By Dan Mitchell
High-caliber business professionals are deciding now is the time to jump into cannabis.
The latest is the dean of Sonoma State University’s School of Business and Economics and founder of the university’s Wine Business Institute, William Silver.
Silver is leaving his academic post of 10 years to become CEO of CannaCraft, a fast-growing cannabis cultivation and manufacturing company in Santa Rosa, Calif.
It’s an unusual hire for an unusual company. CannaCraft’s revenues and its reputation have grown steadily over the past several years, even after a July 2016 raid on the company’s headquarters by Santa Rosa police and federal agents. They were reportedly acting on a tip that the company was illegally using butane to extract cannabis oil from plants. No butane was found, but millions of dollars in cash, inventory, and equipment were seized. Dennis Hunter, who co-founded the company with Ned Fussell, was arrested. (Hunter had earlier served several years in prison for growing cannabis). Negotiations for a civil settlement based on building-code violations are ongoing, according to the company.
Despite this, CannaCraft claims revenues have doubled every year over its three-year existence (reportedly now at $50 million a year), and its products are highly regarded. The best-known include the AbsoluteXtracts line of cannabis oils; Care By Design, a line of CBD-based medicines; and Satori Chocolates. Hiring Silver, who has relationships throughout the Sonoma County area, might help the company shore up its reputation locally.
“Sonoma County has been very supportive of CannaCraft and vice versa,” Hunter said. “And we look forward to deepening those relationships by leveraging Bill’s deep ties and involvement throughout our community.”
Silver spent nearly a decade in the administration of the University of Denver before coming to California. He co-wrote a business-oriented self-help book called “The Way of Zing“. Over the last year of his stint at Sonoma State, he advised the university on a series of cannabis-business seminars it organized.
This interview was conducted over email. It has been edited for clarity.
GS: This job will be a radical change for you. What made you want to take the leap from academia to management? And why did you choose CannaCraft in particular?
WS: After nearly 10 years, we had accomplished what I set out to do. We built the Wine Business Institute into the global leader in wine business education and research, and the School of Business and Economics into the educational nucleus of a thriving North Bay economy. I was a builder, an educational entrepreneur who brought in new ideas about how to build and lead educational enterprises. It was time to step aside and bring in someone who could now grow the School further in ways that support the broader mission of the University.
In becoming the CEO of Cannacraft, I have been given an opportunity to be like Eric Schmidt, coming in to take over Google in 2001 from founders Larry Page and Sergey Brin. This company could be called “CannaGoogle” – it is the market leader in the industry. I have two amazing founders who pioneered the legal cannabis industry through innovation and responsible cultivation and manufacturing practices. It is a transformative time in the industry. For someone who worked in and with businesses across many industries throughout his career, it is a once-in-a-lifetime opportunity to be there at the inflection point of acceleration and growth. Simply put, I want to put into practice what I have taught students for years about leadership. I want to help the founders take CannaCraft to the next stage.
While you have lots of leadership experience, and management is your field of study, you’ve never managed a private business. What do you think the drawbacks and benefits of this might be in your new job?
Education is a business, with many similarities to the cannabis industry. In education, we are creating memorable and transformational experiences for our students. The best cannabis companies do the same thing for their patients and customers. In my career, I have been a leader in three different university divisions. The largest was private and had 240 employees and around $70 million in revenue. I have also worked with the executives for dozens of client companies across a variety of industries — health care, technology, hospitality, wine. Each industry, organization, and leader with which I have worked has added to the tools and knowledge I bring to CannaCraft.
You wrote book called “The Way of Zing.” Tell us how it might apply its principles to running a cannabis business.
Zing is the radiant energy of human vitality; when everything in your life feels in unquestionable congruence. The Way of Zing is a story about aligning your work and your life. It is a story about discovering what really matters to you, and the people you care about most. It is a story of your living a life of purpose and relevance, where what the world needs from you is in congruence with who you are.
I met with the executive team at CannaCraft for the first time this week. I asked them to imagine working for an organization where everyone finds meaning in his/her work, is highly engaged and committed to the quadruple bottom line of people, planet, prosperity and progress. Where the potential of everyone is unleashed through Human Energy Management, as individual passions and purpose are connected to organizational mission and goals. This is an organization full of Zing. This is CannaCraft.
Wine and cannabis are geographically and economically tied together, for both good and ill. Can you characterize the relationship between the two industries and what you think that relationship will be like in, say, five years?
I think the relationship between the two industries is very complimentary, especially when you consider the synergistic economic impact of the value chain for both industries. For example, both industries have a strong ethic around sustainable business practices, leading to advances in agricultural technology, and organic farming. Both industries have a common practice of sharing best practices among neighbors and friends. When you discover something that creates a beautiful flower or cluster of grapes, you tell everyone about it – you don’t protect it as a trade secret. When you need help, you run to your neighbor and get their advice. A final similarity is that both industries are very philanthropic and community centered. For example, after the fires, CannaCraft offered up a large space to serve as the headquarters for the Red Cross. Growers of grapes and growers of cannabis contributed millions of dollars to disaster relief efforts.
I think there will be more similarities between the industries over time as the cannabis industry figures out how to do direct consumer sales and marketing.
What are the major lessons that the cannabis industry should take from the wine industry?
I think the key lesson is that over-regulation and over-taxation makes companies less competitive and actually hurts the consumer by restricting choice, and impeding economic prosperity.
Where do you see the cannabis business, particularly in California, going over the next 5 years or so? For instance, do you worry about consolidation, or big companies dominating the market?
I think we can look to the wine business again for some insight into what will happen. The wine industry isn’t really one industry, but actually three industries or varying sizes. Less than 1 percent of all wineries in the US are large (greater than 500,000 cases). Another 3 percent are between 50,000 and 499,999 cases). The vast majority, over 9,000 are small wineries. In a heathy business climate, there will always be a place for the small, high quality cannabis growers and producers.