From wine to cannabis, shoes to beer, higher ed to pot: Lessons in making C-suite shifts between industries

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Like many managers and executives who jump to new industries, when Zack Crafton decided to get into the cannabis business, many of his skills as a C-suite executive in the wine trade transferred over.

But many did not.

Before becoming the CEO of the Vallejo-based ESI Logistics on Mare Island, a cannabis distribution company that partners with other cannabis retailers to deliver their products, he was chief operating officer at online retailer Naked Wines.

Despite taking the head of supply and logistics and the head of marketing with him, Crafton quickly realized he was in partly unknown territory in the newly legalized cannabis market.

“When someone signs up for a wine club we know how often they buy,” Crafton said. “If you have a subscription customer on the wine side and they buy four to five times a year, it helps you predict how many people you need,” he added.

Not so with cannabis.

“It turns out when we first launched we had people who buy every two weeks, or every week … we had no idea what the aggregate order value would be.”

Crafton used his experience, however, to find similarities between the two products and bring his years of experience to bear.

“Wine and weed are at their heart luxury agriculture goods,” he said. “There are lots of similarities around why people buy the product and the effect the product has.”

He said both are perishable, temperature-sensitive goods that are highly regulated.

“There’s an attention to detail, there’s a knack for the regulatory piece and operating within the law and then operating a very efficient organization,” Crafton said.

Whereas tasting notes come with many wine bottles, Crafton’s company produced instructions on how to roll joints and connect vaporizer batteries as well as what the effects of a particular type of cannabis are.

While he originally started a cannabis company called Big Moon Sky, Crafton said ESI, the distribution company, was quickly approached by other cannabis companies looking for help with online tools and delivery.

“We built a sophisticated supply chain and sophisticated tech stack,” he said, noting similarities like keeping wine cool so it doesn’t spoil and ensuring the cannabis doesn’t overheat in shipping so it doesn’t become more potent.

Other North Bay executives, like Chief Marketing Officer Kelly Murnaghan of Petaluma-based Lagunitas, have made the jump from one seemingly totally different industry to another.

Murnaghan came to Lagunitas in June after a long stint as vice president of marketing at Vans shoe company. Shoes to brews anyone?

“There’s an incredible amount of overlap with the Vans model and Lagunitas model,” Murnaghan said. She noted she is the first person in the role since Lagunitas founder Tony McGee moved on to other endeavors.

She said McGee’s risk-taking, customer-focused approach was similar to that of Vans founder Paul Van Doren’s opening a small shop and tailoring his shoes to skateboarders’ needs.

“Neither brand relies a lot on paid advertisements,” Murnaghan said. “The value in (the) deep connection with a consumer is greater than achieving reach through big media.”

She was able to transfer over a similar mindset between the two companies in their unflagging focus on a core product while continuing to innovate. For Lagunitas, it’s India Pale Ale is its most well-known beer, while for Vans the core five shoe styles continue to be the base of the business.

Coming to a new industry forced her to see Lagunitas’ products with fresh eyes, Murnaghan said. After 12 years in footwear, “I think you get so used to the kind of consumer you’re talking to and the seasonality of your process,” she said. “Sometimes I think lifting yourself out of one industry and looking at another forces you to think who your new consumer is and see the business from their perspective.”

A commonality between Murnaghan's and Crafton’s shifts were that they both remained in the private sector, but that wasn’t the case for Andy Naja-Riese, CEO at the nonprofit Agricultural Institute of Marin.

Naja-Riese spent years working on food and nutrition issues at the U.S. Department of Agriculture where he oversaw what was formerly called the food stamp program in the agency’s Western Region area.

He said his current job connecting communities with agriculture and food producers shared many similarities with his government experience, but the organizations could not be more different.

“Government is a very large bureaucratic system with multiple layers that’s intended to move very slowly,” Naja-Riese said. “Nonprofit work does not have the same bureaucratic levels that can challenge progress,” he added. “For me it’s been an extremely positive change.”

He said it is easier to find people to hire, sometimes through nontraditional means, working at a nonprofit, adding the risk adverse federal government contrasted sharply with his current creative, collaborative environment.

He said many of the financial and organizational skills he employed working at USDA still come into play however despite now having to look for funding as opposed to having access to taxpayer dollars.

“The forecasting and financial analysis are very similar,” Naja-Riese said. “The big difference is in the government there are whole departments and many people you have available to work with. In a nonprofit your team has to do everything so you’re all really dependent on each other to do financial reporting and analysis.”

The private and public sectors are not incompatible in Naja-Riese’s experience however. “Nonprofits and the government work really well together,” he said. “Our organization just received a $2 million investment from California to fund our center for food and agriculture,” he added.

For Santa Rosa-based cannabis company CannaCraft’s president of new markets, Bill Silver, coming from a background in higher education provided some transferable skills.

“I could confidently evaluate problems and opportunities based upon my experience and feel confident in my knowledge of the situation,” Silver, previously the dean of Sonoma State University’s School of Business and Economics, said.

He added that moving into the cannabis industry was reminiscent of his prior work experience as a consultant working across industries.

“I’m surrounded daily by people that have deeper experience and more knowledge about the cannabis industry.” He added his “contributions to the technical aspects are to bring benchmarking examples … and experience with similar business challenges.”

Silver offered some advice as well for those thinking about switching industries as he has: “For those contemplating transitions from one industry to another, it’s OK to leave something that you love doing or something that you’re comfortable doing to go try something else,” he said. “Even if it’s not ultimately successful, the strength you give yourself though that learning opportunity will serve you well.”

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

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