Six years ago, Advanced Nutrients’ CEO Michael “BigMike” Straumietis penned a cautionary article in the hydroponics-centric publication Rosebud Magazine. “What are you doing right now to ensure survival when the big boys come in?” he posed.
BigMike likes to describe big businesses entering the legal cannabis space as a pack of wolves, all different sizes, behind a 10-foot-high fence. A few of those wolves have jumped the fence. They’re out there conducting business, buying up companies, and trying to get ahead of the curve. The others are sitting there, waiting for the gate to open up legally. When it does, they’re going to walk through and pounce.
“It’s called a roll-up,” BigMike tells MERRY JANE. “They’ll start buying out people left, right, and center. As a community, we can say what we want. But, if someone’s coming to you and they’re holding a big fat check, it’s hard to look to the future and realize it’s actually a small check they’re offering. The bigger check is further down the road,” he advises.
BigMike knows a thing or two about the so-called green rush and fast-growing cannabis economy at large. Since 1983, he’s worked hard to make a name for himself in the space. After years of operating in the black market, BigMike took $25,000 earned from an illegal grow he was working on in California, relocated to Canada with a fake passport, and built a 200-person growing and trafficking organization. Years later, he (legally) founded his hydroponic fertilizer company Advanced Nutrients, which has since become a leading brand in the industry, with clients in over 90 countries and revenue that tops $90 million. BigMike’s been preparing for the green rush, and thinks it’d be foolish for others to ignore it. He offered MERRY JANE these nine important lessons he’s learned about how to stay afloat and thrive when mega-companies are entering the cannabis game at an ever-increasing clip.
“One of the challenges our industry faces is that we’re so busy fighting each other. We need to come together as a unified voice, and stay together. Focus on the big picture now, and the minutia later. If we stay divided, we’re going to get conquered. CEO of Scotts Miracle-Gro James Hagedorn, compares business to war: ‘Today, the way wars happen, you don’t get to keep all the stuff. To me, this is one where in commercial combat you kind of rape and pillage, and you keep all of the stuff.’ You have to be prepared. I’ve created a purpose-built marketing machine that is like an iron curtain around this industry. Our community has a huge advantage in that we understand this marketplace better than anyone else. Other companies think they can run roughshod over us, and think we’re going to be an easy target. But the fact is, when they do that, they're not respecting our community. They’re getting it wrong and their sales [will] suffer. Now, these big corporations are not stupid. They’re going to figure it out, so we have a three to five year advantage over them right now. I would hate to see us as a community throw that opportunity away.”
Learn From Your Competitors’ Strengths
“Don’t look at what they’re doing wrong and laugh,” says BigMike. “That’s the wrong attitude. Look at what they’re doing right and then see if you can do it. Put your twist on it and take it to the next level.”
Understand Business and Marketing
“I used to give out a marketing newsletter for free, every single month. I found only 20 percent of store owners were reading it. I eventually stopped. But, I’m going to put the information back online so people can learn. Lately, many store owners I’ve done business with ask, ‘BigMike, what do I do?’ For seven years, I explained strategy in that newsletter. If they had followed my advice, they would be in a much stronger position today. You have to do your homework. Study. Take marketing courses. Attend a mastermind group. Go to seminars. Even today, I study two to three hours everyday to keep up with our industry.”
Shift Your Perspective
“You have to think differently. Before, growers were able to make a lot of money because there was a black market. They assumed the risk others weren’t willing to take, which was jail time. Because of that, they prospered. But now, as we enter into a legal environment, there are very smart people getting involved. People with grow ops have Harvard MBAs. They know business. They know finance. They know the intricacies of what a strong management team should look like, how they should act, and what they should be doing. If you don’t understand that, these multinationals will eat you alive. If you have a company, you may want to consider selling part of your business to someone who knows what they are doing, someone who can assist you. That may be one way to do it. People are hungry out there and it doesn't have to be an all-or-nothing deal.”
Use Social Media
“You want to be strong on social media. If it comes between BigMike giving an interview or someone else with a weaker reach and you’re CNN, you’ll most likely choose the person with millions of unique and engaged followers. Even if the other person is considered more of an expert in that field, they’re going to pick me because of ratings and TV rankings. Social media plays a big role in your ability to get your message out and to talk about what you’re doing. It’s a social media world now. Having a strong presence allows you to stick out in a decision maker’s mind. You have to realize, these decision makers don’t know anything about our industry. That’s why they’re calling us for interviews. They’re gravitating towards the person who’s going to give them the biggest bang for their buck.”
Build a Strong Team
“You have to have a strong management team. You have to have a really strong back office. If you don’t have those things in place, you’re going to suffer. It’s not just one person. It is the team that wins. If you think you can do it by yourself, you will fail.”
Be the Dumbest Person in the Room
“Start hanging around people who are smarter than you and learn from them because that’s a hell of an opportunity to grow. In my case, I hang around other business people who are extremely successful and I listen to what they say. I ask them questions. I find that people are willing to help. Oftentimes, these are people outside of our community. Don’t be myopic and only look inside our community. Go outside of it, and you’ll find resources. Seek out business men and women who have been where you’ve already been and ask them well thought-out questions. A good mentor will help you with all aspects of life—personal and professional. Oftentimes, a person’s relationship with money has been skewed. You have to get your head straight. A lot of what happens in business, 90 percent, is in our own head and you can get in your own way.”
Find Your Niche
“I’ve been offered many opportunities in many different areas of cannabis and I’ve said no to a lot of them. I learned that from a surfer, actually. I asked, ‘Why didn't you take that wave?’ He said, ‘That was not a good one. You have to remember out here you only have so much energy. The waves you don’t take are just as important as the waves you ride.’ Don’t be afraid to say no.
Also, specialize. I’m a fertilizer guy. That’s my niche. I was in the equipment industry for a while and I decided to get out of it because it was taking too much time and resources away from my core competency. Consider one aspect of this industry. You may be an inch wide but a mile deep. That works extremely well. Manage your energy. It’s a resource and you only have so much bandwidth.”
Adapt to Change
Years ago, I had a great product and great marketing, but my back office was weak. For a little while, I was still able to grow. Then we hit 50 million, and things got shaky. I saw that and we did a culture change. We systemized the business. Unfortunately, some people get stuck in old ways. You give them an opportunity to change, to ride the wave, but they don’t like it. What they don’t realize is that everyday this planet is changing, our lives are changing, technology is moving forward. If you are not moving forward, you will die a slow death, and put yourself out of business. You have to be able to make the necessary changes a business needs. Some of them are really uncomfortable. It’s transitioning from a black market into a legitimate marketplace and with that comes very smart and strategic thinking. Big corporations are great at strategic thinking, looking two, three, four moves ahead. I can’t tell you how many times I’ve dealt with people who just want to play video games all day and get high. They won’t engage their clients, their growers that come in their stores. You can’t run a business like that, especially today.”
For more information on Advanced Nutrients, visit their website here.