The speed and pace [of the cannabis industry] intrigues me. It is going to move promptly,” he stated. “Restaurants are restaurants, well being clubs are well being clubs. They currently exist, and you can appear about, and get most effective practices from them. But there’s only a handful of multistate cannabis operators out there.”
Seeking back at his tenure, Nugent stated he’s ready and excited to get to perform in a new sector. “I’ve spent the final 25 years operating and managing pretty classic enterprises, even although I’m a pretty untraditional particular person,” he stated. “I’m considerably extra of an operating CFO, and I’m genuinely searching forward to applying that nontraditional style to this open frontier, and genuinely driving outcomes.”
Nugent begins at Vireo on Dec. 2.