Episode 40 – Matt Plavan (Bioscience and Biogenetics)

This podcast audio has been transcribed by an automatic transcriber.

Fred Rocafort  0:08 

Global law and global business go hand in hand, but never seem to keep pace with each other. The importance on the global stage of developing and developed nations waxes and wanes, while consumption and interconnectedness steadily increase all the while laws and regulations change incessantly requiring businesses to stay nimble. But how do we make sense of it all? Welcome to Global Law and Business hosted by Harris Sliwoski International Business attorneys. I’m Fred Rocafort

 

Jonathan Bench  0:37 

and I’m Jonathan Bench. Every week, we take a targeted look at legal and economic developments in locales around the world as we try to decipher global trends in law and business with the help of international experts. We cover continents, countries, regimes, governance, finance, legal developments, and whatever is trending on Twitter. We covered the important the seemingly unimportant, the relatively simple and the complex.

 

Fred Rocafort  1:02 

We hope you enjoy today’s podcast. Please connect with us on social media to comment and suggest future topics and guests.

 

Jonathan Bench  1:22 

Today we’re joined by Matthew Plavan of Arcadia Biosciences who was appointed president and chief executive officer in September 2019. He joined Arcadia as Chief Financial Officer in 2016 and also served as president of Arcadia specialty genomics, a strategic business unit delivering innovations in hemp. Prior to joining Arcadia, Matt served as CEO and board member of seska therapeutics, and CEO of thermogenesis Corp. He also led the finances as CFO of two high tech private equity backed companies positioning each for successful exits. Prior to that he had executive and senior management 10 years at both McKesson and Ernst and Young. Matt is a CPA and earned a bachelor’s degree in Business Economics from the University of California Santa Barbara. Matt, welcome to Harris Sliwoski. Global law and business.

 

Matt Plavan  2:10 

Jonathan, thank you. Happy to be here.

 

Fred Rocafort  2:13 

Matt, welcome. I’m always fascinated by the trajectories that lead our guests to where they are currently. And that is particularly the case, when we have guests such as yourself that are doing things that are very different from from what we’re doing. Please tell us a little bit more about how is it that you got to this point in your career?

 

Matt Plavan  2:33 

Well, I think Jonathan did a good job of kind of laying out at a high level, you know, the the major steps of my career. But when I think back to how I got started and what my greatest influences were, I think about starting out as a public accountant in Los Angeles, and I had a number of very interesting clients in the entertainment and sports sectors. And for, for example, the LA Dodgers, I had the good fortune of being able to audit the Dodgers when they won the pennant and 89. And I also had interesting clients like 20 Century Fox was able to audit, you know, certain movies that Arnold Schwarzenegger and Tom Hanks were in. And so although I was an accountant, and getting a really good feel for, you know, business fundamentals across many different sectors, and what I was also learning was, I really liked variety. And being entrepreneurial, which you don’t tend tend to associate with accounting and accountants. So it was kind of the best of both worlds learn how businesses operate from the inside out. But also develop an appetite for, you know, variety and, and working with people and understanding what it takes to make businesses in general thrive. And so that set me on a trajectory to although I entered into the private sector, as a controller for the company that ultimately became part of, you know, $100 billion company, McKesson, it, you know, because of that formation that I just described, you know, I really sought out opportunities to get into general management and leadership positions pretty early on in my career. And, you know, found myself really gravitating towards bringing novel ideas to fruition, you know, from early stages of strategy development, and concept, testing, to actual funding of a new business bringing people together, to to actually bring that idea alive and create a, you know, a thriving business and a return for, for those who took the risk to invest in in those ideas, and so That’s really what led me to these kind of leadership and executive positions in what I would describe as breakthrough and disruptive technologies, which is what I’ve been doing the last 20 years. But you know, it really caught it calls on you to, to reach in and, and, and really, you know, draw from everything you have to, to to bring a concept like that to fruition, which is the most challenging and rewarding way to, to live a career. And I guess that’s, that’s what I think of when when you ask, you know, what, what led me down the winding road to where I am now.

 

Jonathan Bench  5:42 

I almost chuckled, I mean, I did chuckle, but I was muted. So you couldn’t hear me chuckle when you started talking about CPAs. And entrepreneurship in the same sentence, right? Because it’s kind of like lawyers, it takes a very special breed of lawyer and CPA to even know the word entrepreneurship, and then to be comfortable dealing in that space, right. I mean, that’s why they gravitated toward law and toward accounting is because lawyers like to like to manage risk and mitigate risk, and very often are not the ones comfortable taking the risk. And I would say CPAs often fit into that same boat, where you they want to be in their comfortable boxes, where things fit perfectly in accounting balance left and right. And it makes sense, you know, even just hearing you talk about how you’ve gravitated away from the more traditional role into something where you’re more comfortable being in the limelight.

 

Matt Plavan  6:34 

Yeah. And although traditionally, I would say no, that is absolutely true that accountants have a reputation a generalization of being fairly binary, and whatnot. But I will say that in the last 20 to 25-30 years, I think there’s been a recognition that that no longer is a mentality that is going to lead you to success and, and global economics today. And you see, a lot of you probably see a lot of literature, both for accountants and lawyers that, that reflect how the industry is looking to change that persona, and is looking for people with the characteristics that we’re talking about now. And, and actually looking for a sea change and how these these two professions have been historically viewed. And I think we’re getting there, you know, I do, I do think that we’re starting to see a crossover of, you know, part of, it’s the way we we communicate today, through digital media and such, it’s much more, you know, you’re you’re on, you’re on camera most of the time, one way or the other. And so, being being more, you know, not just so binary and locked away with the green visor, but but really participating as a business person first, and perhaps a lawyer or accountant second.

 

Jonathan Bench  8:05 

So Matt, Arcadia is doing some very interesting work in in a range of business areas. Could you tell us some of the most notable things that you’re doing right now?

 

Matt Plavan  8:14 

Yes, it’s pretty exciting time for us. And we have spent the past 18 years and $200 million developing technologies that improve crops for farmers, as well as crops for consumers. So making broadacre crops more productive for those who grow them, and then making the nutritional content of the crops themselves and the ingredients that we that we derive from them, more more favorable for consumers in terms of health, primarily. So we brought three new products to the market for wheat. And wheat is a is a crop that has been bred probably for the last 75 years primarily to improve the productivity. And I think one of the things most notable that has really not been a focus is improving the nutrition intrinsic to the wheat. And that’s what we’ve done, we’ve we’ve improved the fiber content, while at the same time reducing the allergenicity for glue tenons two very important areas of focus for consumers. And so we launched in 2018 into the market, a brand that we call Good Wheat. And we’re in the process now of scaling into the market in 2021. Through e commerce, a direct to consumer brand called Three Farm Daughters, which we’re really excited about which we think is highly differentiated. And we’re introducing that wheat product through a pasta and flour, product line And so, you know, the target audience are consumers who want, you know, nutrition dense pasta, and flour with fewer calories, and significantly reduced glutenins for those who are gluten sensitive. And because of the underlying technology that we have embedded, we’re able to put these out with very clean what we call clean labels, you know, consumers, 90% of consumers will tell you, if they don’t understand a word and the ingredients, they start to distrust what it is that they’re they’re buying. So they want to be able to read a label and ingredient, label and understand everything that’s on it. So in our wheat, we base our pasta, we basically have wheat and, and water and flour. And so very simple, clean labels, intended to, you know, provide a transparent experience with unparalleled nutrition. So that’s a really important launch for us in 2020. We’re taking it into retail as well as e commerce. And then the other area that’s really important for us this this year is the success of our good hemp business. And that has been a focus for us in the last two years, to bring the improvements and agronomics, to hemp that, you know, broadacre crops like wheat, corn and rice have experienced over the past 30 years, but hemp is not. And so with two aspects, we’re bringing high quality, genetically stable, genetically superior hemp seeds to farmers. And we have an operation in Hawaii. It’s a joint venture called archipelago ventures where we’re cultivating Hawaiian hemp with the objective of bringing a premium Hawaiian sungrown CBD to the market in the mainland, in 2021, we believe that that will be the only premium Hawaiian CBD available when we do that. So these are two major commercial initiatives for a company that has spent most of its history, you know, as a biotech company developing these traits. So in a way, you could say that we’re in the midst of a pretty significant pivot from r&d, to add a sales in and commercialization component to our business. And so we have AI expectations for these products being reduced to the market and the resulting revenue that they will generate.

 

Jonathan Bench  12:48 

So it’s great that you mentioned hemp, Fred and I in our law firm, we’ve we’ve been doing cannabis work for the last decade. And so certainly we’ve been tracking the marijuana markets on the west coast and elsewhere and then and then hemp being pulled out from the definition of marijuana on the 2018 Farm Bill. So we’re certainly well aware of the industry developments but it’s really great to hear your perspective on how hemp is moving and more into the mainstream of of crops, and then how we’re gonna bring, you know, good science to to the hemp crop. So we’d love to have you talk a little bit more about cannabis. I mean, you’re in companies based in California. So we know that marijuana is a big deal there too, as well as hemp because California is such a an agricultural powerhouse. So can you tell us what you’re seeing in terms of developments in in those markets that might be interesting for our listeners.

 

Matt Plavan  13:43 

That’s a big topic. I’ll start with the fact that we are a publicly traded company. And as a result, we’ve entered the cannabis space focused on hemp. Because as you mentioned, the 2018 Farm Bill provided the federal legal pathway for us to enter this market. As a biotech company, we view hemp as the greatest opportunity in genetics in 75 years for agriculture. When you think about the two green revolutions, the Borlaug revolution of the 70s, where chemicals and mechanization was brought to farming plus the biotech revolution in the 90s, where we we introduced advanced breeding and gene editing, we’ve improved the yield of all major row crops phenomenally. I mean, you think about corn in 1938, you would get 45 bushels of corn an acre. Today in many places, you’ll get 180 bushels an acre, phenomenal improvements. hemp has experienced none of that because it’s been largely illegal, prohibited, you know, in most areas of the world. So what we have is a plant like cannabis that has fun nominal medicinal health prospects as well as industrial applications, fiber and so on and, and you have so much potential in a crop that has very poor genetics. And so for us as a biotech company, this is thrilling. We see opportunities to bring value through the stabilization of genetics as a major opportunity for value creation, given our experience and our proven track record in transforming crops. So as a high level overview of hemp, we’re thrilled that hemp has been legalized through the USDA Farm Bill. Then if we look at the original intent, so now, we see quite quite a challenging scenario or challenging history so far in that the USDA, and the spirit of what they were doing was to legalize hemp. And the production of hemp extracts, what they did was defer to the FDA to to follow through with developing a regulatory framework. And as many know, that has not occurred for a number of reasons. And in fact, I would say that between federal state and local agencies, the the pronouncements, I don’t know quite what to call them, because they’re not law per se. But the regulatory environment is very confusing for growers and processors. In fact, recently, the DEA put out an interim final rule, which indicated that during the production of CBD, for example, if you’re sourcing from the hemp, and under either industrial pilot program, like the one in Hawaii, or under a state program, they indicated that any instance where you have produced a THC level, greater than point 3%, that you you could be in possession or you would be in possession of a controlled substance. So there’s a lot of confusion that’s been introduced into the market, in the absence of clear guidelines from the FDA and, and there’s been a lot of frustration in the legislature, state and federal. And so we have a crop that has tremendous potential, but has been embroiled in, you know, a regulatory snafu the last two years. And so that has had implications on the development of the CBD market, for example, and other markets that everyone has high expectations and hopes for with regard to hemp and hemp extracts. And so for Arcadia, having entered the space as a seed seller, and a genetics innovator, we too have felt the headwinds and the challenges associated with not having a regulatory framework put in place.

So there’s been a lot of positive development in that, you know, we do have the farm bill, and we do have certain avenues in which we, we can begin to cultivate and process but it has not unfolded at the pace and become the market that the analysts originally expected and foretold in 2018, when the farm bill was initially passed. And so what we’ve done is we’ve really tried our best to navigate the labyrinth, if you will, as state and local authorities have put in place either pilot programs until the FDA comes out with a framework or where we’ve been able to decipher that we can operate legally as a public company, and not be in violation of federal, state and local laws. It has slowed things well beyond what we have expected. And we’ve been as a public company, we’ve kind of tried to bring our shareholders and stakeholders along with us as we’ve navigated through this difficult unfolding of regulatory, you know, requirements. But I would say where we stand today, we feel very good that we have identified a pathway and working with folks like yourself who are also trying to understand these evolving laws and regulations. As I mentioned earlier, we are well positioned to continue with our cultivation in Hawaii and do our processing in the mainland and be able to bring to market you know, a CBD that will target topical applications because those are the ones that the FDA to date has not taken a negative view of so to speak anything that is CBD that is ingested is where the FDA will say until they establish what the regulatory framework is that claims and marketing a CBD is a very risky proposition. If you’re going to be marketing to consumers As a food or food additive, so we’ve stayed on the right side of that line and made sure that as we anticipate bringing our Hawaiian CBD to market, that it is an ingredient in a topical or cosmetic. So we feel like we’ve done a pretty good job of understanding and keeping ourselves legal at a time where that is a confusing and unclear definition. For those who are trying to bring hemp extraction to the market. It’s been a blessing and a challenge at the same time, we really do continue to believe that this is going to be CBD and hemp extracts. Whether it’s CBD CBG, or other cannabinoids, or other applications is going to be a very big market. It’s just a matter of sustaining and surviving through the the growing pains of such a dynamic new market.

 

Jonathan Bench  21:00 

Man, it’s interesting how you talk about the hemp cropping the biggest opportunity in 75 years as a business lawyer. That’s exactly how we describe what’s going on with marijuana and hemp industries as well. Because, you know, 5-10 years ago, we hadn’t had a new innovation in the way business law was dealt with a new kind of regulations that really laws and regulations that really changed the way we fundamentally think about how business can be done. And we were left as lawyers with a lot of complexity and a lot of the nuances of trying to figure out what can we be disbarred for this kind of advice? Can’t will the, you know, can we be arrested while our assets be seized? You know, these are the kinds of analyses that we went through, as well as advisors to the industry. And it’s been a wild ride. It’s been challenging and fun at the same time, like you said, were there. lots of opportunities, but also, you can’t do you can’t just chart a course and march forward, you have to chart a course and check every step along the way.

 

Matt Plavan  22:00 

Yes, I couldn’t have said it better myself. And there aren’t many law firms who have weighed in and taken that risk. And we’ve been fortunate to find some good advisors who have, as you’re talking about stayed on point with these laws and regulations as they evolve, and helped us to decipher areas that really even in the pronouncements were not clear, for example, the DEA IFR, when that came out, everybody in the space that we knew, and and and I think it was generally agreed that everybody had to take a pause. Because at first blush, it sounded like a re criminalization of hemp. And after we had an opportunity to digest and after the comment period, ran its course, and there was some, you know, a little bit of dialogue. I think we all got a little more comfortable with how you know, what the intent of the IFR was or is and how to adjust accordingly to stay in the game. And that’s really what it’s been about. I think it’s going to be good for everyone, ultimately, to get the FDA and to regulate CBD in particular, and and really open up this this opportunity for what it can and should be.

 

Jonathan Bench  23:32

And really every country is going through this as well. Fred and I were talking this week. I think it was at Panama. Fred, you were looking at the new regulations. Ecuador, Ecuador, why don’t you fill everyone in? Because I think it’s fascinating what your your commentary after looking at the Ecuador laws that are that are coming down the pike?

 

Fred Rocafort  23:49 

Yeah, sure. One of the things that that struck me the most, I don’t know if this is what you’re referring to, Jonathan, but one of the most interesting aspects about the new regulations these are the hemp regulations that were issued by the Ministry of Agriculture is that they draw this distinction between what they call hemp and industrial hemp and first of all, it’s not very clearly defined but you can more or less figure out what the what they’re trying to what they’re trying to do which is separate the kind of products that basically consumer products such as oils and beverages and that sort of stuff and then the the the fiber production and all that but the the definitions are not altogether that clear. There’s definitely potential for some gray area products that that might not be that that clearly distinguishable. And of course, we’re for those of us who work with hemp laws elsewhere. You know, where the where the term industrial hemp can pretty much encompass all of those products. That was really yeah, kind of kind of interesting and As I look at some of the regulations and laws and other countries in South America, you do see these, these issues come up. I remember, a few months ago, I was looking at a different piece of legislation, I forget which country. But it was not clear from from looking at the legislation. I mean, the the the specified what happened if the product had more than 1% THC, and what would happen if it had less, but there was no specific provision for products that had exactly 1%. And of course, as lawyers, that’s the sort of thing we pick up on, right, like, well, this is, you know, who knows, we might have to deal with, with a situation where it’s exactly at 1%. And I spoke about about this with it with a colleague from from Mexico, we, you know, we were really trying to figure out if there was something here, you know, maybe maybe it was sort of implied under that country’s own own law, you know, that, you know, if you don’t specify, then it’s by default, you know, it’ll be treated as if it has more or less, but in the end, you know, we just have to conclude that it was bad drafting. And I think that it’s a combination, in part, a lack of understanding in some cases of the, the issues and the concepts. And because you do see some pretty wacky things in terms of the provisions. And then at the same time, in some cases, maybe not the best drafting. So obviously, at the national level, if you’re talking about a bill introduced in the country’s legislature, it’ll probably be well drafted. But of course, once you get down to a ministerial level, then maybe whoever is tasked with drafting this might not have the necessary experience to come out with a with a clear product. So some interesting things that we’re seeing for sure.

 

Matt Plavan  26:55 

Yeah, I was just going to add something to that we have a lot of business to business relationships, partnerships globally. And, of course, looking to, you know, take our innovations to other countries is one of our areas of focus. And we have one particular partner in South America bio series, we just completed a transaction with them over the summer, we, as partners developed a drought tolerant soybean, and we sold our our interest in that joint venture to them over the I guess it was in the fall. Because we’d completed all of the development, it was time to commercialize. And they’re very well positioned to do that. And so we, in exchange for a fair amount of cash and shares and bias series, we sold that to them. And we’re watching with great anticipation, the introduction of that soybean globally. But of course, as strategic partners and having worked with them for as long as we, we have, as we got into hemp, we wanted to think more, you know, think globally. And, you know, to the point, the points made earlier in this conversation, trying to get a bead on the level of adoption, and what the potential barriers are to that adoption by country is pretty fascinating. And in South America, I’d gone through and kind of tallied up where each of these countries stood. Over the summer, as we were, we were looking at ways to partner in bringing our innovations to South America. And it is interesting, not unlike my own personal experience with cannabis. When  partners of ours three years ago came to us and said, you really should think about taking your experience and adopting hemp as a project and a potential market. I was still back, you know, with Nancy Reagan say no to drugs. I knew nothing about cannabis, other than it was really bad. And it didn’t take long for me to understand once I began to get educated, that you know, maybe that wasn’t the right characterization of cannabis all along and appropriately regulated, there was tremendous potential in this plant and that I had no idea that cannabis and hemp are the same species. It’s the same plant and as I got more well educated, I became very enthusiastic, very quick, about the potential of hemp and the cannabinoids in particular. And so I think that’s what we’re seeing as countries around the world grapple with this issue depending on their history, and whether they’ve embraced you know, cannabis historically, and many, many countries have not There’s an education that’s occurring at different paces, depending upon when there’s an attempt to introduce it. But when I looked at the eight or nine countries in South America, generally yet have an interesting mix, some countries, and I wish I had the chart in front of me, it sounded really smart, if I had it, you know, off the top of my head, but several of the countries were still pretty much. It’s a prohibition, we’re not even talking about or thinking about it all the way to date approved for medicinal, and we’re in the process of considering recreational nobody’s that far along yet in South America, for example. But it was interesting to kind of set a baseline and then watch over time, how it was evolving and similar to what’s going on in the US is, I really do think that as people, generally speaking, get more educated as to the potential, how robust those applications are. It I think it’s just a matter of time before it works its way through every country’s regulatory process or legal process. And that we we end up with a fairly open cannabis market in five years, it really is just a process that needs to unfold naturally. And I do think that, despite the challenges with, you know, the transforming from a negative view of cannabis to, to a more fact based view, is going to result in a broad and enormous market. But it’s just, it may be a little bit more of a journey than we had originally thought. But I see I see a global transformation occurring, and ultimately, an adoption of cannabis at a very minimum, as you know, medicinal market, and in many areas of the world, it will be a recreational drug. I think it’s fair to say that cannabis advocates tend to overstate the benefits of cannabis, and downplay the risks. And what I mean by that is, if you pick up a pack of cigarettes, you know, because it’s printed on the pack, that, that cigarettes cause cancer, if you get in a car, and you’ve been drinking, you know, the risk you’re taking. And so I believe that the liberalization of cannabis has to come along with the appropriate social responsibility and accountability, the way we’ve brought a similar products to market, if you want to call it products, but but but alcohol cigarettes, you know, it’s very, very clear what the implications and the risks are. And I think we need to be forthright about that when it comes to chronic use of marijuana, for example, again, Arcadia does not participate in marijuana, we won’t until it is federally legal, any of our innovations in hemp, we think do transfer nicely to marijuana. So want to be clear, we’re not operating in that realm. But it’s a major consideration, because again, I do think that we’re going to find over time it will become legalized in many countries as a medicinal market and whether or not it becomes one that is leisure are not It remains to be seen. But to the extent that it is legalized and made available, we have got to be responsible, and make sure that we are clear as to what the risks are, and that it is, is managed accordingly. Because when you compare it to other industries, alcohol and tobacco, for example, it lags behind, in my view anyway, as to the risks and benefits. And I think a lot more, you know, clinical work needs to be done for cannabinoids, as well as marijuana. And I think that’s underway. But I think what we’re going to find is it can’t be legalized without supporting construct that is forthright. And in fact base like we have with alcohol and tobacco.

 

Fred Rocafort  34:04 

Let’s talk more generally about the bio science industry. Can you share with us some of the major developments that you are observing when it comes to specific crops and products? Are there any hubs that we should be that we should be aware of? What are some of the places that are really making a name for themselves in the industry?

 

Matt Plavan  34:27 

Right, so what comes to mind? First and foremost, for me is the is technology and and we’ve seen a number of technologies come to the market that represent advanced breeding, or gene editing, and even GMO and I think what we’re seeing at the moment is a bit of a battle. And I don’t think there’s a surprise to anybody a battle between what is perceived to be GMO and non GMO and it’s highly politicized, in my view. And it is something that’s going to have to be worked out, in my view in the relatively near future, because there is a pretty significant anti GMO contingent globally. And that is an issue in and of itself. I think that there are a number of crops that would be classified as GMOs that are well established and embraced in many, many countries in the world. And then there are countries in Europe, for example, who are staunchly anti GMO, when you look at new technologies coming to the market, each country takes a view on whether that technology is going to be deemed GMO or non GMO. And in the strictest sense, I mean, we, I would say at Arcadia, bio sciences, we we view transgenic as what would be GMO. So transgenic is taking a gene from one species or foreign DNA and inserting a foreign DNA into the genome of another plant. And so there are other gene editing technologies come into the market or the bidding in the market like tailwinds and CRISPR, that are a form of editing within a genome and not introducing foreign DNA. So these, these assessments have a significant impact on the ability of these technologies to affect the efficiency of the the food supply chain and supply chain assurity, which are big issues in developing countries and every country but especially in developing countries. And so, you know, I think what is going to be interesting to continue to watch his analysts who predict in 2050, if we haven’t adopted GMO in earnest, we won’t be able to feed the global population, because of the reduction of farmable land and global warming and climate change. However, it’s proper to refer to it, we’ve got to embrace technology to to be able to satisfy our our food needs. And so that is, the big backdrop that is, is probably most relevant to biotech and biotech development. Within that, I would say that, you know, in the US, and in particular, in the US, we have a, you know, a more open, you know, mind to these new technologies, and embracing them provided that, you know, there’s good data to do so. But with CRISPR, and talons, and even our tilling technology, the ability to use advanced breeding to rapid prototype, innovation has as never been better. And I think that, as a biotech company, that is, I think in a leading position with regard to bringing some of these new innovations to market. We have, you know, high expectations that as consumers continue to demand, more nutritious, and clean sources of food, that these advanced technologies are going to continue to help us to satisfy that that demand. And as I said early on, that what we’ve done with wheat is truly phenomenal to take a normal serving of pasta that has two grams of protein, or sorry, two grams of fiber, and be able to deliver that same serving with nine grams of fiber without any exotic ingredients doing that intrinsic to the wheat. That’s a perfect example of a non GMO technology, bringing innovation to the market in a timeframe that is, you know, one 15th of what it was historically.

 

Jonathan Bench  39:12 

So Matt, I’m very curious about your your role as CEO, Arcadia is a publicly traded company since 2015. You became CFO in 2016. Now you’re a CEO. But what kind of challenges are you facing as a CEO of a public company? I’m just I’m very fascinated about this. You know what I’m sure there are some things that make your work very exciting some things that make it very stressful. I mean, including just navigating 2020 and how it went wrong for so many companies, you know, how have you navigated being CEO and do you think your experiences have been common to your industry peers?

 

Matt Plavan  39:49 

it is more challenging to innovate in emerging market or with emerging technologies as a public company than it is a private company because you are As Arkady his current situation is, you know, the company is on the cusp of becoming profitable, but has not been. And so we are wholly beholden to our shareholders from whom we’ve raised the capital to launch and, you know, initiate these, these growth plans. And so you develop a strategy and a plan, you obtain your board’s blessing, you know, and the board’s responsibility is to, is basically oversight for shareholders. So you make sure that you met your fiduciary duty to develop a solid and credible plan for value creation, you go off to execute. And in this kind of environment, especially when you have COVID, and those kinds of headwinds, adapting to those changes, and keeping your shareholders informed as a publicly traded company, is a tremendous challenge in and of itself, because you have to comply with disclosure laws, which are very, very specific, you know, although you’d like to bring everybody into the fold and just, you know, have town hall meetings every day to keep them up to speed on all the things that are evolving, it’s not quite that simple. Private companies have the luxury of being able to pivot without, you know, a pretty comprehensive communication cascade that follows that, we have that communication cascade, that takes bandwidth in time, so that it’s just kind of the flip, it’s the two sides to the public company coin, or, you know, public company gives you, as you know, gives you liquidity in ways that you don’t have as a private company, but there is a follow through, you know, accountability and, and communication, real time that has to go along with that public company. And so, it is something that I have been doing the last 20 years, and it is more art than science, there’s a lot of science, you know, the SEC has very specific rules. But you know, building relationships with shareholders developing and maintaining that credibility by being front and center, and, and being accountable to your wins and your losses. I think that’s a much more significant dimension in a public company, than it is in a private company. And so, in years like this, where you have a lot of headwinds, when you have a market that was expected to be a $16 billion market, that’s really only become a $2 billion market. That’s an awful lot of change in the market that you have to adapt to, as a company, to stay on track for the value creation that you’ve promised your stakeholders.

 

Fred Rocafort  42:44 

Matt, this has been a fascinating conversation, and we, we can certainly continue talking for for much longer. And as a matter of fact, there are questions that due to time limitations, we’ll we’ll have to remain unanswered for now, but we do hope to have you back. before too long. before we let you go, I’d like to ask you for any recommendations that you might have for us and our listeners?

 

Matt Plavan  43:10 

Well, you know, as a CEO of a public company, I will tell you, especially a small, nimble company, it’s all consuming. And that’s, that’s part of the the joy of of doing this. It doesn’t leave you a lot of time, the time you would like to be the student of life. But I will say that one of the one of the books or authors that I have found to be very influential for me, and I’m not a big, you know, business book guy. I don’t, you know, have a lot of recommendations, but one that that I found very useful some time ago, and I’ve used it a fair amount and had done so recently as I’ve rebuilt the team at at Arcadia is Patrick lencioni has written a number of books around corporate leadership and high performing teams. And the one I can think of that, that is has been most influential is called the Five Dysfunctions of a management team. And it is a fable but it is really a a great read. It’s quick read and it’s in it’s it’s basically the fictional company in the bay area that has the best management team, the best product, but they’re third in the market. And a new CEO comes in to address that issue. And the whole book is about the staff meetings that they have every week. And how the CEO assesses the team’s strengths and weaknesses and, and how she goes about fixing things. And I tell you, you read it, and you will say I know someone just like that. I know someone who’s just like that. Oh, and that’s me. And it really helps. To build what he calls first team loyalty, and, you know, the ability to be a cohesive and high performing team and, and he’s got the five temptations of a CEO. So there’s a few of them that he’s written and I’m sure people listening know, probably a lot more about his work than I do. But that’s one for me that that was a an entertaining read, and very, very informative instructional, and it’s, it’s served me really well over the years.

 

Jonathan Bench  45:29 

I picked something very much on point this week. It’s an article that was put out by New Frontier data on their Canada byte series, and it’s called Africa’s promising untapped potential for hemp production. So it’s a series of charts, mostly infographics with, you know, well researched information about Africa’s growing consumer market, which is going to increase by 2 billion people in the next 30 years. And then discussed, it was focused on on hemp, of course, and, you know, what, which countries are going to be looking at a medical market, you know, either domestic or international medical market, you know, to and from those markets and focusing mostly on hemp. You know, and Fred and I have had conversations lately with entrepreneurs from several African countries who have been interested in converting coffee crops, for instance, to hemp, learning how to maximize crop yield, looking for funding looking for technology. And interesting here for those who are, want more information. At this point, there are seven African countries who have to one degree have another legalized cannabis since 2017. So those are the suit to South Africa, eswatini, Rwanda, Zimbabwe, Uganda and Malawi. And so very interesting to kind of get a global, you know, bird’s eye view of what’s going on in Africa, and how it’s growing. And I think our work, and our inquiries over the last six to 12 months have really shown that there’s a lot of interest, both from inside the continent, and from others looking to access the continent. So a good article to check out if you’re interested, Fred, what do you have for us?

 

Fred Rocafort  47:07 

I’m a podcast listener, an avid podcast listener, as well as a podcaster, of sorts. And one of my favorite podcasts is Making Sense by Sam Harris, I find that the demand just has an incredible talent to distill complex issues in in a way that that makes sense. I think it’s a very fitting title for what he does. But his most recent episode number 230, to be exact, is titled, an Insurrection of Lies and he just does an excellent job of analyzing what happened at the Capitol on January the sixth. So I would urge everyone to to listen, I think that there is a perspective that he brings that is, I don’t want to say unique but but definitely not perhaps the the most mainstream of perspectives. But I thoroughly enjoyed this particular episode, even though of course, the topic is far from enjoyable. Just more generally, I’d recommend the the Making Sense podcast, I’m pretty sure that I’ve recommended other episodes in the past. But this one, this one definitely is worth listening to. So again, an Insurrection of Lies by Sam Harris. And with that, Matt, I’d like to thank you once again, for for being our guest. Thank you for your recommendation as well.

 

Matt Plavan  48:38 

Gentlemen, it was my pleasure, and I look forward to perhaps doing this again, sometime in the future.

 

Jonathan Bench  48:46 

We hope you enjoyed this week’s episode, we look forward to connecting with you on social media to continue discussing developments in global law and business. This podcast was produced by Harris Sliwoski, with executive producer Madeline Williams music composed by Steven Schmidt. Tune in next week for another episode. We’ll see you then.

 

Transcribed by https://otter.ai