I had the pleasure of interviewing Pankaj Talwar.
Pankaj Talwar is the Chief Executive Officer at Copperstate Farms, a vertically integrated Arizona cannabis company with one of the largest indoor cultivation facilities in North America at 40 acres under glass. Pankaj has further expanded the company’s portfolio through the development of strategic licensing partnerships, the launch of dispensary retail brand Sol Flower and new infused-product suites including Good Things Coming. Pankaj has extensive experience in consumer- packaged goods (CPG) starting his career with Procter & Gamble and serving as CMO at two multi-billion corporations. He received his MBA from Harvard Business School and his Mechanical Engineering degree from Cornell University.
Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
For my backstory, it is most instructive to start at the beginning to fully understand how I am wired. My parents immigrated from Punjab, India to the United States in 1969 with literally $250 in their pockets. From these meager beginnings, they worked very hard to create a lower middle-class life for me and my sisters that forged who we are today. In many ways, we are a product of the classic American dream. Watching my parents work so hard and sacrifice so much has instilled in me a hard work ethic and deep drive for achievement.
My entree into the cannabis industry was driven by my passion for building iconic brands and scaling consumer driven organizations. I wanted to bring this same approach to the rapidly evolving cannabis industry. Cannabis has a tremendous growth trajectory. The state-by-state regulations are creating many small companies which over time will lead to robust M&A and consolidation for an extended period of time. Frankly, there is no better industry to be in than cannabis right now.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
My first job after college was with Procter & Gamble. I was a Project Engineer for the Mehoopany Paper Plant located in northeastern Pennsylvania, near Scranton, PA. The P&G Mehoopany Plant was located in a valley down a steep hill and in winters, snowstorms could make traveling back up the hill treacherous. My first car was a Saturn sedan which did not fare well during heavy snowstorms. So as a young project engineer on a Friday afternoon, I found myself unable to get back up the hill after a particularly heavy snowstorm. One of the finished products from this facility was Bounty paper towels. I found several extended rolls of Bounty paper towels that had not been sliced into packaging to use as bedding and spent the night at the facility in a conference room till the snowplows had cleared the roads by the next morning.
That taught me the invaluable lesson of being continually open to change and not resistant to any set of dogma or pre-conditions. I realized my hard work ethic put blinders on regarding how the external environment may change my plans for the day and as well as my desire to fulfill my duty to the company. Case in point, I may have been one of only a handful of employees who found themselves stuck overnight out of an employee base of 2,000 who worked at that facility.
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?
There are two individuals I want to point out. The first and foremost is my father, Kashmiri Talwar. He has taught me the power of hard work, positivity, patience, and love. My father was a young child during Partition when India was divided into two by the British government and Pakistan was created. This led to my father leaving Pakistan and becoming a refugee in India with his mother and five brothers. To say that life was hard would be an understatement. I am here standing on his shoulders of success and perseverance.
From a leadership perspective, I owe a great deal to Pete Rollins. I reported into Pete during formative years of my career when I worked at Bimbo Bakeries. Pete was a graduate of the Naval Academy and an HBS graduate. During our six years of working together where I reported into Pete, he instilled in me my overall leadership principles and frameworks that I use very much today. He had a passion for results, people, and making a difference. Many of his direct reports would say, and he would agree, that he was not the easiest person to report in to. However, his intensity about results and people all made us have immense respect for him as a leader.
Extensive research suggests that “purpose driven businesses” are more successful in many areas. When your company started, what was its vision, what was its purpose?
When we started our retail dispensary business, Sol Flower, we wanted to build a different kind of retail experience for our employees and customers than the traditional cannabis experience found in many dispensaries.
At Sol Flower, our Mission is to Live Life to the Fullest. And we believe that the healing power of cannabis can help people to truly Live with Sol.
We started Sol Flower with the intention of bringing people together, from the general public to the cannabis connoisseurs. We endeavor to create a safe and welcoming space where people can learn and educate themselves about the many facets of cannabis. Sol Flower is a community space and medical marijuana dispensary that empowers wellness for all. We encourage our local and cannabis community to come together and to Live Life to the Fullest. Live with Sol.
Thank you for all that. Let’s now turn to the main focus of our discussion. Can you share with our readers a story from your own experience about how you lead your team during uncertain or difficult times?
In March of 2020, as the coronavirus pandemic was starting to shut down large swaths of the global economy and many sectors in the US, at Copperstate Farms, the future was very murky at best. You see, 95% of Copperstate’s work force cannot work virtually. We are fortunate that cannabis is considered an essential service by the state of Arizona as well as by the vast majority of the states where medical and recreational marijuana had already been legislated.
Over 75% of our workforce works at the Farm in Snowflake and as you can imagine, one cannot grow crops virtually. It requires direct, hands-on involvement to cultivate, nurture, harvest, and process our plants. Approximately another 20% of our workforce is involved in our retail dispensaries, Sol Flower. Furthermore, the lack of appropriate banking support in cannabis due the current outdated federal regulations regarding cannabis, make the majority of transactions for cannabis an in-person experience requiring cash. As you would imagine, this requires our patient advocates to work on-site.
The disaster scenario we faced was needing to quarantine large swatches of folks at the Farm which would result in having to intentionally destroy crops if our labor force was required to stay home and/or quarantine large parts of our dispensary operations which would essentially shut down the retail operations for a period of time. Any of these situations would have resulted in a fairly sizable loss of revenues and cash flow at a critical time period for the company. Any large-scale loss in revenues would have been a devastating outcome for the business.
All the credit for navigating these very turbulent times needs to go to my leadership team and my employees. We communicated ceaselessly like a drumbeat and found innovative ways to deal with employees concerns and issues. We allowed the leaders and managers from each arena to have the ability to continuously evolve and adapt to the latest issues, news, and/or situations that was cropping up on a daily and in some circumstances, hourly basis.
I am so proud of the team and what was accomplished during this time period. Not only did we survive the challenges that were thrust upon us, but the company thrived in our financial results. Our best quarter in the company’s four-year history both from a revenue and EBITDA perspective was Q2 of 2020.
Did you ever consider giving up? Where did you get the motivation to continue through your challenges? What sustains your drive?
Never once did I ever consider giving up, it simply is not in my DNA. My father and mother never gave up as they moved half a world away leaving behind all of their family and friends to start a new life in the US with very limited means. Moreover, I feel an incredible responsibility to the four hundred employees at Copperstate Farms. I am very committed to doing everything in my power to enable the livelihood and families for the employees who work at our company. There is nothing else I need to sustain my drive.
What would you say is the most critical role of a leader during challenging times?
The most critical role for a leader during challenging times is frequent communication with a steady hand. Even if one is not clear on the right strategy and/or plan, I would argue that it is important to share the belief that “we will get through this and we will find a way”. Many people within the organization may be looking for signs of hope and optimism, so a leader’s words during these times can be more important than one realizes and be a galvanizing force of reassurance. We will find a way.
When the future seems so uncertain, what is the best way to boost morale? What can a leader do to inspire, motivate and engage their team?
Communicate, communicate, communicate. I found the best way to boost morale was communication with extreme transparency. No matter how bad the news, most employees would rather have the straight scoop unvarnished. Interestingly enough, there is a psychological benefit of knowing the true state of affairs rather than being left to one’s own imagination. When there is lack of clarity, it can create the potential for a far more desperate story to be created in one’s own mind than the actual reality of the current situation.
I do think Covid-19 has splintered many of the supporting functions and leadership team to virtual operations which has made it hard to do the normal team building events at restaurants, conference rooms, etc. We have tried a few virtual happy hours which has helped with morale, but we need to spend more time as an organization in finding ways to connect across virtually and from different physical settings.
What is the best way to communicate difficult news to one’s team and customers?
As stated previously, I believe transparency is essential, especially when delivering difficult news. Employees and customers appreciate honesty and a straightforward approach builds trust and loyalty.
How can a leader make plans when the future is so unpredictable?
As we have seen with 2020, it is impossible to predict what’s ahead, especially in the ever-evolving cannabis space. However, planning for the future is a crucial part of any leadership position. I find it’s important when setting goals to allow space for unexpected change. The ability to pivot and adapt to unforeseen circumstances is key to any successful business.
Is there a “number one principle” that can help guide a company through the ups and downs of turbulent times?
During Covid-19, there was a lot of anxiety and concern by our employees over a myriad of topics, including contracting the infection at work, the company’s financial stability, etc. My number one principle during this time was frequent communication and extreme transparency to my leadership team and every employee. We gained the trust of many of our employees during the pandemic even if our communication was not as clean or frequent as we aspired to.
Can you share 3 or 4 of the most common mistakes you have seen other businesses make during difficult times? What should one keep in mind to avoid that?
This is a difficult question for me to answer because any answer may suggest that our company was better or our leaders smarter than other companies. I would rather answer the question what common mistakes I have made in my current business or other businesses which I want to avoid in the future.
- Being overly fixated on the here and now, “the trees”, or overly fixated in long term planning, “the forest”. The best leaders have an ability to adjust the aperture from close in, to far away in the right amounts at the right time. My continual struggle is to ensure that I step back from the business enough to take a longer-term planning horizon than the here and now.
- Being overly fixated on the right strategy. There is a great quote from Peter Drucker that epitomizes this: “Culture eats strategy for breakfast”. I take this to mean that it does not matter how perfect your strategy is, if the right people are not nurturing the appropriate culture to execute the strategic plan, the project will fail.
- Not following cash flows closely enough. During turbulent times, cash is king so being able to measure, track, and understand the levers of cash flow is critical to keeping the lights on and salaries paid.
- Living with Talent that is a mediocre fit. It is very tempting to live with people issues when a company is growing fast, going through turbulent times, or experiencing a high degree of change. My greatest regrets in career have been taking too cautious of an approach with replacing talent that is not a great fit for a role or need in the company fast enough.
Generating new business, increasing your profits, or at least maintaining your financial stability can be challenging during good times, even more so during turbulent times. Can you share some of the strategies you use to keep forging ahead and not lose growth traction during a difficult economy?
It sounds simple but being mindful of company cash flow and diligently tracking financials is essential to keeping a business running during turbulent times. In addition, communication can make a big impact, projecting optimism through the ranks despite external concerns. By building a strong corporate culture that emphasizes community and teamwork, a business positions itself for success, regardless of a difficult economy.
Here is the primary question of our discussion. Based on your experience and success, what are the five most important things a business leader should do to lead effectively during uncertain and turbulent times? Please share a story or an example for each.
- Maintain an active dialogue and communicate with as many of your leaders as possible. Find as many forums as possible to engage with your people leaders and employees as you can — conference calls, virtual video conference calls, emails, newsletters, etc.
- Stay close to your head of Finance and follow your cash flows. Cash is king and maintaining as much cash on hand increases optionality and preserves short- and medium-term options.
- Double down on flawless execution to keep an EDGE — “Every Day Great Execution”.
- We are “we” and not “me”. Focus on Teamwork, Teamwork, Teamwork, to get through the turbulent waters.
- Be eternally optimistic and bring your positive energy and intent to each and every interaction. As leaders, our words and actions have greater impact than we ever realize.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
My favorite quote is attributed to Albert Einstein. “There are only two ways to live your life. One is as though nothing is a miracle. The other is as though everything is a miracle.”
This captures my eternal quest to find joy and wonder in the small things in life all around us. Given I have a work hard, play hard approach to most aspects of my life, this quote reminds me to take time to enjoy the journey and all the small miracles around me. Without this reminder, I can fall into a self-inflicted trap of driving too hard to fill my achievement bucket and not take time to smell the roses along the way.
How can our readers further follow your work?
Through following me on LinkedIn.