Don’t live someone else’s dream. Every industry has its own culture. But don’t let your industry’s power-players or their schemes define your own company’s goals. Lead your team to find your company’s sub-culture and live your own, unique dream. Take the cannabis arena — many who succeeded in the illicit marijuana market in the past, have now rushed into this new, legal industry. They want to play hardball and do quick deals. I’ve been in meetings where I sit back and observe the clashes of the two cultures. At 22Red, we’re all from the arts and manufacturing, and we started in the legal marijuana business from the very start.
As part of my series about the leadership lessons of accomplished business leaders, I had the pleasure of interviewing Harry Kazazian, CEO of 22Red. Kazazian has come a long way since his hair metal days playing clubs on the Sunset Strip. Having launched several multimillion dollar manufacturing companies over the last 3 decades, moving into the cannabis space seemed like the perfect marriage between his creative background and business acumen. Approached by old friend and System of a Down bassist, Shavo Odadjian, to launch a cannabis company at the onset of California’s recreational legalization, Kazazian knew he was up for the challenge of entering a new, somewhat challenging industry. Overseeing the growth of 22Red into new markets, Kazazian reflects on the company’s recent, hard-earned successes.
Can you tell us the story about what brought you to this specific career path?
When we first became friends in the 1990’s, I don’t think Shavo Odadjian or I could have predicted that I would become CEO of a company he would create! We were both from the Armenian-American neighborhood of East Hollywood, California. I was attending L.A. City College and playing in a metal band that I started with some friends, Iron Tears. We were a hair band having a good time playing clubs around the Sunset Strip.
Shavo is a multi-talented, creative force of nature, best known as bassist, songwriter and backup vocalist for Grammy-Award-winning metal band, System of a Down. I met him when System was starting out, through the band’s lead, my friend Serj Tankian. We shared a passion for music and a common Armenian heritage — powerful stuff that formed bonds of trust and understanding of one another.
Eventually I decided to hang up my guitar professionally, chop off my long locks, and pursue my other real passion — business administration. Over the years, I cut my teeth on setting up manufacturing facilities all over the globe for military apparel and outdoor recreational gear. As my operations grew, I became a strong decision-maker, ring-leader, delegator, and job-creator. Being a CEO actually came naturally to me.
This story starts coming full-circle here — Shavo and my nephew Mike Basteguian had grown up together, and a few years ago, Mike helped Shavo nurture his original vision for the 22Red line. Mike runs a fashion apparel manufacturing operation here in L.A. Then, along with their friend, entrepreneur Sean Oganesyan, the three of them came to me with their concept: To develop 22Red into a full-on lifestyle brand — where CBD, music and fashion meet.
They needed me as their business honcho — to run it as a professional organization and raise capital. Essentially, to harness our collective creativity, and turn it into a profitable operation. I was excited by this proposition and all its potential. Although certain factors keep me from consuming cannabis personally, I know it helps so many people — lowering anxiety, improving sleep, enhancing creativity, helping cancer and epileptic patients when nothing else can, and the list goes on. And I knew Shavo’s core value was to provide only the highest quality products. So I decided to join the venture and take the financial helm of 22Red. Shavo and I have since developed a great working dynamic, where we complement each other’s working styles. If we’re a ship, Shavo is the engine full of high-octane creativity, and I’m the rudder keeping us on course.
Can you share the most interesting story that happened to you since you began your career?
It’s actually one of my earliest experiences. While I was first starting out in manufacturing, I was working alongside my Uncle Manuel. It was 1990 when I met an independent military gear broker who desperately needed someone to make rugged military rucksacks for an American ally, the Kuwaiti army. The established manufacturers weren’t interested because the order was too small. And the broker needed them “yesterday” because the Kuwaitis were short on supplies and they were being invaded by Iraq.
I was still wet behind the ears, but I knew this was my big opportunity to show my uncle I could hustle, make some money, and even help the U.S. win the Gulf War. I took on the job and somehow patched together enough sewing operators. I delivered. Then a few weeks later, I was watching the news with my family. The Gulf War battlefield was beaming live into our living room. It was Operation Desert Storm. Suddenly I saw the Kuwaiti soldiers with their rucksacks. I yelled out, “I made those!” What a rush.
Are you able to identify a “tipping point” in your career when you started to see success? Did you start doing anything different? Are there takeaways or lessons that others can learn from that?
Our first tipping point for 22Red came this July, when we reached our first benchmark — expanding from California stores, to launch in stores in Las Vegas and other parts of Nevada, and in Phoenix and other Arizona cities. 22Red has been really well-received in those states. A second big tipping point is actually happening now. Based on our current capabilities, we’re getting an abundance of requests from other states where marijuana is legal, and we’re also selling CBD products.
What we’re having to do differently, is adapt our model to all the various laws and business practices that are different in each state. It’s a complex navigation. But most everything else we’re doing the same, as our overall business plan is working well.
We’re making certain that our growth is measured, not too rapid. Shavo and I and our entire team believe that above all else, we have to stay focused on making sure our brand remains premium. We’re not going to compromise our high standards or our strong foundation, just to increase revenue more quickly.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
One of the funniest mistakes I made early on, was assuming that the legal cannabis business community follows professional norms. I still laugh when I think back to our first official 22Red meeting. The team we pulled together are all really smart, effective people. Now, I’m a pretty casual dresser at work, but even I was shocked when many of them arrived in flip-flops — which they soon kicked off to go barefoot. On top of that, I quickly learned that they have a meeting ritual — the highly respected “smoking break”. I had to quickly recalibrate and pivot accordingly to run the meeting.
Our team is made up of close friends and business associates, mostly from the Armenian-American community. They’re accustomed to holding meetings “family style” — talking over one another and spontaneously expressing themselves with no filters. Meetings that should take one hour were taking four hours. We had to create order. So in came the “talking stick”, where the only one allowed to speak is the one holding the stick. It worked perfectly, and eventually we all got the flow of the way meetings should be conducted. We were able to ditch the talking stick soon after.
So from this, I learned to pick my battles — forego the small stuff in order to get the important stuff done. One of my jobs as CEO is to keep our crew of highly intelligent, inventive people focused on carrying out our business plan, without stifling their creativity.
Are you working on any exciting new projects now? How do you think that will help people?
Yes, I mentioned earlier that we’re now getting requests from all the U.S. states where cannabis is legal, and we’re considering which ones to pursue first. We’re sticking to our blueprint of slow growth. To ensure the highest quality products, we’re resisting the temptation to go into all those states at once, but we’ll be in some terrific new locations soon.
And, we’re excited about our new gear project. 22Red is collaborating with HEX packs to produce a beautiful line of carry bags that are scent-proof, so they won’t reveal that you’ve got cannabis or CBD inside. HEX is a leader in creating advanced technical materials. We became really impressed with HEX’s new anti-microbial pack collection that’s launching soon. So together with HEX, Shavo designed sniff-proof 22Red bags that look and feel phenomenal. They’re scheduled to come out next year.
What are your “5 Things I Wish Someone Told Me Before I Became CEO”? Please share a story or example for each.
Here are 5 Things:
1 — Your company is your “baby”, but it will never compare to your human children. I have three terrific kids. And along with my amazing wife, they all keep my business life in perspective. I’ve realized that my company will continually have growth phases, but my kids will be young only once. Stay true to what’s most precious to you. You can have both a great family and a great business. Just focus on a ‘healthy balance’ and the answers for ‘how’ to get that balance will come to you.
2 — Don’t live someone else’s dream. Every industry has its own culture. But don’t let your industry’s power-players or their schemes define your own company’s goals. Lead your team to find your company’s sub-culture and live your own, unique dream. Take the cannabis arena — many who succeeded in the illicit marijuana market in the past, have now rushed into this new, legal industry. They want to play hardball and do quick deals. I’ve been in meetings where I sit back and observe the clashes of the two cultures. At 22Red, we’re all from the arts and manufacturing, and we started in the legal marijuana business from the very start. In our earliest days we decided on 22Red’s unique dream: To deliver the highest quality product; educate people on the mental and physical benefits of cannabis to so many; and celebrate the creativity in all of us through cannabis-inspired music, fashion and culture. It’s not easy to lay the foundation for your company’s dream but once you do, it’s really satisfying to work towards it, as it’s all your own.
3- Be Actively Involved in Branding Your Company. Branding is one of the most crucial sets of decisions you’ll make. Invest in developing your brand story and make it clearly tellable. I’ve discovered that branding is truly the promise you make to your consumers, your employees, and your stakeholders. Our strong branding of 22Red has brought so much value to us, because it has led to our consumers trusting us, being enthusiastic about us, and seeking us out. So personally commit to going through the long and thoughtful process of branding your company. You’ve got to base it on your genuine values and capabilities, so that you can keep your promises to your communities.
4 — It’s not possible to ‘expect the unexpected’. I don’t think human brains are wired this way. In running my previous companies, I was taken by surprise on so many occasions. Bandits at my factory in Mexico. A deadly tornado at an outdoor business event in Utah. Fighting with DC politicians who were against saving my American factory from having to close down. I’ve survived it all, and you can too. Just be nimble and have the attitude that whatever life throws at you, you’ll figure out a way to handle it.
5- Master the art of dealing with different personalities. When you head a company in a high stakes arena, you’re encountering lots of egos and personalities. I call it the “persistent pain of the personalities.” In my over 20 years of heading companies, I’ve had numerous department heads answering to me at once. The trick is to deal with them according to their individual temperaments, motivations and management needs. Remember that you selected this team for a reason — each for their particular talents and unique value they bring to you. Sometimes their personality quirks will drive you nuts, but you can find ways to work with each one to get to your goals.
What advice would you give to your colleagues to help them to thrive and not “burn out”?
I always advise people to view their business as a marathon, not a sprint. For example, many people rushed into the legal cannabis space but then got impatient and just gave up. Or they blew through their money and they’re no longer in business. At 22Red we see that many of our colleagues want to move much faster than we do. But we’re taking the time we need to build a solid foundation for profitability.
And in order to keep thriving and not burn out, one thing that works is — setting a series of smaller, short-term goals. Then celebrate those incremental victories with your team, and encourage them to reach even higher. When they fall short of their goals, make sure they’re taking it as an opportunity to learn and improve rather than getting discouraged.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
Nobody has helped more than my parents, to get me where I am today. They taught me to work hard and smart, and not let obstacles get in my way of reaching my goals. They bravely survived the brutal communism of the Soviet Union under Stalin. My dad was imprisoned in Siberia for purely political reasons. Fast-forward to the 1960’s when they immigrated from Armenia to America with four children. We lived happily in our East Hollywood, California home. My dad started with nothing, worked janitorial and construction jobs, and eventually owned and developed real estate. He was able to put all his kids through college. When I started my first apparel manufacturing business out of our garage, my parents gave me the seed money to get it off the ground. I knew they believed in me and were entrusting me with their hard-earned money — not a small amount. There was no way I was going to blow it. I was determined to make them proud. Next, I opened a sewing operation in the garment district of Vernon, and my mother happily worked with me, supervising the sewing operators. That was just the beginning. Over the years I achieved substantial success in many enterprises. But I could never have done it without the work-ethic my parents instilled in me, the investment they made in me, and the unwavering faith they had in my abilities.
You are a person of great influence. If you could start a movement that would enhance people’s lives in some way, what would it be? You never know what your idea can trigger!
Because most of 22Red’s executives are Armenian-American, we derive so much inspiration and energy from our Armenian homeland. We’re all into the arts and the great outdoors, so we’ve involved ourselves in a remarkable organization called Hike Armenia (hikearmenia.org). It shares Armenia’s ancient, natural beauty with the world, and stimulates the country’s economy by promoting thoughtful eco-tourism. In support, we’ve collaborated with HEX packs on the Adventure Armenia travel gear collection, co-designed by Serj Tankian, Sako Shahinian and me. We donate sales proceeds to Hike Armenia. You can see the gear capsule and our videos that illuminate the project at https://www.hexbrand.com/pages/adventure-armenia.
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This was very inspiring. Thank you so much for joining us!