“Understand That “Hockey Stick” Growth Doesn’t Mean Easy Success” With Diane Czarkowski

‍I had the pleasure of interviewing Diane Czarkowski. She is a Founding Partner of Canna Advisors. Canna Advisors is known for building the industry as entrepreneurs, investors, and advocates. They are ranked the #1 consulting firm in the cannabis industry (by Cannabis Business Executive) and received the National Cannabis Industry Association’s Industry Excellence Award (2018). Diane has been awarded several distinctions including Top 10 Cannabis Entrepreneurs of 2018 (Herb Magazine), Most Important Women in Cannabis 2016 and 2017 (Cannabis Business Executive), and Arcview Outstanding Member Award (2016).
Thank you so much for doing this with us! What is your “backstory”? How did you first get into this business or get interested in the business?
Igot involved in the cannabis industry first as an entrepreneur in 2009. My husband Jay and I had a real estate development business in Boulder, Colorado, and were downsizing due to the difficulties in the real estate market. We were already comfortable with cannabis and were just learning of its incredible medical benefits. We realized this would be an opportunity for us to combine our business background and our desire to do something that would truly help people. Instead of shutting down our office, we turned it into a dispensary. Back then, there was very little information or support for people seeking treatment with cannabis and our dispensary was focused on education and customer service from the beginning. We had customers who would drive hours to see us. To some, we were their only line of support — the only place they could openly share how cannabis was helping them. Within 4 months of opening, we were awarded “Best of Boulder” by our community. A few months after we opened our dispensary, we built out our first cultivation operation and eventually became one of the first state-licensed vertically integrated businesses. We sold that business in 2012 and in early 2013 officially launched our consulting firm Canna Advisors to help other businesses get into the industry.
Can you share the funniest or most interesting story that happened to you since you started your company
There are so many crazy stories to be told! We often joke that you measure years in the cannabis industry like dog years — there is so much going on, what happens in the course of one year is like seven years in any other industry!
Many of my favorite stories are just about what it was like to try to do business before regulations. Before there was testing, or packaging and labeling requirements, vendors would bring us the craziest things to sell. We had one vendor, in particular, who would bring his products to us in various forms. One day, he brought in a tray of infused chocolates fresh out of the oven. They were literally still on the tray he had made them on and unfortunately, they weren’t packaged or labeled. We had no idea of the potency of these chocolates, so we had to tell him to please come back with the chocolates individually packaged and some sort of label to give people a clue as to how potent they were! I’m so glad we have testing now and packaging and labeling regulations to follow. I know a lot of people hate all of the regulations, but they are also necessary.

What do you think makes your company stand out? Can you share a story?
One of the things that I’m really proud of is our company culture. Everyone here is truly passionate about advancing the cannabis industry and giving access to patients and adults who wish to use it.
While people often first think of Jay or myself, the Canna Advisors bench strength is remarkable and unique. Over the past five years, we have attracted top talent from inside and outside the industry who have interesting and diverse backgrounds that contribute to making our company stand out. You’ll find team members with degrees ranging from evolutionary biology to law to engineering, economics, and operations management along with direct experience in cultivation and dispensary management and building multi-million dollar world-class production facilities.
Because of this deep and broad knowledge and experience that our team delivers, our clients have said they have learned more by spending three days with the Canna Advisors team than in months of research on their own.
We had a California client recently who reached out to us to help him with a competitive application process at the local level. My team was able to work with the client to submit a stellar application. Not only did this client win one of the 4 licenses in the community, but they earned the top score and their application was used as a rubric to score the other applications. My team works so hard to tell the unique story of each client and I’m very proud of this accomplishment.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
My first and most influential mentor is my mother. She immigrated to the United States during WWII. She taught me about perseverance, the importance of gratitude and most of all, to be kind. I have also been fortunate to have had great business mentors my entire life. When I got involved in the cannabis industry, there was a small group of women who would get together once a month for breakfast. We were like a support group for one another. Over the years, we had all experienced trials and tribulations and it was so important to have one another. No matter what happened, we remained vigilant that we were doing the right thing — that this was too important to walk away from. We were a family of sorts. A victory for one was a victory for all. And if something serious happened to one of us, we all felt it because we knew that any day, we could be next. I still feel the same way today. That group carried me through some challenging times and I will always be grateful for their continued support! Finally, the success we’ve had in the cannabis industry could not have occurred without the vision and support of my husband, Jay. He is my partner in life and in business, and together we truly are better than apart. As my son says, “we are like two sides of the same coin.” We have much different perspectives and collectively we make a great team.
Are you working on any exciting projects now?
Absolutely! Every day is exciting! Working with our clients in brand new cannabis markets is always interesting. There have been so many stories they have shared of what motivated them to become pioneers in the cannabis industry. Many have had family who could have benefited from using cannabis or see this as an opportunity to make a positive change in their communities. Right now we are working with clients in various stages of business. I am excited to see the progression of one group that we’ve been working with in Ohio. The women-led cultivation team worked with us to submit an application for a license and was awarded one of the few for the entire state. Now we are working with them to build out their facility. Just recently we have retained clients in Missouri and Oklahoma in anticipation of the medical programs that will roll out in those states. We don’t even know what the regulations will be, but we are excited to get started in the planning!
Can you share 3 things that most excite you about the Cannabis industry? Can you share 3 things that most concern you?
Three things that excite me:

1. We have a chance to build a brand new industry from the ground up. Many of my business associates are very committed to making this a different kind of industry, rooted in advocacy, social justice, and inclusion. We certainly emphasize the importance of this commitment to our clients so as new markets open, we will have a positive national impact with this mindset.
2. I’m seeing the awareness about cannabis and its long history of use on this planet spread. For so long, people have been misinformed about cannabis and how beneficial it is. As pioneers in this industry, we have accepted that it is our responsibility to educate and inform people about cannabis. Some day, people will be able to have access to cannabis independently of their zip code.
3. Research and innovation — I have been able to witness so many great advancements in the industry in the nine years that I’ve been involved. As early entrepreneurs in the industry and as an early lifetime member of The Arcview Group, I have been amazed at the technology that has developed in extraction, cultivation, and testing. I have seen wonderful advancements in the research that is being done as well. Once federal prohibition goes away, so much more research will be able to occur and we will discover even more benefits of this incredible plant.

Concerns:

1. I am concerned that our workforce will lose its diversity. I have been very proud of the fact that, as of a few years ago, the cannabis industry achieved 36% women in leadership roles. But today, we have already seen a reduction in that percentage and are just a little above the average for other industries now. Perhaps this is indicative of outside investment coming into the industry and the size of the organizations? I’m not sure, but I do hope we can make it more inclusive for everyone.
2. Another big concern I have is that the people who suffered criminalization and who paved the way for this industry will be left out or squeezed out. In fact, it’s already happening, so I am focused on changing that. We are seeing movement for having expungements given to those with possession charges in states where legalization has occurred. In places like Oakland, there are licenses being awarded specifically to those who have had cannabis convictions, but so much more needs to be done to reverse the wide-spread negative effects of prohibition.
3. I am concerned about having people with ill intentions try to take advantage of others who are so excited about getting involved in this industry. There is a lot of money coming into the industry and many people don’t have a clear understanding of the complexity of the regulated cannabis industry. It is different in each of the 30+ states that currently have some form of legalization, and if you don’t know the rules, you could be taking an unnecessary risk.

Can you share your top “5 things you need to know in order to succeed in the Cannabis industry”? Please share a story or example for each.

1. Know that the industry constants are change and complexity.

Because cannabis is still illegal federally, each state that has some form of legalization has developed their own set of regulations. What works in one state may not work in another. Furthermore, once those regulations are developed, they will constantly be refined and more detail will be added. In Colorado, for example, which is considered a mature market, there are dozens of bills passed each year to further define and modify existing regulations.
2. Spend time to understand where your own strengths apply to the industry.
As a new industry, we are creating new jobs that haven’t existed before. We encourage our clients to evaluate the skills they have mastered in other industries to see if they can apply them to cannabis. For example, we have a client in Pennsylvania who has a business that uses integrative medical practices such as chiropractic, acupuncture and physical therapy to help people rehabilitate a broad spectrum of disorders and ailments. Entering into the cannabis industry as a dispensary owner compliments the services he is already offering his clients.
We have another client in Florida who is using his background in alcohol distribution to go after a vertically integrated business that includes cultivation, manufacturing and dispensaries.
Another client is one of the largest soybean farmers and decided to seek a license to cultivate cannabis.
3. Know your risk tolerance
You must gauge your comfort level with operating a business that touches or does not touch the cannabis plant. Companies that possess, manufacture, or distribute cannabis face risks due to the uncertainty of how our federal government will react to state laws, either respecting them or taking a harder line with federal enforcement. There are also state-law compliance obligations that are not generally faced by ancillary businesses (the “picks and shovels” of the industry), so you must decide how comfortable you are with the risks involved in running plant-touching enterprises.
4. Understand that the “hockey stick” growth doesn’t mean easy success
While the cannabis industry has become one of the fastest growing business sectors in the U.S. in just a few short years, we’ve already seen some remarkable business failures. Even the savviest investors and entrepreneurs need a crash course as they enter the cannabis industry. Understanding these complexities and nuances helps you navigate smoothly in business planning, execution, and capital infusion considerations.The most successful businesses, entrepreneurs, and investors take the long view — they think well beyond the heady start-up phase and hockey-stick/exponential growth into the macro-level trends.
5. You have an opportunity — and responsibility — to embrace an active role in educating and advocating for the plant and the industry.
We have to keep educating people about the truth. There are many people who don’t know the history or medical benefits of cannabis and have been fed misleading propaganda for a long time. I have found that knowing the history and facts surrounding the plant itself is an important tool for opening minds and “re-educating” people. When people understand the history, they understand the benefits the plant can bring as well as the harms that have occurred from our outdated policies. Advocacy is just as much about education as it is reform, and we can’t get complacent. There have been strides forward, and momentum is building, but there’s still so much to do to abolish prohibition and begin to repair decades of harm that has been done.

In our experience when people are passionate about what they do they are more successful. Where does you cannabis passion come from?
When I realized the injustice that has been done by not providing access to something that has so many medical and wellness benefits, it fueled me to help people get legal access. As I began to recognize the catastrophic effect the War on Drugs has had on families and especially people of color, it further fueled my desire to not only legalize cannabis, but to have reparations for those who were convicted of nonviolent, drug-related crimes. These two focuses alone will make a positive change in people’s lives. I feel very fortunate to be involved in this time of change.
Where do you see your business going in the next 5 years? Where do you see the cannabis industry going in the next 5 years?
Our business has changed so much from when we started. In the beginning, it was just my husband Jay and I. As we added people to our team, our experiences and talents have made our knowledge base so much broader and deeper. Today we have over 100+ years of regulated cannabis industry experience, and there are backgrounds in other areas that add to the richness of our team. Some have science backgrounds, some have consulting and construction backgrounds. Everyone brings a unique perspective to our development.
I already see our work and focus expanding and shifting as the industry does. For example, most of our work in the past has been license application work and helping clients win competitive licenses. Now, as the industry matures, we are shifting to guide our clients through the next phases — to starting and opening their businesses to growing into other markets or planning their eventual exit strategy. For our business, it will be a similar evolution. We will continue to expand our services. I can see us working more internationally as the world markets begin to develop. I would love to get more involved with hemp and bring more environmentally friendly products to market. There are so many things that can be made with hemp including fuel, plastics, building products, fabrics…and it is very interesting to see its many uses.
I am often asked where I see the cannabis industry going in the next five years and am always cautious to give an answer. We have seen so many unexpected shifts and changes in the last five years. I believe we will see federal legalization. I hope that every state will have some form of regulated program in place. I see more specialized businesses and national brands developing. Finally, I see more innovation and products based on findings from research and scientific discoveries. In particular, as a medicine, more targeted and specific treatments for different conditions.
Are you able to identify any rising stars at your company or in your industry that people need to keep an eye on?
It sounds cliche, but everyone is a rising star. Part of our culture is to empower everyone to grow and expand their role here. We feature everyone on our website with not only their relevant business background but also their personal interests. Being around all of these inspiring people with diverse backgrounds feels like we live in a ”think tank.” We bring out the best in each other. I think our entire team has the ability to make a lasting mark in the world.
What growth sectors should most people be paying attention to that they might not be currently?
Rather than focus on a particular growth sector, people should be paying more attention to the development in brand. If you are one of 300 dispensaries or product manufacturers or cultivators, your brand identity is going to distinguish you from the competition. As an example of this, there are more low-dose and micro-dose offerings now. More products are moving away from strain associations and more around mood or activity. People will seek out your brand and become loyal customers.
Some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US whom you would love to have a private breakfast or lunch with, and why? He or she might see this. 🙂
I’d actually love to have lunch with three women that I admire very much. The first is Arianna Huffington. I appreciate her journey so far. Time lists her as one of the world’s one hundred most influential people and Forbes ranks her one of the 100 most powerful women in the world. The things she has accomplished are inspiring to me. I’m currently reading The Code of the Extraordinary Mind and she is interviewed in it. She talks about her daily routine and how she incorporates meditation, movement, gratitude and setting an intention for the day. I have adopted this practice and it has had such a positive effect how I start my day. Some of her experiences have opened my mind to achievements I want to make in my future.
The second person at our lunch table would be Elizabeth Warren. I had the opportunity to meet her at the National Cannabis Industry Association’s annual Lobby Days in 2017, and I was impressed and inspired by her focus on cannabis and on women in leadership positions. I gave her a copy of the “Grass Ceiling” book that I’m featured in, and we talked about the role and percentage of women in the cannabis industry. She gave me a challenge to increase that presence. I’d love to keep in touch with her to further that objective.
Robin Wright would be my third guest. I have enjoyed all of the many of the films she’s been in, as well as her roles as director, producer and lead actor in House of Cards. I love the dynamic, yet twisted relationship between Claire and Francis. They are a couple that are truly at their best (at being deviant) together. I would love to first thank her for always portraying strong female roles and for demanding equal pay for her role as Claire. Her involvement as an activist is inspiring as well.
If I could have lunch with all three of these women at once, I would be ecstatic! Can you imagine?! I’m happy to pick up the bill at their location of choice!
This was very inspiring. Thank you so much for joining us!‍