A recent UT Dallas Institute for Innovation and Entrepreneurship event demonstrated the institute’s commitment to enabling the next generation of new ventures by presenting a topic of burgeoning, yet unconventional, interest — the surging market in growing and selling cannabis.
Presented by both IIE and the Institute for Excellence in Corporate Governance and co-sponsored by CEO Trust, the March 26 event featured a lecture, “Inside the ‘Green Rush,” by Robert Birnbaum, an entrepreneur who built and later sold his controlling interest in Curaleaf, a successful medical cannabis production business in Connecticut.
“We are preparing the leaders and the products and service developers of the future,” Steve Guengerich, IIE’s executive director, said. “Part of our mission in entrepreneurship is to inform our students and the public about trends and changes occurring that, frankly, over time do have a dramatic effect on laws and on the way people govern themselves.”
Given that cannabis and marijuana, the dried flower of the cannabis plant, are illegal in Texas and at the federal level, Guengerich deliberated with his staff about whether to introduce students to the controversial topic. In the end, he said, he decided the topic was worthy of students’ and faculty members’ time and attention. He took up the issue with Dr. Hasan Pirkul, Caruth Chair and dean of the Jindal School, and got the OK to proceed.
Birnbaum, a former Wall Street investment manager who holds an MBA from the Wharton School at the University of Pennsylvania, discussed the opportunities — and the risks — of going into a business that operates at the fringes of the law in many states and outside it in others.
He spoke about the lightning-fast pace of change in the industry, equating it to dog years. He also explained how he got his company up and running, showed the audience industry projections and laid out the state of the industry from his perspective in blunt terms.
“The big story for marijuana is the illegal market migrating to the legal market,” he said. “Thirty-three states plus the District of Columbia now have marijuana legal in one form or another medicinally, and another 12 states … of those 33 … that have made it legal for adult use. Fortunes will be made; fortunes are being made, no doubt; but fortunes are being lost, too.”
Birnbaum predicted that “many, many iterations” of the industry were yet to come. He offered hope to those audience members who were considering entering the industry, saying that the successful companies of the future may not be the same ones that are successful today.
He got down to the nitty-gritty of managing a cannabis business by dividing its community into four “tribes,” some of which are at odds with the others, and describing the constant tensions among them:
• The Underground, such as marijuana growers who have the domain knowledge to create the product and have had it passed down, perhaps for generations.
• The Advocates, such as mothers with children who have epilepsy and breast-cancer survivors who tend to be aligned politically, culturally and spiritually with those in the Underground and have worked to change marijuana laws through grassroots efforts. Entrepreneurs, thus far, have been part of the Advocates tribe.
• The Money, those with the ways and means to scale the cannabis industry into “Big Cannabis.”
• The Scientists, those who can apply scientific methods, engineering knowledge and operational discipline to a marijuana business.
“The Money wants to get the domain knowledge out of the hands of the Underground and into the hands of the Scientists,” he said. “The Underground knows this. They get the joke, so they’re not cooperating.”
Birnbaum concluded his presentation by showing a photo of an archeological find of 13 cannabis plants shrouding a corpse in an ancient burial in northwest China. The presumption, he said, is that cannabis consumption was common at that time.
“We have lived through an unusual period of 120 years or so of widespread prohibition of the use of cannabis,” he said. “But the fad isn’t marijuana; the fad is the prohibition — and the prohibition is fading away all over the world.”
Teddy Ladd, a global business senior who is fast-tracking into the MBA program, attended the event because Guengerich, who teaches Introduction to Innovation and Entrepreneurship (ENTP 3301) in which she is enrolled, recommended that she scout some entrepreneurial ideas.
“When I realized what it’s all about, I thought it was kind of interesting because we’re in the middle of a turning point for this sort of thing,” she said, Her degree focus is on innovation and entrepreneurship. “The focus of the class is to focus on ideas for your own business. If the cannabis industry became legal in Texas, it would really do a lot for the economy.”
— Jimmie R. Markham