Part 4 of the Thinking Outside the Box series
How $131 billion proved that “outside” isn’t always better
Canada legalized cannabis in 2018. Brilliant teams. Unlimited capital. A brand-new industry.
Five years later: $131 billion burned.
Why? Teams didn’t know their operational box. Inside, outside—no idea which walls could move.
The “No Box” Trap
Some firms acted as if cannabis was too special for business rules.
Their approach:
- No walls, no discipline, infinite market assumptions
- “Fast fish eat slow fish” → scale everything, own everything
- Random launches: cannabis water, CBD makeup, infused everything
Result: Wild bets, runaway costs, unsustainable models.
The “Fight Everything” Trap
Other firms wasted resources battling immovable walls:
- Regulatory compliance — identical for all players, not competitive
- Excise tax — uniform burden, lobbying was resource drain
- U.S. legalization timeline — outside Canadian control
- Consumer preferences — trying to “educate” that high potency ≠ quality
Result: Millions burned fighting walls that wouldn’t budge.
What Actually Worked: Editing the Right Walls
Survivors mapped their box carefully and edited soft walls that could shift:
Process innovation — yield, quality, consistency optimization
Operational redesign — automation, energy efficiency, scalable systems
Disciplined expansion — beverages and edibles as complements, not replacements
SR&ED leverage — documenting R&D uncertainty to recover costs
They respected hard walls (law, tax, consumer reality) while redrawing soft ones (process, efficiency, positioning).
The Universal Pattern
Every industry has its “cannabis moment”—a massive shift where teams either:
- Go wild → pretend there’s no box
- Fight everything → waste energy on wrong walls
- Succeed → map the box, respect hard walls, edit soft ones
Thinking outside the box doesn’t mean escaping it. It means knowing your box, naming its walls, and moving the ones that actually shift.
👉 In your industry, which trap is more common—ignoring the box entirely, or fighting the wrong walls?