After two years of land acquisitions, construction and all that sort of fun stuff that goes into launching a business, Sonoran Roots finally got its cannabis cultivation facility up and running in 2020 in Arizona.
But within the first week of its first grow operation, the future of the company was uncertain as government shutdowns and staffing shortages became widespread across the U.S.
After building a $10-million facility—and with so much riding on that first grow cycle—the Sonoran Roots leadership team had a less clear vision for the company’s return on investment.
“Everything happened two days after we received approval to operate,” Michael O’Brien, CEO and general counsel, says about the pandemic-related shutdowns. “Luckily three days after that we were deemed an 'essential business' because it was medical-only at the time, and I think that really kept us operating.”
Since then, the vertically integrated cannabis operator has been in a growth phase from its original facility in Mesa, to its Fifth Street extraction and cultivation facility in Tempe, and its third cultivation facility, also in Tempe, which includes another 35,000 square feet of operations.
In January 2021, when Arizona became the 11th state to launch adult-use cannabis sales, Sonoran Roots had about 50 employees. The company now has roughly 175 employees and will be knocking on the door of 200 as its new Tempe facility—dubbed the Roosevelt facility—becomes fully operational in early 2023, O’Brien says.
O'Brien
“We want to make sure that no matter how big we grow, whether we’re 200 employees or 2,000 employees, that we’re still able to maintain that culture and be a great place to work, and that [our staff] don’t just feel like a name or a number, but part of our family.” – Michael O’Brien, CEO and general counsel, Sonoran Roots
But when a company more than triples its workforce in just a couple years, sometimes competitiveness can take over among those hoping to move up or take on bigger roles within any given business. While Sonoran Roots supports worker initiative and rewards hard work, the company draws a line to prevent burnout, O’Brien says.
“There’s a limit to where we’ll even allow people to push themselves, because it’s obviously not healthy to just be at work all the time,” O’Brien says. “But we’ve had employees come to us and ask, ‘Would you be open to considering a pay raise for us if … we can handle the work ourselves [instead of filling an extra position]; would you be open to giving us a raise?’
“And I said, ‘Absolutely. Let’s give it a 30-day trial and see how it is.’ And they were able to handle it. Everybody got a nice raise and kept us from hiring another employee with benefits and put some more money in our current employee pockets. They know that we’re happy to share that upside with them.”
O’Brien goes into further detail about what makes Sonoran Roots one of Cannabis Business Times’ “Best Cannabis Companies To Work For – Cultivation” in 2023 and about how his own personal experiences have helped shape the company culture in this Q&A.
Editor’s note: This interview has been edited for style, length and clarity.
Michael O’Brien: We have seven total owners and five of us are actively involved in the business every day. Three of my partners were already in the cannabis business in one form—in dispensary, extraction and cultivation. I got brought in to do some legal work, because I’m a corporate attorney by background, in about 2018, and we decided to build a cultivation facility and then kind of merged several companies together into what is now Sonoran Roots. So, some of my partners have been involved in the industry since as far back as 2014.
TL: What kind of work culture do you try to create or foster at your company?
MO: We really try to create a culture of ownership with the employees where they feel like they’re partnered with us in the business. We have an informal company motto of “Work hard, have fun, do the right thing.” We always tell people, “We’re going have a great time here, but … the work has to come first.” If everyone’s working hard [and getting their jobs done], we can have a lot of fun. There’s going to be great opportunity for everyone. We try to find people who fit within that culture.
We’re really employee-friendly on the benefit side. We pay for 100 percent of all of our employees’ health insurance premium. We have a suite at the local NBA arena where the Suns play, and we give, like, 85 percent of the tickets to our employees for free. And that’s all food, beverage, alcohol included with that. So, we’re handing out those tickets to concerts, events.
We have a Culture Committee that we just started where we have a representative from each facility who has a direct line of contact with ownership in terms of what are people liking, what are they not, what are we hearing around the facilities that needs to be improved.
Some of the other things we do: We provide a facility lunch every week where we pay for lunch for the entire facility. We do product samples. I’m actually going around the facilities today and we’re doing annual bonuses, so we pay annual bonuses out to every single employee in the company, which is not typical in cannabis, especially the level we’re paying. It’s kind of like a form of profit sharing we do. We just take really good care of our people because we know how hard they’re working for us. So, I think the culture is great. It’s one of respect, but respect that’s earned from us being kind of in the trenches and side-by-side with our employees.
TL: What’s one quality every employee has to have to work for Sonoran Roots?
MO: Definitely integrity. There’s a lot of responsibility [given to our staff] working in these facilities, and we just tell people, “We’re always going to be honest with you.” Integrity is really doing the right thing when nobody’s watching. Everyone’s around product. I genuinely, and I feel like this is the attitude of the entire ownership group, we genuinely do not worry about our employees stealing from us because we’ve ... taught them the right way. "If you have a need, come talk to us.”
So, integrity is really important and that’s kind of the foundation of everything because we really try to empower our employees and not micromanage them. We want to say, “You can do this, and we don’t need to have our thumb over you the whole time,” right? “Neither does your manager. We trust you, and we want to give you ownership of these tasks and personal responsibilities so you feel the accomplishment, and it’s clear that you’re responsible for the outcome of that.” And I think integrity’s a huge part of that.
TL: You credit much of the success of Sonoran Roots to staffers, specifically your head of cultivation. Why is a positive work environment key for company success?
MO: I think it’s key for success because if you have people who don’t want to be here, then they just have that punch-in, punch-out mentality. Instead, we have to almost kick our employees out of the facility [at the end of the day]. They love being here and that sets the tone. It doesn’t matter what industry you’re in, work is work. It’s called work for a reason. You have to be paid to do it, right? You wouldn’t be there if you weren’t being paid. So, to make the best out of that when you’re at work and have that positive work environment I think is so critical, because you’re going get that extra 10, 15, 20 percent out of your employees, and [you will get long-term team members who are extremely efficient at their jobs]. One of the most expensive things for a company, and one of the biggest inefficiencies, is high turnover, and we have a really, really low employee turnover, especially for the cannabis industry.
The Sonoran Roots team has access to a company suite at a local sports arena with food and drinks included.
TL: When your team grows so quickly—more than tripling in less than two years—what can you do to ensure your workers stay happy amidst that growth?
MO: We always try to promote from within, and we definitely take seniority into account, but the best person for the job’s going to get the job. It’s seldom that we hire for new management positions from the outside. We typically will backfill at the entry-level staff. As a result, our employees have been able to see we have people who started as part-time contractors who are now heads of departments, and they’ve been promoted from contractor to trimmer to trim lead to trim manager to department head. When employees see growth opportunity, it keeps them motivated.
We always [remind staff], “It’s beneficial for both us and you if we can do this as lean as possible. If I have two people doing the jobs that it would take three or four people at another company, then we save money. That means I can afford to pay you more.” That is the culture of the work ethic; we’re not going to squeeze every last drop out of you without compensating you. We want you to have a good work-life balance.
TL:As CEO, where do you find your leadership inspiration for this company?
MO: I’m definitely paying attention to other leaders that I admire and their strategies and what’s worked for them and companies that I admire that we hope to emulate the culture. The other thing that I’m doing is I draw in my personal experiences from places I’ve worked, what I’ve liked and not liked. That’s how our group came together, too, is we really had that same kind of mentality. We want to take care of our employees and make sure that they know that, and that it’s them first before us. We really [try to evaluate and ask ourselves], “Is that how we would want to be treated? Are these reasonable expectations?”
As the CEO, ... my job is not to be the 100-percent expert at anything. [That's for] my department heads and the other executives [with more specialized roles]. I need to be a 70-to-80-percent expert on what’s going on and have good people in place. It’s your job to tell me the answer, and I’m here to support you and make it happen. It's a servant leadership mentality where I say, “I’m the CEO, how can I help you do your job?” My job [as CEO] is to enable all the people working for us to be the most effective and happy ... so that the company can thrive. Although we lead from the top down, we take an approach of, “As a manager, I’m here to assist you because you’re actually the boots on the ground doing the job and harvesting the weed, packaging the concentrates.” That’s what keeps the lights on in this place.
As CEO, Michael O'Brien says it's his job to assist Sonoran Roots workers, not the other way around.
TL: What's the best advice you've ever been given and who told you that?
MO: One of the best pieces of advice I’ve been given was by my dad. He would always say to me, “Luck is when preparation meets opportunity.” There’s not a lot of true luck in the world, and you look back at the times that you feel you were lucky and it’s typically a result of you being prepared for that situation and putting yourself in a good place to have an opportunity based on your work. I always try to live by that. If you work hard and you do the right thing, then good things will come, and you don’t have to rely on luck. Even though I’m Irish as an O’Brien, I don’t rely on the luck of the Irish. So, that's definitely a phrase that you’ll hear me repeat.
TL: What’s been your biggest business challenge with Sonoran Roots?
MO: I would say one big challenge was when COVID hit the U.S. hard and we started having shutdowns literally in the first week of our operation of the grow. That was scary and challenging to deal with. There was [little to] no access to testing, and people were unfamiliar with what the implications of COVID were and how to handle it. As a result, we had a lot of staffing shortages and [challenges] at the beginning. On the other hand, COVID was also very good for the cannabis industry [economically].
I’d say that the second biggest challenge, and the more recent challenge, has been the evolving market in Arizona. We went adult-use in 2021 during the height of COVID. Those two factors led to some really good times for cannabis, and the market has cooled off, as markets tend to do, about a year post adult use passing. Times are a little bit leaner now, but we prepared ourselves well for that with the structure we put in place and the efficiencies, so we’re still doing great. With that said, to see that market fluctuate so dramatically and trying to stay on top of [that change] has been a big challenge for sure.
TL: Are there any companies other than your own that you’re currently watching?
MO: In cannabis, we’re always watching the large multistate operators and [evaluating] the trends. Arizona is a state that has a large proportion of license holders who are multistate operators. This is where Harvest [Health & Recreation Inc.] was founded, which is now Trulieve, which is one of the largest cannabis companies in the world. So, we’re always watching Trulieve, Curaleaf, etc. I would say nationally, even though they don’t operate in our state, we pay attention to Green Thumb Industries [and a few other highly regarded operators]. And I think we pay attention to them less on what they’re doing operationally and more on what they’re doing as a company from that culture standpoint, because they have a really great reputation among those large companies as being a good place to work. We want to make sure that no matter how big we grow, whether we’re 200 employees or 2,000 employees, that we’re still able to maintain [our unique] culture and be a great place to work, and that [our staff] don’t just feel like a name or a number, but part of our family.
TL: What’s your favorite cultivar and why?
MO: I really like Joel’s Lemonade. Joel [Lundeen] is our head of cultivation, and that’s a strain that he created on his own. It’s a blend of three lemon strains and it’s sativa-dominant. Another one I really like is Grape Durbs, which is, again, a sativa-dominant. I tend to be less focused on potency and more focused on the terps and the flavor. So, the terpier the better for me because you can always [increases the] quantity if you're lacking potency, right? But you can’t always get a good flavor, even if something’s strong or has a high THC content. I personally view it more like a craft beer or a nice wine.
MO: One of the best jobs I ever had was when I was 17 years old in high school; I worked for a gourmet bakery with one of my best friends, David. It was one of the best because I got to learn new skills and see how a small, scrappy business operates. It was really hard work. We had to get there really early in the morning, two, three in the morning, and work 12 or 15 hour shifts on the weekends. I was making four bucks an hour at the time. But I got to work directly with the head baker and learn a lot of cool stuff, see how business works, and see that ownership mentality where it doesn’t matter what your title is or if you’re the owner. If a job needs to get done, it gets done. The owners would be there scrubbing dishes with us at two in the morning, whatever was needed to get ready for the day.
One of the worst jobs I ever had was being a telemarketer. I feel like the thing I hated the most, even more than the monotony, was not feeling like I had a great impact on the outcome. You just get hung up on so many times without even being given the opportunity to shine or make a difference. So, that was tough for me.
Another really good job that I had for my first job out of law school was at the corporate law firm of Skadden Arps, which is a large internationally recognized firm for mergers and acquisitions. To be around so many smart, accomplished people who work very hard, put in a lot of hours, that was the exact atmosphere and tone I was looking for as a young professional. It was great motivation for me as a young lawyer.
TL: Would you say those experiences helped you in your role as CEO, or more so shaped the philosophies for Sonoran Roots’ workplace atmosphere?
MO: I think those positions definitely helped me more with shaping the atmosphere and the culture of the company. A lot of the legal and business work I did before this shaped my skillset as a CEO and what I do in my day-to-day role. But seeing some of those other jobs where I’ve been there—in the staff-level positions and the physical labor positions, and knowing you want to have a voice with ownership, and how the work culture and environment can affect your productivity and how much you like your job—that was very impactful for me. I think those roles really shaped me in helping to create the company culture that we have here. Finally, my partners have of course been integral in that as well. We all have that same mentality of the employees come first.
