As the cannabis industry matures, many original entrepreneurs are leveraging their experiences to transition from their businesses. This article discusses insights from five former cannabis executives about their exits and the strategies they employed during this process.
Nancy Whiteman founded Wana Brands in 2010 and executed a $297.5 million deal with Canopy Growth Corp. in 2021. Whiteman remained with Wana until May 2022, when she shifted her focus to philanthropy, establishing the Wana Brands Foundation with a $50 million endowment. The foundation has since donated over $6 million to more than 150 nonprofit organizations addressing mental health, food security, and social justice.
Whiteman decided to exit Wana after observing the consolidation within the industry. She expressed concerns that independent brands would struggle to compete with larger multistate operators. She noted that the current market is challenging for sellers, as many buyers are looking for bargains amid a saturated landscape. Whiteman advises founders to choose buyers carefully and to clarify their post-acquisition roles, emphasizing the importance of alignment with the buyer’s vision.
Pete Kadens left Green Thumb Industries in 2018 to prioritize family and philanthropy. He noted that he exited at a favorable time when stock prices were high, which allowed him to pursue various business interests, including owning funeral homes and coaching basketball. Kadens chairs the Kadens Family Foundation, which has helped 5,000 students attend college. He reflected on his decision to step away from cannabis, indicating that while he briefly considered a leisurely lifestyle, he ultimately wanted to set a positive example for his children.
Joe Caltabiano exited Cresco Labs in March 2020 following a disagreement with his partner regarding the company’s future. He launched a special purpose acquisition company (SPAC) in 2021 but closed it the following year due to market downturns. Caltabiano then founded Healing Realty Trust, focusing on outpatient medical facilities, which he sees as increasingly relevant as more healthcare shifts away from hospitals. He aims to make a financial impact by supporting cancer initiatives, drawing from his personal experiences as a childhood leukemia survivor.
Gail Rand co-founded ForwardGro, Maryland’s first licensed medical cannabis cultivator, to help her son manage seizures. After exiting the company before its sale to PharmaCann in 2019, she became a strategic business advisor and joined the finance committee of the YWCA of Annapolis and Arundel County, which serves victims of domestic violence and sex trafficking. Rand warns future sellers to maintain realistic expectations about their business’s value and emphasizes the importance of trust when merging with another company, noting that exits often lead to new partnerships rather than complete separations.
Marc Beginin started Precision Extraction Solutions with a $45,000 investment in 2014, growing it to $40 million in annual revenue by 2019. After the company was acquired for $50 million in 2021, he faced a sense of loss as he transitioned from an active role to investor. Beginin attempted a hostile takeover of Agrify Corp., which he found challenging when his ownership stake was diluted. He advises entrepreneurs to focus on business growth rather than prematurely planning for exits, stressing the importance of having a succession plan to ensure continued success after stepping away.
These executives’ experiences highlight the complexities of exiting the cannabis industry, emphasizing the need for careful planning and consideration of future opportunities. As the market continues to evolve, the lessons learned from these pioneers can guide new entrepreneurs in making informed decisions about their businesses.
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