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Tokyo Smoke Case Analysis


February 25

Summary Of Facts

The Canadian government had allowed LPs to produce medical cannabis on an industrial scale and to distribute it for medical and recreational use. Forty countries in the world had some form of decriminalized cannabis. Nearly 35% of the global population, or 2.7 billion people c, consumed cannabis in some form around the world. The industry in the US alone generated revenues of more than $5 billion per annum and was growing at 20% year on year, 133 million people in the US, or 30% of the US population was using cannabis. Tobacco usage rates were declining. Medical cannabis was purchased based on outcome-based logic, while recreational cannabis purchases were influenced by emotive factors. 22% of Canadians used recreational cannabis on a regular or semi-regular basis and another 17% would consider trying it once it became legal. Cannabis had an established customer base of 35% of the global population and 25% of the Canadian population.

Recommended Actions

I believe that Gertner has a strong but extremely risky business venture on his hands. When he started his company, cannabis was just getting deregulated in Canada. Now, it is obvious that the majority of the North American population is coming around to legalizing cannabis. All the facts presented are a strong argument to present to potential investors. These are all facts at the time when cannabis was just being legalized in Canada. Therefore, he should emphasize on the potential growth of this market in coming years. People love to drink to have a good time, to socialize, etc. Many people do not like to drink but would prefer some other form of intake for socializing and having a good time. Tokyo Smoke could enter into this market. Another reason he should explain to investors on why to invest in him is the lack of competitors at the time. He seems to have discipline and a good business plan following his job at Google (the business with the majority of online data). HE can potentially use information from his previous job to discover new markets other competitors didn’t know were there. His father has been in the cannabis industry for long before he was therefore, he has someone to direct him in the right way.

Problem Definition:
Alan Gertner needs to decide how he will present his business to potential investors to maximize the value of his company.

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