How California female cannabis entrepreneurs are overcoming hurdles in fledgling legal industry

Female business owners face challenges starting and running cannabis operations, according to several such entrepreneurs who spoke at a recent industry conference in Santa Rosa.

“I’m sure everyone’s probably tired of the cliché of building the airplane while we’re flying it, but that’s literally what we’ve been doing for the last two years,” said Shannon Hattan, co-founder and CEO of Fiddler’s Greens and High Tide Distribution, on a panel at the Business Journal’s North Coast Cannabis Industry Conference on May 7.

in response to a question from Griffith about challenges she has faced.

Cheriene Griffith, vice president of production for Santa Rosa-based CannaCraft, moderated the final panel of the event, made up of female venture owners. A common concern among cannabis businesses is dealing with constantly evolving state cannabis regulations, but Hattan also said she faced personal challenges as well.

“The first is probably coming out of the cannabis closet,” Hattan said to a laughing audience. “I’m pretty sure when I left my job in 2016, if you took a survey of my family and coworkers, zero of them would have said I was starting a cannabis business.”

Despite the difficulties of remaining licensed and compliant with evolving state rules, Hattan said she thought the next couple of years would result in a clearer regulatory environment.

“I think that the shift is happening really fast right now. And Instead of us being the trailblazers fighting to stay compliant, fighting to get sensible regulation, we’re going to be fighting to keep up,” she said.

Alexa Rae Wall, co-owner of Moonflower Delivery and chairwoman of the Sonoma County Growers Alliance, agreed that state regulations are difficult to keep up with. But she also said local neighborhood opposition was an ongoing stumbling block for the industry in Sonoma County.

“Something that we’re seeing here in Sonoma that’s been pretty detrimental to the success of the industry is neighborhood opposition, and people who aren’t educated on what a permitted legal cannabis farm actually means,” Wall said.

She recalled multiple instances when those opposed to cannabis operations in the county voiced their opposition to the Sonoma County Board of Supervisors, claiming the farms damage the environment.

She noted the Save Our Sonoma Neighborhood group and other similar organizations statewide continue to organize against legal cannabis, painting it as a lightning rod for crime, as well as a threat to the health and safety of children.

Wall said many of the concerns are holdovers from the era of the illicit cannabis trade, “and those have since kind of traveled over into the regulated marketplace.”

Like any new business, cannabis enterprises need the right people and culture to operate, a challenge Rachel Hazlett, CEO of Lucky 420, said is an ongoing effort.

“What comes up for me is thinking about just building a really efficient, strong team,” Hazlett said when asked about challenges she and her company face. She said her company has struggled with conflict avoidance in terms of its internal culture.

“There’s kind of a stereotype of business leaders being very aggressive, and I found that whether it’s my generation or being a female-led company or the time that we’re in, I see a lot more conflict avoidance and mitigated communication,” Hazlett said. “If you just (leave conflicts) unaddressed, our team is less creative, or less efficient, or less productive.”

Hazlett said she has turned to tools like nonviolent communication training to ensure a working culture and ultimately a stronger bottom line.

Annie Holman, co-founder of the Galley Cannabis Manufacturing, encouraged cannabis entrepreneurs to take risks and to use the burgeoning cannabis business community as a resource.

“Put yourself out there. Don’t be afraid to ask questions. Don’t be afraid to connect with other colleagues. I’m happy all the time to give back because so many people ask me to answer questions about what it’s like to be in the industry,” Holman said. “Women are full of positivity and optimism and patience, and we need you in the industry.”

Holman also weighed in on the future of the industry in the state and the North Bay.

“I’ve been in the industry only five years and in the last 12 to 18 months, I’ve seen more professionals entering the space,” she said. “The brands are much more upscale, the quality of products are exceptional.”

Holman also said she sees more business partnerships developing in the next two years.

“The regulations are challenging and suffocating sometimes,” she said. “I think it’s vital that we support one another. We’re not afraid of hard work, but we need to do it together.”

Garden Society co-founder and Chief Marketing Officer Karli Warner agreed, adding that she sees more women-owned cannabis companies developing as the industry matures.

“We’re actually working directly with our distributor to make sure that we’re building a portfolio that includes other women-owned companies,” Warner said. “We’re able to bring ... a set of women-owned companies and really hold (distributors) accountable to supporting women on the shelf.”

She added, “like any other industry, women really need to lift each other up.”

Hazlett said she hopes more venture capital and other funding will go into women-owned businesses like hers.

“I believe it’s less than 2% of venture capital funding in the U.S. (that) goes to women-founded companies,” Hazlett said, adding women-owned enterprises are central to overcoming the implicit biases of male-dominated business culture. “What can we change? What can we adapt? And how can we innovate in terms of how we’re doing business to be more productive, more inclusive and, ultimately, just be better businesses?”

Hattan said she has experienced those biases when in business meetings alongside her husband.

“I’m going to give a little bit of a shout out to my husband … because we still do battle when we go into some meetings,” Hattan said. “The men at the table tend to look at him when they’re asking the hard financial questions or asking about strategy or rules. And he just sits there and says, ‘I told you, you need to talk to Shannon.’”

Wall and Hattan both also raised concerns about the future planting of hemp — which also falls under cannabis but does not contain significant levels of the psychoactive ingredient THC like marijuana — now that it is legal at the federal level.

Wall noted hemp is defined as having 0.3% or less THC content under federal law, a rule that in her view should be debated and revised.

“So we’re basically taking one cannabinoid out of the 75 cannabinoids that are inside of the plant, and we’re demonizing it,” she said, referring to THC.

She also said hemp can be grown for industrial purposes to harvest its fibers and other products but can also produce prized oils, including CBD, which many claim aids with pain, sleep and other issues.

“I think that it’s just important to take a moment to think about how are we defining hemp in cannabis,” Does that definition actually make sense? And what should the definition actually be?” Wall said.

Hattan said the two plants are almost identical to the naked eye, a possible opening for illegal growers to hide illicit grows in legal hemp stands.

“The other side of that is the hemp that’s grown for CBD, for oil production, looks just like cannabis (grown for THC production),” she said. “It’s going to give the illegal operators a place to hide their illegal cannabis.”

Staff Writer Chase DiFeliciantonio covers technology, banking, law, accounting, and the cannabis industry. Reach him at chase.d@busjrnl.com or 707-521-4257.