The headline is admittedly misleading. If I truly knew which direction we – as a nation and as an industry – were headed, I would be fielding calls from Warren Buffett. Suffice it to say, that is not happening. However, there are indicators we can watch and trends we can track. What follows is the introduction to a periodic evaluation of those signals which can be easily lost amid the noise of the Covid-19 crisis. There are no shortage of wrinkles and idiosyncrasies to the cannabis market but by widening the aperture, we might find some inspiring and useful models to follow from the world at large.
One such notable event, sticking with Buffett for a moment, was an announcement by the Berkshire Hathaway CEO during Saturday’s virtual shareholders’ meeting. In a departure from the norm, Buffet revealed Berkshire “sold out of its entire interest in the airlines” – including American, United, Delta, and Southwest – “worth at least $4 billion” in an April fire sale. Buffett’s explanation for the move is unimpeachable: “The world changed for the airlines.” Indeed.
As an aside, Buffett offered an unnecessarily contrite characterization of his investment in airlines – calling the move an “understandable mistake” – considering no one was worried about a global pandemic. (Except, notably, Bill Gates, the Naval War College, and, naturally, Reddit.) Incidentally, no one in a leadership position should feel the need to express regret for not anticipating a nationwide economic freefall breaking out (no pun intended) virtually overnight.
That the airlines will suffer from consumer concern about safety seems like a no-brainer moment. But it isn’t necessarily that the most obvious impact is the most significant. After all, where are many frequent fliers going? Like many industries, events, conferences, and all manner of in-person interactions drive growth and collaboration in cannabis. Buffett’s announcement comes as all business travel has effectively been grounded. The ripple effects have been felt for weeks and will spread throughout the nation and North America throughout 2020. The sheer scale of the impact is hard to quantify.
Take the case of Omaha, Nebraska for example. The city hosts Berkshire Hathaway’s annual meeting each spring when thousands of shareholders and hangers-on descend on Omaha for the so-called “Woodstock for Capitalists”. Numerous businesses rely on the annual influx of revenue from the weekend. According to the city’s tourism bureau, canceling the event will leave a $21.3 million gaping hole in the city’s economy. But that is only ten percent of the losses Omaha faces due to the coronavirus outbreak. Including the annual College World Series, the total cost of event cancellations from March to June is estimated to cost the city’s economy $197 million.
The contrast between Berkshire and the College World Series is striking. The latter simply won’t happen this year. How many conferences and events will follow suit? Event organizers are in an unenviable if not untenable position. In a sign of the upside-down world we live in today, Insane Clown Posse may present the best example of leadership for organizations struggling to solve for all the interests in conflict and in concert during this crisis.
For those who might be in the dark, Insane Clown Posse, or ICP to its fans, is a hardcore hip hop duo known for elaborate and bizarre live performances. The group has developed a die-hard, diverse fanbase known collectively as Juggalos which have congregated annually for the “Gathering of the Juggalos” festival since 2000. In January, ICP announced the dates for this year’s festival in August. However, on April 22, in the face of the widening Covid-19 crisis, the group’s record label called off the event. The organizers made what must have been a difficult decision well in advance and, rather than dangling any vague hope of a date later in the year to its fanbase, offered the following statement: “We can’t possibly in good conscience even consider trying to put on a Gathering during these difficult times.” The move has garnered ICP attention for showing leadership and compassion during a time when safety and commercial interests are less than aligned. The Atlantic went so far as to call the move a model in “ideal pandemic leadership”. Where do we go as an industry? In the coming weeks, we’ll seek to share out how the mainstream market, and other dynamic niches, might offer instructive examples of what to do – and what to avoid – as the cannabis industry moves into an uncertain future.