The Art of Connection: Inside The Canna Pac with RW Navis

The Art of Connection: Inside The Canna Pac with RW Navis

RW Navis: If they're coming out of big corporate America, they're going to have a major problem trying to fit in, because the cannabis industry changes so rapidly. Bryan Fields: What's up guys, welcome back to another episode of The Dime. I'm Bryan Fields, and with me as always is Kellen Finney. This week we've got a very special guest, RW Navis, executive recruiter and founder of The Canna Pac. RW, thanks for taking the time — how are you doing today? RW Navis: Great, great — this was a long time in planning. Bryan Fields: Absolutely, absolutely. Glad we're finally doing it. Kellen Finney: Yeah, excited. I'm doing really well, really excited to talk to RW and talk about the C-suite, cannabis events, and all the fun stuff. How are you doing today, Bryan? Bryan Fields: I'm doing great. I'm excited to talk to RW about some of the learnings he's found throughout his journey that can help cannabis companies facing such challenging decisions, especially right now. But RW, before we dive in — we've got a little East Coast/West Coast battle today. Originally, where were you born? Which coast? RW Navis: I was born in the New York area and lived there until I was nine. My father was also an executive recruiter, and his firm was sold to Korn Ferry way back then. He had a non-compete to work in the New York area, so he moved out to Los Angeles, and I've mostly been in Southern California for a large part of my career. I've also lived in Alabama, Florida, and the Bay Area up in San Francisco. Bryan Fields: I appreciate that, but Kellen, just from a birth certificate standpoint, I don't know how he could not be East Coast. Kellen Finney: But from a life-percentage perspective, are your loyalties on the West Coast, RW? RW Navis: Yeah, probably. I moved at an age where I got pretty involved in the LA sports teams — Lakers for sure. I was also a Rams fan, but they moved a lot, and the Dodgers — I was a big Dodgers fan too. Not so much anymore, but all that's getting edited out, right? Bryan Fields: He's an East Coaster — we're claiming him for the East Coast. RW Navis: Yeah, yeah, I like it. I've been back to New York quite a few times in the last two years on business, and it's great to go back — I've actually had a chance to see where I was raised. It's fun. Kellen Finney: Maybe now we've found the connection between Cali products and the East Coast of New York. RW Navis: Yeah, absolutely. And the world of executive recruiting — the headhunter world — was actually created in New York, so it makes sense. Bryan Fields: Interesting. So before we dive in, for our listeners, can you give a little background about yourself and how you got into the cannabis space? RW Navis: Sure. I've been an executive recruiter my entire life — the last eight years focused on cannabis, and before that, commercial banking. As I mentioned, my father was an executive recruiter, and I joined him after a couple years as a CPA with Peat Marwick Mitchell — it was called Peat Marwick at the time, now it's KPMG. I've retired a couple of times but came back into cannabis about eight years ago. I thought it would be exciting — the main reason I got involved was my son was, in my opinion, smoking a little too much, and I wanted to show him this was a business where people were making money, not just stoners hanging around having fun. So that was my impetus. I really enjoyed the people and saw a big need for what I do. I got started on the media side, writing articles for larger publications like MJBiz and Marijuana Venture, and I noticed that what people in cannabis were calling executive recruiting was really staffing — companies were charging executive recruiting fees for doing nothing but staffing. The difference between a real headhunter and staffing is that staffing just posts your job online and waits for people to answer the call, while a headhunter goes and gets your person from one of your competitors. If you want to win with your company, you need to be taking people from a competitor who may have something they don't have — better pay, better location, bonus, stock options. That's the way to really do well. I think cannabis, over the eight years I've been involved, is starting to understand this — it's not just getting resumes from a staffing company for critical roles. There is a level of position, more entry level, where that's fine, but beyond that they should be working with a sophisticated executive recruiter, and the fee structure is almost identical. Kellen Finney: I'll assume cannabis has a high turnover rate, and with capital being such a premium and limited runways, making these critical hiring decisions is paramount — the most important thing is making sure the person selected is right for the team. One of the statements you make is that companies that don't get this usually fail. Can you expand on that? RW Navis: What I've noticed is that most of the companies I do business with are still in business, even in California, where it's been a rough go. I'd say if you don't understand the difference between a headhunter and a staffing company, you're probably going to have trouble, because you're going to make a lot of mistakes hiring people. There are seasoned executives in cannabis, but there are also people running companies who've never really hired before, so they don't know the right way to go about it. And we guarantee our people — I'm not the only one who's good at this, but companies need to understand the difference. Kellen Finney: Cannabis hasn't been around that long — what percentage of your recruiting occurs inside the space versus outside, since there's a lot of overlap for something like a director of sales role? RW Navis: When they hire me, they want someone who's going to walk in with a Rolodex, so for sales, they're already in cannabis at another company. There are positions where they can bring people from outside the industry — any financial position, whether controller, CFO, VP of Finance, or staff accountant, those are transferable skills, although they'd still prefer someone from cannabis. The challenge for people coming from outside is that if they've been at a startup, they're okay, but if they're coming out of big corporate America, they're going to have a major problem fitting in because the cannabis industry changes so rapidly — it's like a giant startup. Kellen Finney: So it's great to have the corporate training, but ideally with at least one stop at a startup somewhere to be used to that environment. RW Navis: Right. I'm working on a general counsel position right now that could come from outside cannabis, and there are others. Sometimes operations positions too — cannabis is made up of farming, cultivation, manufacturing, which is almost like food production, so people can come out of food production to fill some of those roles. Extraction can also come from outside the industry, but there are certainly unique characteristics where it's good to have cannabis background. Kellen Finney: I think if you're hiring in cannabis, you can either hire someone inexperienced who learns — which is expensive and takes time — or pay more for experience with a shorter learning curve. Both lead to similar results, but how do you guarantee the employees you place? What's the vetting process your team uses? RW Navis: At this point, I've been doing this for decades, and I'm pretty good at looking at a resume and talking to people — after a Zoom call, I pretty much know whether they're for real. You look for people with a pretty good track record who aren't job-hopping. I recently filled a controller position where the previous person had had five jobs in two years — some of that can be the client's fault, but five jobs in two years is probably the candidate's fault. You look for people who are a little more loyal to their employer. We also do our own background checks and vet them with references, talking to people they've worked for or with. Sometimes knowing which companies they've worked for helps too, because certain companies have very strict hiring practices, so if you were hired there, they've somewhat done part of the vetting for us. Bryan Fields: When you're talking with people outside the industry who are curious about cannabis, do you give them the honest truth — that it's harder than the media perception of everyone making a ton of money? RW Navis: I do get calls like this frequently, especially from corporate people. I remember a general counsel in New York who said he really wanted to get into cannabis. I asked what comp he was looking for — he said $500,000 a year — and I had to explain that the comp isn't there yet in cannabis. Someday it will be, but right now those high-level positions are few and far between. Cannabis salaries lag — base salary may not be fantastic, but there's often a bonus and equity package as part of the deal. Cannabis is lagging a bit compared to more competitive industries right now. When safe banking comes in and there's more capital in the industry, and eventually when 280E goes away, people have told me every cannabis company will be worth twice as much because they can deduct the same things other companies can. Combine that with an influx of capital, and it's a different ballgame. It could happen this fall, or maybe not, but both rescheduling and safe banking are on the table again. Kellen Finney: My favorite aspect of that is we're not expecting different rules than everyone else — we just want normal, standard practices, a reasonable tax structure, a fair chance. Bryan Fields: So when companies come to you expecting a long Rolodex, that probably leads nicely into the origin of The Canna Pac. Can you take us through how that was formed and how the two businesses integrate? RW Navis: Sure. During COVID I started a Zoom call because the webinars I attended were boring — the same structure every time, one expert talking for ten minutes, then another. I was ready to fall asleep. So we made our Zoom call much more interactive, not letting anyone speak for more than a minute or two — all Q&A. We did that for at least a year and a half, every week, and developed a loyal following. As soon as we could, we went in person, choosing outdoor rooftop venues where people would be comfortable coming out of COVID. We started in Oakland, gravitated between Southern and Northern California, then went to Arizona, and eventually New York, Washington DC, Miami, Chicago, and New Jersey — we're national now, going once or twice a month. I'd been to literally every cannabis conference, and I noticed that at some of the more elite ones, only vendors selling services showed up, not actual operators. With The Canna Pac, we focus totally on operators — it's invite-only and paid for by sponsors, so the only people selling services are the sponsors themselves. We keep it at the C-suite level: CEOs, CFOs, founders, managing partners. A lot of business gets done at these events — companies have been bought and sold from people meeting there. It's low-key, and I think it's been a great business development tool for me and for the sponsors, who we cap at four per event to spread the cost. Bryan Fields: Give us some insight into the event for those who haven't attended — as a sponsor, do you get the guest list, a presentation, how do you get access to the right people? RW Navis: We post about sponsors on LinkedIn and send emails to our list before the event, including pictures so people recognize them when they arrive. Sponsors can bring their team. I have two people who act as ambassadors at these events — they memorize the sponsor list and physically walk attendees over to the sponsors. That allows a sponsor to leave with four or five conversations that will go to another step. Kellen Finney: Do you theme these events — like one focused on cultivation — or tailor them a certain way? RW Navis: No, they're pretty much high-level executive happy hours. The idea is we come to you — most people are driving within an hour of the event, though some fly to all of them. It's an evening event, usually starting at five or six and running about three hours. We go back and forth on whether to stop for announcements, because when things are going well, I don't want to interrupt the flow. Bryan Fields: Going back to the ambassador who walks people through introductions — that's such an important, delicate balance. Sponsors investing capital need real ROI, and having that concierge-style handoff instead of a cold, uncomfortable approach makes both parties feel the conversation is worthwhile. RW Navis: Right, and sponsors also get to invite their own people. Sponsorship costs somewhere between $2,500 and $6,000 — at $5,000 or $6,000, you can be the lead sponsor at most of these events, and depending on your level, you can invite as many guests as you want. If you're bringing ten guests as a $2,500 sponsor, and you look at what it would cost to entertain those people at these exotic restaurants — $100 to $150 per person — the sponsorship is almost free at that point, if you're organized enough to get the right people there. Kellen Finney: How do you get the right people to actually show up? RW Navis: I have 22,000 followers on LinkedIn, all from cannabis — I started that profile within the industry, and they're mostly C-level executives. No matter where we go, I have a strong following to invite, plus guest lists from previous events. I always ask sponsors who they want to attend, then make sure the word gets out to those people. When we periodically send the guest list out, people see who's on it and decide they want to be part of it. Bryan Fields: Do you have any success stories of two parties meeting at an event and doing business together? RW Navis: One that comes to mind immediately is Greenfield Cannabis being sold to STIIZY and Shryne Group — the introductions happened at a series of my events. Leaf Holdings taking over Iconic Brands also happened at my events. There have been many executives who found positions through these events too. Kellen Finney: Who do you think would benefit from these events who isn't currently attending? RW Navis: Companies in different areas — for example, in Arizona there are a couple of companies I'm just being introduced to now who really should be attending. Anybody going nationwide in cannabis should be considering attending, or sponsoring. We'll invite most companies to send one or two people, then eventually ask them to sponsor if they want to bring more, like their whole sales team. Bryan Fields: What's the biggest pushback you get — is it capital, or something else? RW Navis: I don't really get much pushback, other than people simply not knowing about it. Once people come, they enjoy it. In West Hollywood, we go to a restaurant called EP & LP with a rooftop overlooking the Hollywood Hills, Beverly Hills, and West Hollywood, and around nine we head to Petit Ermitage, where everyone stays overnight at a preferred rate — it's an exotic spot where just about anything happens on the rooftop. At one of our events there, Woody Harrelson — who's a big cannabis guy and owns a dispensary called The Woods — was having his birthday party, and once he found out who we were, our event basically merged with his birthday party. Kellen Finney: How do you cap attendance? RW Navis: It's really an art — I adjust it by the number of reminder emails I send. If it looks like we're getting too crowded, I stop sending reminders, and there might be three days before the event where people are still asking if there's room. At the larger events, we try to keep it between 100 and 125 — a size where you can still see everybody in the room. Beyond that, you can't possibly meet everyone. Bryan Fields: It sounds like it's a balanced art — understanding the players, the conversations, the location, the goal. And if you don't get an email close to the event, RW doesn't really want you there. RW Navis: [laughs] It's more about protecting the sponsors — once you're on the list, you're on the list. We're aware of the general mood in the cannabis industry, which I'd say is lukewarm — but new markets like New York and New Jersey are doing quite well, they're just getting started, and there are pockets in California doing well too. I'm actually quite busy with executive recruiting in California because there are a handful of players doing very well. Kellen Finney: What's the most expensive lesson you've learned — at the events or in recruiting? RW Navis: I'd say running an event in New York — I want a close relationship with the people I work with, where they want us there, not where we're treated like they're doing us a favor. That event cost $25,000 to put on, just a three-hour happy hour. I learned the hard way about negotiating contracts directly with restaurants and venues. Bryan Fields: Good old New York for you. Kellen Finney: If you could have a smoking session with three people, alive or dead, who would they be? RW Navis: I always love Emily Blunt — I'd love to have some cannabis and talk to her sometime. Everyone raves on this next guy, but everyone I've met who's spent time with him says he's the greatest guy in the world — Bill Clinton. I think it'd be entertaining to smoke with him. And I once drove Pimm Fox, who has a show on Bloomberg, from Santa Barbara to San Jose — five hours in the car talking about everything, including the Clintons. He asked me to imagine never having stopped for a red light in 25 years, and what I'd be like — that kind of summed it up. Bryan Fields: For the record, I'd like to never stop at a red light again either. I saw something similar the other day in LA — the whole freeway was jammed because of what I believe was the VP's motorcade heading to an airport. It shut down the freeway for a few minutes, and Angelenos were not happy. RW Navis: Yeah, not great — that's a real problem. Bryan Fields: When you got started in your cannabis journey, what did you get right, and what did you get wrong? RW Navis: What I got right was recognizing that people didn't understand the difference between staffing and executive recruiting — I was absolutely right about that, and I've gradually educated the market to the point where we're solidly busy. Most people in the executive recruiting world were afraid to jump into cannabis because it's not federally legal. What I got wrong, or didn't expect, was assuming everyone in cannabis was liberal and progressive — that's definitely not the case. Many owners of cannabis companies are actually Republicans, and are very solid, successful business people from other industries. I think it's important to service your client and respect people for what they've accomplished, regardless of politics. Bryan Fields: People often assume the industry is full of companies and individuals making a ton of money — the "green rush" — but that's not really true either. RW Navis: Right — there are people who've done very well, but they've typically been in it a long time; the quick-money rush-in crowd generally hasn't gotten the ROI back. Bryan Fields: Prediction time. Considering your experience connecting C-suite executives and founders in cannabis, how do you see the leadership landscape evolving over the next decade, and what qualities will be most vital for future leaders? RW Navis: I think successful executives will need a solid finance background — raising capital is very difficult right now, so being good at it defines winners and losers, along with being a good steward of that capital. I also think the industry needs to move away from knee-jerk reactions when someone underperforms, and instead have a real conversation about deliverables and give people some runway. I placed a very high-level head of sales once, and the CEO wanted to fire him after 30 days. I convinced them to give him more time — he ended up bringing in $30 million in revenue over about a year and a half and made the company. I think executives should hire the right person and then give them a chance to succeed, even under financial and investor pressure. Kellen Finney: That's great advice. I'd add grit — the industry will stay challenging for probably the next five years until the playing field levels out with normal business tools like loans and banking access. You'll be managing a ton of unknowns, raising capital in a tough market, unable to write off normal expenses, while selling a federally Schedule I product. Bryan Fields: I agree, and I'd add understanding efficiency numbers — locking in the internal operational variables you can control lets you make sound financial decisions, which matters even more as capital dries up. RW Navis: Agreed. I actually have a little more optimism about the industry — people don't realize how quickly things can turn around. The last big downturn was around late 2019 into early 2020, dead for three or four months, but I don't see that repeating because there's so much action in new markets. And with safe banking, rescheduling, or legalization — even just the speculation of it — that could suddenly fuel California again, even as some of today's hot markets cool off. Bryan Fields: That's a great note to end on. RW, for our listeners who want to learn more about The Canna Pac or attend an event, where can they find you? RW Navis: They can find me on LinkedIn as RW Navis, my website is rwnavis.com, and the events website is cannapac.com — C-A-N-N-A-P-A-C dot com. Just reach out and let me know how you want to get involved. Bryan Fields: Awesome, we'll link it up in the show notes. This was a lot of fun. RW Navis: Good deal, enjoyed it.