When recreational marijuana became legal in California last November and sales began in that state this past January, a massive untapped industry — and a once-black-and-gray market — were unleashed. Experts predicted the legalization of California cannabis would mean billions of dollars flowing into the market. So far, tax revenues from weed sales — there’s currently a 15% tax — have been less than expected. But as more states legalize and the stigma of marijuana dissipates, capital is taking notice — and that means elite business schools are, too, trying to get a sense of the market potential and stay ahead of next developments.
Two years ago, a group of students from the University of California-Berkeley’s Haas School of Business published one of the first case studies focusing on the weed industry and diversity. Last year, Paul Seaborn, a professor at the University of Denver Daniels College of Business piloted the first “Business of Marijuana” course. And earlier this year, the University of Cambridge’s Judge Business School launched a “seed to sale” accounting case study that was used to teach in a class. MBA interest has further manifested in the rise of several campus clubs.
Yale School of Management hosted a day-long conference on the marijuana business last February. “We felt there was a moral imperative for business students to understand the complexities of cannabis,” says Billy Marks, a second-year MBA at Yale and one of the conference organizers. The conference featured speakers from the cannabis industry and drew attendance from business schools across the country, stretching all the way to UCLA’s Anderson School of Management.
“Cannabis is just now going through the first stage of professionalization, which I think makes it a very compelling space for MBA students who are a little more entrepreneurial or looking for something a little different,” adds Connie Lee, another second-year MBA at Yale and conference organizer.
CANNABIS CLUBS FORMING AT B-SCHOOLS AROUND THE COUNTRY
Besides Yale, such schools as The Wharton School at the University of Pennsylvania, Stanford’s Graduate School of Business, UCLA’s Anderson School, and the University of Southern California Marshall School of Business have recently devoted faculty and student resources to the emerging industry. And they are just the most prominent names. “As any new entry into the business world, business schools are looking at ways to provide the right guidance and counsel to our students who are interested in anything,” Assistant Dean and Director of Career Services at USC Marshall Mark Brostoff says. “The difference here is the legal definition between the states and federal government, so we walk a finer line, but not when it comes to the development of their skill set or the deployment of their business skills. It really doesn’t make a difference what the product is, you’re still going back to the basic tenets of marketing, sales, distribution, and supply chain.”
The intersection of a burgeoning yet unknown and potentially risky industry, and the need for all sorts of business skill sets, make it an intriguing space for business students. That interest began to tick up last November, when California voters passed Proposition 64, says Anthony Dukes, a professor of marketing at USC Marshall.
“I think the talent pipeline for the growers, sellers, investors, and dispensaries wasn’t very sophisticated,” Dukes tells Poets&Quants on a phone call. “They were basically bud-tenders. But now as the industry is deemed its legal status in California, I think these large investment firms that are pouring in the cash are beginning to see the need for the talent at the graduate level, and that expertise is important.”
‘A TON OF STUDENT INTEREST’
At schools like UCLA’s Anderson School, students have taken the marijuana leadership into their own hands by launching the Cannabis Business Association, a student-run organization that is recognized as an official campus club. The club’s beginnings go back to the 2016-2017 academic year, but this past year was its first official year on campus. So far, they’ve hosted multiple events and panels.
“There was a ton of student interest and that was an encouraging sign, that the student body was interested in having more opportunities to learn from people currently in the industry,” says Derek Wong, a second-year MBA student at Anderson. “As a business school, it’s important for us to have representation and provide leadership in any industry.”
Wong says many involved in the club are not seriously considering the cannabis industry as an immediate professional path. But because of UCLA’s location and the timing, there is a lot to gain from studying the emergence of the industry and how certain skills can be applied to other industries and job functions. “Some of the club’s leadership board are looking at the cannabis industry professionally, but a lot of it is we felt like it was an important topic in the business world especially with how close it all was to us,” he says.
Still, Wong says, many inside the industry are very open and receptive to sharing what exactly is happening in the industry now and how it applies to curious MBAs. “One approach companies are taking is hiring people from outside the industry to help them apply best practices from other industries to be more efficient and profitable,” Wong says.
“There are a lot of people that have done this for a long time and they have a wealth of knowledge,” he adds.