Article by Phil Wong, High! Canada
Haven’t heard of Cannabis Wheaton? Not that in to the Canadian Cannabis scene? Then you probably haven’t heard of Hugo Alves, Chuck Rifici or Michael Lickver?
Over the last lile while, the Canadian Cannabis landscape has exploded overnight. Some expectaons from the fir st year in cannabis sales were specula ted at $22.6 billion a year. I think that esma te is low given that the stock acvity al one has been unheard of ; aggressive take – over’s, mer gers and acquisions almost on a daily basis. If I had to guess, I would say those numbers should be doubled! Here is wh y, Canada is pr ey much sll in its in fancy s tage, there are tons of things that the census probably did not account for, like supporng mark ets rela ted to cannabis; growing, edibles, farming infrastructure and the fact that Canadians love their cannabis! And right now, that’s something a lot of them may not be adming to!
When the new Cannabis market started, there were only a handful of LP’s and few related services trying to get a jump start on the industry. One of those early services was legal services by Benne Jones. Today, we are fortunate enough to sit with two of its early pioneers of the industry, Hugo Alves (President, Cannabis Wheaton) and Michael Lickver (Execuve Vice-President, Cannabis Wheaton) and get their perspecves on looking back. How did you get your start with Bennett Jones?
I got my start with Bennett Jones in 2004 as an Associate. I was recruited to go there, I was at Heenan Blaikie before that, another large downtown Toronto irm, for four years. So, I went there as a young corporate associate and was there until I left in August of 2017.
When did you meet up with Michael and Chuck?
Mike and I met because he was an articling student at our irm and all articling students are assigned mentors, and when they come back as irst year associates they often keep the same mentors and pick up de facto mentors along the way. So, I was Mike’s mentor when he started as an Associate at the irm, because we got along really well personally when he was a student and we often worked together on projects.
Mike and I met Chuck when we decided that we were going to try and build a legal practice around cannabis. Mike and I saw the regulatory change unfolding, read the proposed regulations and wrapped our heads around it. We realized the new regulations were going to create an industry, so we decided to go after it! We got smart about it, tried to take up a thought leadership position, tried to meet as many people as possible and network and, of course, tried to have fun while doing it. Chuck was one of the irst really major industry participants that we met when Mike and I attended the Tweed ribbon cutting ceremony in Smiths Falls.
So who came up with the idea?
You know it was one of those things where we saw the change in regulation, Mike had some clients that were poking around the space trying to raise money for a cultivation project and we just decided that we wanted to be involved, we wanted to participate, we wanted to help others get involved. “Whose idea was it?” I think it was a joint idea. I think I said ”Mike I think we should build a business around this?” And he said “That would be very cool, how do we do it?” and we just kind of brainstormed. I’m older than Mike and have had the beneit of having mentors of my own who I watched build signiicant businesses within the law irm around sustainability, emissions trading and renewable energy projects so I had some frame of reference. I had helped those mentors build those businesses and now I wanted to try to do it with Mike. We thought that it would be a very interesting project from both a professional and personal perspective as both Mike and I have always both been very pro cannabis, as you know we love it! We are lifelong cannabis advocates, so it was very natural!
Take us back to the early days, when you faced stigma, how did you overcome it, especially working in a corporate law irm?
As lawyers, we are almost programmed to follow all rules strictly – it’s almost against our nature to do things that entail a lot of risk or that may be looked at negatively by our peers. Throughout the years, you meet clients who tell you, “Let’s just do it! And if we get into trouble we will just deal with it then”. And I’m not talking about outrageous things like breaking the law, I am talking about things where there is some ambiguity as to whether or not you’re allowed to do something – instances where the best you can do is take a position that you think is justiiable and then defend it. That is generally not a comfortable place for lawyers to be as we are conditioned to try and mitigate risk. We like clear rules and obligations. We want certainty that what we are doing or what we’re helping our clients do is permissible. But we had to take a very different approach when we decided to build a legal practice around cannabis. We were working in a big Bay Street irm, with lots of partners and clients whose views were probably a lot more conservative than ours. And to be quite honest with you, you have to be respectful of that. There are over 200 partners at that irm that also have livelihoods that depend on keeping their clients and their relationships happy and we didn’t want to negatively impact any of them. We had to be respectful of those clients and relationships and build our business in a way that was professional and didn’t negatively impact our colleagues or clients.
So, the approach we took was to be professional, thoughtful and discrete, but just do it! We always tried to exercise good judgement when considering whether something we were doing might impact the irm, but we never asked for permission because we didn’t want to risk the irm telling us not to try and build a practice around cannabis. It was very much a “I would rather beg for forgiveness later than ask for permission now” type of mentality. So we just went after it and always tried to act responsibly towards the irm. We were always mindful of our obligations to the irm. Mike and I were still working 2000+ hours a year, doing our regular law irm work – working for clients in the renewable energy business, technology business, venture capital and private equity funds, etc. – we continued to do our normal Bay Street law irm work – and then it was like we had another full time job that was just as demanding trying to build our business. So, we were working 2000+ hours a year doing normal billable work and then another 2000+ hours a year trying to build a business around cannabis. It was a huge investment of our own time and that is the thing that I think most people who look at Mike and me now and ask us how we did it or congratulate us on getting “lucky” don’t understand – the level of personal sacriice and risk that was entailed. We didn’t get lucky; we just worked a lot harder than everyone else.
At the beginning of this industry, it was not like it is today where you have companies that are worth 4 or 5 billion dollars. It was very hard for companies to get money, and if they got it, it was really precious as it had to be spent on expensive things like building facilities. We were prepared to put ourselves out there and offer our skills and our advice to lots of people who at the time could not pay our Bay Street fees and didn’t know if they were ever going to be able to pay. But we believed in what we were doing, we thought that the cannabis industry was going to be huge and knew that building genuine relationships always yields good things over time. So we worked for whatever people could afford to pay and we viewed it as an investment of time that we were happy to make. We met great people, worked on interesting projects, learned a ton and built our reputations. As the industry got more attention and the money started to low into the industry, all of our hard work paid off.
Our model was simply to build a network, work hard for the network, and eventually the network would repay that hard work and that is exactly what happened. Of course, eventually, as we got traction, lots of people at the law irm discovered what we were doing. Some people were supportive and some were nay sayers. They didn’t take us seriously, and we had to deal with a lot of jokes about us getting “paid in product”, but it never deterred us from our desire and passion for participating in the industry. In fact, it only motivated us more. There were lots of times when we would sit there and ask ourselves “Is this going to work? Have we made a huge mistake?” but we sucked it up and just kept putting in the work. We were motivated to attack each day because we were meeting incredible people, who were doing amazing things that they were super passionate about it. That really drove our belief that we were on the right path, and we just had to keep working hard and putting one foot in front of the other every day. Very often one of us would walk into the other’s ofice and say “today we are one day closer to meeting this person, or doing this deal than we were yesterday” and then we would just put our heads down and work.
Did you have any scary moments where you thought you committed career suicide?
Yeah, lot of times! There were a lot of scary moments when I thought that going down this path was reckless, that it was putting my career and my family’s stability at risk. I think it was most tenuous around 2014, when we were dealing with a very conservative government that wasn’t very supportive of the medical cannabis program. But we never lost faith. There was never a point in time that we thought about stopping. Like most things in life, anything that is worth doing is going to have ups and downs and there were plenty of times where things didn’t go our way – we didn’t get invited to something, didn’t get a mandate that we wanted, etc. – and those things are always discouraging but we’re professionals and understand that things can’t go our way all the time so we just moved and continued to work. I inherited a very strong work ethic from my parents and I think that’s one of the things that has been fundamental to my success – I’ve always been good at not dwelling on things and I don’t give up. I just keep moving forward and believe that the harder I work, the luckier I get and that if you are genuine and honest in your work good things will come of that.
When did you have your “Aha” moment when you thought things were going to be alright, or exceed your expectations?
When the federal Liberal government was elected. When I was a senior associate at the law irm I helped one of my most important mentors build a very large international emissions trading practice. This was back in 2005 when Canada was still a part of the Kyoto Protocol and was supposed to take a leading position in the global emissions trading system. But then the Harper government was elected and Canada’s commitment to climate change mitigation and participation in emissions markets changed. Harper’s government backed away from Canada’s Kyoto Protocol commitments, and then the economy had a major setback in 2007-2008 and any remaining political will towards climate change evaporated. People were worried about the economy, not the climate, and the Harper government was happy to accommodate those changing priorities. I learned lots of valuable lessons during that time including how important political will is for the success of a market that is based on underlying regulation, how it ties into risk, opportunity and capital. So for me, the “Aha moment” was when Justin Trudeau was elected, that’s when I knew that there was enough political will to really accelerate the cannabis industry. When Trudeau was elected, in part on part of the platform of legalizing non-medical use, that’s when people started to go “Well maybe this isn’t such a bad idea?” and we deinitely saw an uptick in interest, new players looking to enter the market, other professional services irms looking to participate in the sector, etc. That’s when I knew that, unlike my experience in emissions trading, the political will was going our way.
How was departing Bennett Jones? Was it rough?
Departing Bennett Jones was a very dificult decision for me. To put it into context, by the time I left, I had one of the fastest growing practice at the irm, I had a very large book of business that was entirely originated and owned by Mike and me, for a private practice lawyer that is really the pinnacle of where you want to get to in your career – to own a large book of business and a stable of loyal clients, clients who rely on you not just for legal advice, but for business advice. That was what Mike and I were able to create for ourselves over the course of 5 very hard-working years. And, of course, with that comes inancial rewards and I was very well compensated by the irm. Professionally and personally, life at the irm was fantastic – I worked with tremendous people, many of them close personal friends that I have known for over 20 years. So, to take myself out of that very stable, friendly and secure environment and jump into something different that entails a lot more risk was a dificult personal decision. But even though I was really, really happy at the irm I have always had a desire to see what it would be like on the other side of the table. When you make a living giving other people advice, you sometimes often wonder “What would it be like if I was the client?”
I have had lots of opportunities over the past 5 years to leave private practice and join clients in their businesses, but the timing never felt right. I wanted the cannabis business at Bennett Jones to succeed before I made any decisions and then it would have to be a spectacular opportunity. What ultimately swayed me to join Cannabis Wheaton was that I really believed in the business model,the management team that was assembled were all people that I had a huge amount of admiration and respect for. After a lot of introspection I determined that I didn’t want to wake up 2 years later, look in the mirror and regret that I didn’t take the opportunity. I concluded that if I wasn’t willing to take some risk on this opportunity, in an industry that I was so passionate about, with a group of people that I respected, then it was very hard to envision a set of circumstances where I would be willing to take a risk and leave private practice and that was a very sobering thought. After deciding that I was going to take the plunge and join the Cannabis Wheaton team, I went and spoke to the irm’s managing partners about my decision. It’s not the way a transition out of a law irm usually happens, but I did it out of respect for the irm and because I thought it was the right thing to do. I wanted to tell the managing partners what was going on in my life and, most importantly, to work with them during the transition so that we could ensure that my leaving the irm didn’t negatively impact my colleagues, our clients and the business that we had built together.
Our clients were always irst and foremost in our mind and we wanted to make sure that they were well taken care of. I put together a transition plan and then worked very hard with the irm to make sure that my colleagues who supported the cannabis practice and our clients were not negatively impacted by my transition.
The departure from the law irm was very positive. In fact, this past October I was invited to the irm’s annual partners’ retreat where the irm took the unusual step, honouring me as a “Retiring Partner”. I’m far from being retired, but it was a very kind and thoughtful gesture and a way for the irm to convey its thanks to me for a wonderful career there. I have nothing but good things to say about Bennett Jones – incredible people, incredible clients and a wonderful place to work.
What do your parents think of your career choice?
My parents are irst generation immigrants from Portugal. At irst they weren’t thrilled, but they trust me. I took advice from both parents and they were supportive but very worried. They were worried about me leaving behind the stability and the impact that this could have on my ability to provide for my family – things like that. But they were very supportive – they knew that it was a decision that I had given a lot of thought to and they trusted my judgement.
Congratulations on winning the Start Up of the Year Award for Wheaton Income, as you guys are always in the news. What can we expect from you guys for 2018?
So many cool things! I am super excited to come to work every day because every person here is very proactive and passionate about what they do. I think what you are going to see from us in 2018 is that we are going to start executing on a lot of the projects that we have signed up, plus we are going to do some interesting things on the brand building and community building front. It’s going to be an exciting year! Stay tuned!