Like no other leadership role, the CFO position has branched out significantly in recent years. This can be seen at many VC-funded startups that face varying challenges, goals, and stakeholders—and need an expert to help guide them through every turn.

When it comes to cannabis startups, the playing field for CFOs is particularly expansive. With many cannabis ventures lacking a full functionally-diverse management team, their CEOs and active investors can look to fill that void with a versatile, growth-savvy CFO.

Companies that lean on the capabilities of a seasoned CFO are set up to scale their operations and bring a data-fueled, strategic view to the business. We’re not talking about the CFO of long ago who may have been solely focused on accounting matters. The role has gone from focusing only on the finance function to overseeing 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 leadership team make smart decisions at critical moments to steer the company toward successful milestones.

The role of the CFO can vary greatly from company to company, whether it’s a dispensary looking to double its locations or a cultivator needing to ramp up production and scale. But generally, the CFO role covers the following responsibilities.

1. Always looking ahead.
The market may change, demand may change, the regulatory environment may change, and expectations from the board and investors may change. To keep up with all the shifts, 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 and air-tight controls make it so the company can keep the various stakeholders informed and make better decisions.
A CFO’s mindset is strategic at all times. Close attention is paid to historic trends and current data points in order to inform what moves to make. 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 prevent growing pains by building disciplined, data-driven decision processes.

2. Bringing top talent together.
The finance function is not always fully formed at many cannabis startups. Certain skillsets may be missing. Your company will likely hit a roadblock without the right level of expertise but be reluctant to take on another full-time leadership position. Filling in the right layers through a CFO full-stack outsourced team is a highly efficient way to address the talent gaps, with the right skills and expertise brought on only when it’s needed.

3. Overseeing, understanding the capital structure.
Debt and equity financing falls under the CFO’s purview. As the advisor on the company’s capital needs, the CFO leads fundraising initiatives and converses with prospective investors to show them the company’s potential. The role extends to interacting with current investors and the board to go over the company’s priorities and any plans for transformative transactions. Simultaneously, the CFO keeps a watchful eye on smart spending, often with a controller’s support on budgeting and monitoring costs and expenses.

4. Explaining the numbers like no one else can.
Seasoned CFOs see connections between the numbers and the company’s narrative—they are uniquely qualified to not only explain what has happened with investors but what it means for them and the company moving forward. It’s not about spouting off facts. The role fills in missing pieces by communicating clearly at any stakeholder’s level of understanding.

5. Bettering the business model.
A combination of analytical skills and understanding of business strategy helps to achieve the growth milestones that the company has set up as critical goals. While unexpected issues arise and adjustments may need to be made, the CFO has a plan for various scenarios. Cannabis companies rely on this expertise to see it all, from looking closely at revenue streams, critical resources, activities, partners, and cost structure. With a clear picture, the CFO guides the company toward the right decisions on adopting the right model.

6. Providing a strategic take on technology.
The CFO has a firm handle on the 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—especially in the emerging cannabis market. Rightsizing is a priority. The goal is to not overinvest or assume the role of early-adopter. Systems with unproven bells and whistles can quickly consume the tech spending budget with functionality that cannot be used to their full capacity for some time.

Within the finance function, the CFO looks for opportunities for practical innovation and efficiencies. Automating core processes achieves both goals while ensuring the team accesses more reliable, timely data and freeing up their bandwidth to focus on more strategic matters. That’s when opportunities open up to explore how advanced technologies like AI can lead to a better understanding of client usage patterns, enabling the company to predict what will be in demand.

Today’s cannabis CFOs are also frequently chartered with managing the IT function. In that capacity, they manage IT security and 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.

Filling the CFO Role at Your Cannabis Company
What growing companies need out of the CFO role varies and can be met with a CFO full-stack outsourced team. This way, the company has access to the right skills at just the right time. At this point, a part-time finance team might be the best fit. It avoids the risk of overhiring. It can help the company scale. And it infuses the company with the expertise needed to keep moving at a quick pace but with the flexibility to swiftly make changes when necessary.

As a consulting CFO for Kukuza Associates, Gary Potts knows the CFO role inside and out. He’s helped dispensaries, growers, and many other small and midsize companies power through their growth challenges and move forward. He previously worked at Service Champions, Satmetrix Systems, and PwC.