August 23, 2019

Gavin Kogan Discusses Entering the Cannabis Industry

This week on A Tech Moment, Gavin Kogan of Grupo Flor spoke with Cannabis Tech’s Kristina Etter. Kogan, Chairman of the Board at Grupo Flor and currently working as VP of Government Affairs, is a fierce advocate for entrepreneurs in cannabis. His opinion, however, does not come without caveats.



It's this view detailed within his recent article for GreenEntrepreneur, "Cannabis: The Afghanistan of Entrepreneurs?" that sets him apart from the current flood of traditional executives transitioning to cannabis.

Kogan's career before launching Grupo Flor was as an attorney. He fell into cannabis almost by accident after an unplanned work-trade resulted in him owning a piece of a business operating in the sphere. Soon, this serendipitous agreement transformed his entire law practice into one that works strictly with the cannabis sector.

Now nearly two decades later, Grupo Flor is "one of California's least-known largest companies." Grupo Flor is an international vertical cannabis ecosystem, based out of Kogan's home base, which currently holds over 29 local and state licenses in the state.

As Chairman of the Board, and VP of Governmental Affairs, Kogan is modest about his role, stating, “I'm more back in Amsterdam with the bearded men around the Shipping Guild table making destination and trade decisions.”

Yet, Kogan, has witnessed the spread of the green rush from its very beginnings. Based on his nearly 20 years of experience navigating the murky waters of cannabis in California, and legalization at a national and international level, he has a few opinions worth noting on the recent crush of entrepreneurs flooding into the space.

Kogan's "Cannabis: The Afghanistan of Entrepreneurs?"

In his aforementioned piece for the GreenEntrepreneur, Kogan originally put forth the idea that cannabis isn't for everyone. In this July post, he argued that just like the quagmire of Afghanistan, marijuana might be a quagmire for many business-savvy but not cannabis-savvy entrepreneurs.

His most notable advice to any entrepreneurs entering into the green space would be, “Don't go rearranging the furniture until you know who owns the house." The cannabis ecosystem is still the wild wild west, with norms, policies, and expectations uncharacteristic of other, more conventional sectors. Executives hoping to take advantage of the boom should be wary of the transition period. He advises against making sudden movements until you get your feet wet.

Kogan’s engaging opinion piece concludes with several key takeaways for those thinking about moving from a traditional business into cannabis:

  • First, cannabis doesn't need you. It's been a highly profitable sector for decades despite the war on drugs.
  • Second, a simple business strategy is an effective one, even in the evolving world of cannabis.
  • Third, cannabis takes hard work and patience. It is not a get-rich-quick scheme.
  • Fourth, unlike other sectors, the cannabis community is close-knit and connected. Your reputation can be everything.

Bringing Old School and New School Together

During the conversation with Kogan on the state of the industry, he explained his experiences watching cannabis evolve from illicit to legal. As he described, "When you come into a cannabis company, or you are leading a cannabis company, at this time there are really two types of people I'm seeing."

The first type he describes is what he calls the legacy cannabis people: the folks who worked in the black market model and may know the plant, but who may not understand the nuances and complexities of running a legal business. Without these skills, they are unable to scale a formerly illegal business in the legal market. The second type of person entering into the arena is the traditional entrepreneur, who may be extremely business savvy but knows nothing about cannabis.

Grupo Flor works hard to bring these two areas of expertise together: the people who know the plant but have no resources, and those who have the resources but no knowledge of the plant. Although many entrepreneurs might assume their success elsewhere will translate perfectly to cannabis, they often neglect the importance of the old ways.

Without collaboration between the two sides, there is bound to be a failure. That said, Kogan believes failure is crucial to building great businesses. He is a big believer that "great entrepreneurialism is about failure." Failure separates the good entrepreneurs from the bad, as failures force innovation and smart, real-time pivots.

Cannabis may be the perfect example of where failures bring out the best in a company. Each new regulation rollout, contamination scandal, or crop failure is a chance for a business to evolve with the changing landscape.

Kogan is an advocate for entrepreneurs trying their hand in this new and volatile industry. In his opinion, eager entrepreneurs should take what they already know from outside the sector and consider how it may apply within. No other sector will make or break an idea like cannabis can, but Kogan advises these failures will build better businesses.