Few come to HBS with the intention of pursuing a career in cannabis. But that won’t be true for long. Recent changes in the regulatory landscape have opened tremendous new market opportunities. Today 10 states and the District of Columbia have legalized recreational adult-use cannabis, and a total of 33 states have legalized medical use. The majority of the American population lives in a state where cannabis is legal in some form. The States Act currently being contemplated has the potential to encourage even further state-level legalization. A wave of new cultivators, manufacturers, distributors, and retailers have emerged to capitalize upon this opportunity. This still nascent industry has already minted a new class of billionaires, with several companies listed on Canadian stock exchanges already enjoying multi-billion-dollar market caps.
For Dan Reid (Old Section A), living in California, a state where medical cannabis use has been legal for the last 20 years, prior to HBS meant being exposed to cannabis on a near-daily basis. Whether he was enjoying a sunset in San Francisco’s Dolores Park or a pseudo-hike in LA’s Runyon Canyon, the unmistakable smell of cannabis permeated the air. Still, that doesn’t mean it’s a viable career path. Or so he thought. The lightbulb went off for Dan during RC year after he had the same conversation with many classmates: being at HBS provides the opportunity to do anything, to reinvent yourself regardless of your previous skillset, so what will be the next major high-growth industry of our time? How can we “ride a wave” or “time a 10-year secular growth cycle,” depending on your affinity for finance jargon?
On the last day of Mark Roberge’s TEM class, his parting advice implored students to consider entering industries expected to grow significantly over their careers. The experience could be life-changing. Mark mentioned AI and robotics as possible choices. Dan’s mind went in a different direction, but the lesson was well received. Dan decided to pursue an internship in cannabis with the goal of working in the industry full time.
Few industries exhibit the level of growth at a scale that cannabis will undergo over the next few years. Markets with sustained, multi-year compound annual growth rates of 25% to 35% even after they reach and exceed the $8 billion to $10 billion range are hard to find across any period of time. It’s a comparable set populated with the likes of cable TV and broadband internet.
Despite the attractive market dynamics, HBS had yet to develop the infrastructure to nurture an interest in the industry. There was only one internship posting on CPD. No conferences to meet relevant executives. No forum to network with other interested students.
Jack Ambridge (Old Section F), Drew Johnson (Old Section F), and Dan started the Business of Cannabis Club and serve as co-presidents to address exactly this need. Joined by founding members Sasha Slayton (New Section A) and Anthony Tayoun (Old Section F), the Club aims to provide interested students with all the same opportunities enjoyed by HBS students pursuing careers in other industries. Many other top-tier universities have already embraced this trend. Wharton, Stanford, and Yale already had cannabis clubs. Why not us?
To that end, we’ve put together a compelling speaker series for the rest of the semester. Our goal is to bring a combination of investors, operators, legal experts, and regulators to campus. We’re also in early discussions with a Massachusetts-based operator about a potential tour of the facility. That we have had engagement from some of the biggest names in the industry is a testament to the power of the HBS brand.
The Club had its first speakers visit in February. Emily and Morgan Paxhia, sibling co-founders of Poseidon Asset Management, gave a presentation and networked with students afterward. Poseidon was one of the first (if not the first) pioneers in cannabis venture capital and remains one of the preeminent investors in the space. In addition to a great presentation and a generous donation of her time, Emily also brought representatives from portfolio companies interested in hiring HBS students. Other portfolio companies have since reached out to us with a list of job openings. One of the Club’s goals is to act as a liaison between companies looking to hire MBAs and students keen to enter the space, and we couldn’t be happier with this early traction.
Cannabis has been a wildly popular product for thousands of years, and the end of prohibition in the United States will only act as gasoline on the fire. Big Tobacco (Altria) and Big Alcohol (Constellation Brands) have made multi-billion-dollar investments in cannabis because they know it’s mainstreaming and normalization is here to stay. And they are right to fear for their core businesses. Alcohol has maintained its dominance in the economy because of its status as one of the few legal drugs. Cannabis provides a calorie-free, hangover-free alternative that’s less addictive than coffee or sugar. Unlike alcohol, users can’t overdose. And cannabis usage isn’t strongly linked to violence, domestic abuse, or depression, as alcohol is.
Whether you approve or not, cannabis will grow into one of the biggest consumer products of your lifetime. Analyst forecasts for eventual steady-state market sizes are egregiously wide, ranging from $125 billion to $300 billion. For students interested in learning more, we want to serve as a resource. For those looking to join the party, we hope we can help you get there.
Dan Reid (MBA ’19) split his childhood between London, Germany, and Atlanta before attending Georgetown University. Dan lived in California for six years prior to HBS, where he worked in investment banking, in venture capital, and at Netflix. Dan enjoys travel, camping, Phish concerts, and Bernese Mountain Dogs.