skip to Main Content
How CFOs Play a Key Role for Growing Cannabis Companies: Breaking down the Role

What exactly does a CFO do in a company and how does this person add value to your growing cannabis company? When does it make sense to bring on a CFO? These are all questions confronting many cannabis companies and, as the pandemic lifts and growth returns, they will become front-burner topics again.

In general, the CFO role takes the long view on your business and is critical to fund raising capital. Its role can vary considerably, depending on the structure of your company and its needs; for example, if there is a board for your business on not. Whatever kind of company you have, the CFO’s expertise invaluably helps the CEO make smart decisions at critical moments that steer the company toward successful milestones.

It used to be that the CFO and the accounting area used to primarily work in debits and credits but today’s CFO has a much larger portfolio. This broad position is responsible for scaling operations and the person holding this title should bring a data-fueled, strategic view to the business.

In small organizations, the CFO typically also covers HR, IT, operations, legal matters, risk and IT security management. At the same time, the CFO’s long view and expertise help the CEO and the company make smart decisions at critical moments to steer it toward successful milestones.

While the challenges to your company’s finance function can greatly vary, even from year to year, the CFO handles the following areas as a matter of course.

1. Take the long view.

As we’ve seen with the coronavirus crisis, the market may change, demand may change, and that means expectations from the Board and investors may change. To keep up with all the shifts, even in normal times, a long view approach is vital. What are some of the future steps for the company and what can be done today to get there? It’s a constant question. Accurate and reliable financial reporting provide the answers and CFOs use this data rich information to keep stakeholders informed and make better decisions.

A CFO’s mindset is strategic at all times, paying close attention to historic trends and current data points, which inform what moves to take. The CFO is prepared to execute quickly at critical moments by planning out potential expansions and investments, exploring scenarios and exit strategies, and determining how the company can survive tough times, prevent growing too fast or not fast enough. 

2. Oversee the capital structure.

Debt and equity financing falls under the CFO’s role. As the advisor on the company’s capital needs, the CFO leads fundraising and engages with prospective investors to show them the company’s potential. The role extends to interacting with current angel investors, VCs, and the Board to review the company’s priorities and make any plans for transformative transactions like M&As, RTOs and strategic partnerships. Simultaneously, the CFO keeps watch on smart spending, often with a controller’s support on budgeting and monitoring expenses.

3. Tell the real story behind the numbers.

There’s a connection between the numbers and the narrative that can be shared with investors that only the CFO can meet. Understanding what the numbers say is one thing—but then being able to communicate them in a way that investors can understand and appreciate is a special skill.

4. Refine the business model.

The CFO’s analytical skills and understanding of business strategy steer the company toward growth milestones. There are usually detours along the way for every company and in any kind of sector; cannabis is particularly tricky. Startups need a CFO’s keen eye in analyzing revenue streams, key resources, activities and partners, and cost structure to make the right decisions for ongoing modeling.

5. Value top talent.

The finance function is typically incomplete as startups get up and running. Certain skillsets may be missing to move forward—but a full-time hire is not yet in the cards. Filling in the right layers through a CFO full stack teamis an efficient way to address talent gaps, since it can provide the right skills and expertise when needed.

6. Use technology strategically.

The CFO has a firm handle on tech solutions that will keep not just the finance function running smoothly but the company’s operations as well. Evaluations of available systems will change as the company grows so rightsizing is a priority. The goal, of course, is to not overinvest in systems with all the bells and whistles that could overload the tech spending budget and not be used to their full capacity for some time.

The CFO looks for opportunities for innovation and efficiencies. Automating core processes achieves both goals while ensuring the team accesses more reliable, timely data, which then, in turn frees up bandwidth to focus on more strategic matters. That’s why opportunities like AI can lead to a better understanding of customer usage patterns, enabling the company to predict what will be in demand.

Today’s startup CFOs are also frequently chartered with managing the IT function. In that capacity, they manage IT security, handle IT compliance, to mitigate data breaches and cybersecurity risks. The right IT systems support proper workflows, helping to ensure the integrity of the company’s financial information.

Is it time to hire a CFO?

The right people, processes and systems are a work in progress in the early days of a fast-moving company, and CFO expertise helps to ensure the right decisions are made every step of the way. Knowing what the role can do for your company can help you engage the right talent and alternatives exist to hiring a full-time CFO. There’s no reason to be intimidated by the CFO title—instead, there’s every reason to take advantage of this strategic position.



Maureen Ryan

Maureen Ryan

Maureen Ryan is a vice president at Kukuza Associates, a cannabis finance advisory firm with roots in the sector that go back to 2014. Named to the 2020 list of influential business women in Silicon Valley for her pioneering work in cannabis accounting and finance, Maureen has also been profiled by the National Cannabis Industry Association. Contact her at [email protected] to unlock your company’s potential or visit Kukuza’s site to get assessed.



This Post Has 0 Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

Recent Stories

French Cannabis Industry Awaits Court Decision On Status Of CBD Flowers This Week

THE French hemp and CBD industry is waiting for a court decision this week which it hopes will overturn the Government’s ban on the sale of CBD flowers – following hearings on two successive Fridays. On Friday gone, in the Palais-Royal in the centre of Paris, France’s highest court the Council of State listened to…

What is going on with OLCC recreational marijuana licensing?

by Mia Getlin – Partner, Gleam Law We previously reported that, in early November 2021, the Oregon Liquor and Cannabis Commission (OLCC) announced that the agency had lifted its pause on issuing new non-producer recreational marijuana licenses and would immediately begin processing new applications for retail, processor, and wholesaler licenses. Additionally, the agency began contacting people…

Why Headstrong Head Growers Won’t Help Your Business Get Ahead

A headstrong grower is a cultivator that believes their way is the only way to grow. They won’t consider other cultivation methods, and they’re particular about the equipment, technology, and inputs they use. In my experience, this stubbornness is rooted in insecurity. Growers that claim their way is the only way are really saying, “This…

Omicron strains marijuana industry supply chain in Massachusetts

Licensed marijuana firms cannot legally move pot products across state lines. But that doesn’t mean they’ve been spared the supply chain disruptions wreaking havoc on the rest of the business world. As the Omicron variant surges, Massachusetts cannabis companies are facing significant shortages of foreign-made packaging and construction materials that are essential to their operations, including…

More Categories

Back To Top
×Close search