Embracing New Challenges with Michael McCartin

Foreign.

Welcome to this week's Treasury Career Corner podcast where I interview treasury professionals.

About their treasury careers.

Each and every week I talk to them about how they've built their careers, where they are now, where they see both themselves and the treasury profession going to next. Let's get on with the show.

In this week's show I'm joined by Michael McCarten, the Director of Global treasury at Curealeaf. Curealeaf is a leading international provider of consumer products in the cannabis industry with a mission to improve lives by providing clarity around cannabis and confidence around consumption. High growth company known for quality, expertise, reliability and you know, we're going to talk actually about the group's roots literally and there's no funny businesses around there. Mike's going to actually take it, Michael's going to take us through that a bit later on in the show. But first of all we're going to go right to his origin story and where he first ever started finance degree and then you discovered a later stage Treasury. So Michael, if you would take us back through your history. Sir, back to you.

Great, thanks Mike. Great to be on the podcast. So my treasury career started at David's Bridal. Prior to that I had achieved my bachelor's degree in finance from Chippensburg University. I spent roughly six years at David's Bridal. David's Bridal was one of the leading wedding dress providers in the country. When I started there it was owned by May Company. May Company after a period of time was purchased by Federated. Federated large department store chain decided they didn't want anything to do with the bridal store business. So they spun off David's Bridal to lender Green and Partners. Private equity based company.

You're a, you're a guy in a bridal firm and stuff like that. Was that, was that just more a retail type firm, you know, for yourself or.

Yeah, it was actually a retail type firm. Coming out of college I didn't really have said job so I was actually working through a temp agency in the sales audit department. I was doing that for about 10 months. After 10 months I was hired full time. From there I moved into FP&A for a short period of time. And as I mentioned, David's Bridal was purchased by Leonard Green and Partners. We had to implement a Treasury group at that point. So they hired a gentleman by the name of Phil Galvo who was the treasurer of cvs. And being that the company was going through some restructuring, I was offered the role in treasury as a Treasury analyst. So at the age of 24, I was managing the Treasury Department, setting cash positions, managing investments. At the time, David Spryllo was very cash heavy business. So at peak times I was managing commercial paper investments and money market investments up to $125 million. After June July, the company would tend to go through a cash burn as all the weddings have happened and we would have inventory for the following year. So I did that for about six years, partnering with tax store operations, loss prevention. Super interesting role because you got to partner with so many different departments, especially loss prevention. You know, working with them was unique to say the least. We would catch individuals trying to forge their bonus and looking at individuals with, trying to make their payroll hours and you know, shaving time off time cards, even having inventory going missing, working with loss prevention on that. So that was kind of a wake up call to me early in my career as to what treasury can and can't get involved in. And really because you're touching cash and every, you can get your fingers in anything and everything and obviously a good.

Basis role to then give you that start in Treasury, I say absolutely. And then, you know, I know that then followed that you then studied CTP and stuff. But then walk us through how you progress from there. And I think, you know, we were just talking before Microsoft, how much detail. I said, well, actually you've got some really interesting roles because some of you guys listening today you'll be in similar position. You'll be a Treasury analyst wherever you are. And now Michael is the global treasurer with his group. So this is a great way to not sit there and think, oh, this is what I'm going to be doing actually. Yeah, this is what you're doing now. But it's about what you do with it. Exactly. As you've talked about, you broaden the role. You didn't just sit there, turn the hand or do the job and then walk away. But then you sort of made some progression. Talk us through the next couple of moves. What happened then?

Sure. So then after my time at David's Bridal, I made a move to an FP and a role that was with Catapult Learning. Catapult Learning is a remedial services education company based out of New Jersey. So what they do is they help bring students up in grade level that have been left behind. So reading math, I'm sure there's some other subjects there I'm forgetting. It's been a little while since I've been there. I was there for two years working on budgeting. And forecasting, working with field operators, setting their, their payrolls, budgets, looking at how they can improve things, operational efficiencies. And I was there for roughly two years. What happened there was again, company was purchased by private equity. And not to say that my role was going to be eliminated, but I wasn't feeling the warm and fuzziest there. So I decided to make a move and I made a short term move from there to Morgan Lewis and Bacchus from there. I was there for a few months and then I had a really exciting opportunity come across my desk. I had a recruiter reach out to me about a Treasury analyst role at Preferred Sands. The company was exploding in growth. This is in early 2012, where the energy market was kind of going gangbusters. It was an opportunity where, you know, the company had quadrupled in size in the span of a year. They had grandiose ambitions to buy the Philadelphia oil refinery refining plant because Preferred Sands, they mine sand for fracking. So the goal was to a straight through process where, you know, you're providing the sand, the companies, you're providing sand to go through fracking, extract the oil and natural gas, they sent the refinery and that preferred wood on that refinery and that refined all that fuel for resale. Unfortunately, my time there was relatively short because the energy market decided to not continue to go gangbusters there. The energy market in late 2012 or mid 20 to late 2012 went belly up and I unfortunately was let go. To all you working professionals out there, yes, it happens to the best of us. Not to say that I'm the best of us, but yes, it does happen to everybody. You know, there's not anything you can control about that. So, you know, just focus on what you can control from there. I was unemployed for roughly two months. I ended up with a role at Teva Pharmaceuticals, which is one of the longest tenured roles in my career. I work with some great individuals there. Tom Dimitropoulos, Frank Kimmick, who is the treasurer of Warner Music, Frank McGrail and John McNanny, actually the largest treasury group that I worked with there. We were responsible for U.S. and Canadian treasury operations and Teva being the largest generic drug manufacturer, we would service 18 billion a year in cash flow annually while I was there. When I started, they were running a three week cash flow forecast. We pushed that out to five and then we implemented a 13 week cash flow forecast for end of quarter cash reporting. As many of you treasury professionals know, the CFO always wants to know where your cash is at the end of the quarter so they can give good numbers to senior management or Wall street if need be. So we really honed in on that, working with ar, tax operations, collections to make sure that, you know, we had the best numbers we could possibly have. Teva being a global organization, you know, that's kind of tough to do. But with the US being the majority of that, we did the best we could with the tools we had, as many of you listening probably use. You know, we were using Excel exclusively. We didn't really have a Treasury workstation. Even now in my current role, we're using Excel. So for all of you out there that don't have that experience, believe you me, there's more companies still using Excel than there are treasury workstations.

I know the Teva Group. Can you just explain who Teva Pharmaceuticals are or where at the time and stuff?

Sure. Teva Pharmaceuticals is an Israeli based generic drug manufacturing company. When I was there, they had a branded drug called Capaxone which was from Ms. That was their branded drug where the margins were great. You know, it's the equivalent of Keytruda or branded drug Pfizer or Merck or AstraZeneca. That's where Teva was really making their money. And Teva was growing through acquisition. So they were acquiring smaller phase two, phase three startups or companies going through that to get those drugs across the finish line and then have that exclusivity for that. Believe it's 15 years, but really by the time the drug hits market, it's roughly seven years. That's kind of how Teva operated when I was there. When I was there, I think we went through nine acquisitions, some larger, some smaller. Some of those acquisitions didn't really pan out. There were at least three that where the drugs, as far as I know, did not necessarily hit the market at the rate that they thought they were going to.

And with yourself, you came into this role, integral role, working with senior guys ever headquartered over actually in Israel, as you said, you know, what was it like as it grew and developed? Because your role there grew and you then started a senior analyst, then grew into the treasury manager role. How did you see it evolving? What did you, how did you put yourself in that situation?

Honestly, I wasn't sure how it was going to evolve. The great thing about the group I work with is that they were all great people then. They were all willing to help me being the youngest there. Frank Kimmich and Frank McGrail, John and Tom all took me under their wing and showed me what they were working on. So really my goal was to try and become the jack of all trades and be able to do everybody's role in the event they went on vacation. Trying to make myself as indispensable as possible, being especially that I had just come from a company where I was let go. The first part was getting the forecasting piece down. Obviously, you want to know where your cash is this week, next week, the following week. When you get out to five weeks, it gets a little fuzzy. But the big thing for us was to download that so we could provide good numbers for our parent company in Israel, remit them cash, because the US was the main cash driver for the company. But from there, I worked with Frank McGrail. We worked on an FX project where we bid out, or FX. We actually implemented a solution called Bloomberg Go, where we went to all of our partner banks, of which I think we had 20, and we said, hey, we need you to tighten the screws on your FX bidding process a little bit and we're putting you all on Bloomberg Go. And they said, okay. When I first started there, we were using PNC exclusively, and they were charging us 2% above market rate for our FX, which for those of you in treasury know that's quite a bit of cash from there. Once we implemented Bloomberg Go, we got everybody there. Our FX rates for our larger trades were between 2 and 3 basis points for all of our trades. We got no more than seven as long as we were going through the Bloomberg Go platform. And this amounted to roughly $3.2 million in savings for the company, which was huge for us. I mean, it was just an easy way to. To put money back into the company without having to do a whole lot of work. It was still the same thing we were doing. Yes, we had to enhance our processes a little bit, but it still allowed us to show the value of treasury and that, you know, we're not just a cost center. We can help reduce costs, we can help improve efficiencies, and there's a lot more that we can do other than just, you know, providing forecast numbers for. For cash.

And so you were with Teva, what, six years? Time for the next move progression? What happened next?

So I was with. You're right, I was with Teva for about six years. And what actually happened there is we made an acquisition that was not great for the company, and they brought in new senior leadership and they decided to move the company to Parsippany, New Jersey. I was not necessarily offered my job, so I Decided that it was time to look. So I ended up with a company called Scicom. Scicom was a small family run company that was actually just purchased by private equity a few years prior. They did front, middle and back of house AI for restaurants and quick service food locations. I was there for a short period of time because lor the private equity company that owned them got an offer that was four times what they paid for after two years. Obviously I don't fault them for taking that. If you can make four times your money in two years, you obviously take that a hundred percent of the time. Being in treasury your job is usually one of the first to go. You attacked. So I was let go pretty quickly. From there I joined a company called Suez Water which is based out of France, large water provider across the country. I was only there a short time because I had an opportunity coming across my desk. So I joined the company LifeScan which was a JJ Diabetes Division carve out as the one of the managers of Global Treasury. There were three of us, gentleman by the name of Barry Sannen who is the director of treasury and another colleague Ivana Jones who was a manager of Treasury. The company was essentially one and a half to $2 billion a year in revenue startup because it was carved out from J and J. So we all worked together to stand up this company from the ground up. There were some consultants in place earlier that had stood up some of the major countries like the US and Canada. And then Ivana and I worked together to stand up the European Union, putting all accounts in place, making sure that we had sweeps in place, doing intercompany loan documentation, working capital loans, setting up accounts, bank resolutions, the whole nine yards. Super interesting. Also an opportunity to really get involved globally for the first time. As much as I love the global aspect, there's so many rules and regulations that it can be a little bit cumbersome. With respect to all the country's rules and regulations. The biggest that we learned were Italy. In Italy you need to have performance bonds which we didn't realize right away and there's a few other countries in Europe that offer that. So if you get a chance to work globally as a Treasury practitioner, you know, it's always a great experience to have. Maybe it's not for you, but it's definitely a great experience to have as you're talking to your colleagues, not just within your company, but in companies that are with treasury practitioners that you network with. While I was there I also was tasked with taking on insurance which Mike, as you know, insurance doesn't always fall under the treasury umbrella.

Luck.

This time it did. I worked with our pointed risk management consultants by our private equity company to help reduce our insurance fees from our carriers which we had a hardening market that's a little tougher to do. But they. When you're talking company the size of Life Scan and they have all of our book of business, it's a little bit easier to negotiate that. I don't recall what the savings were off the top of my head. I wish I had that number here but.

So as you said, that sort of step to global, which is fantastic, talk us through that, expanded your, your knowledge and everything else and you made that move then. Then talk us through the next couple of moves because you want to get us up to date as well.

Sure. So LifeScan, I was there roughly two years, decided to make a move. I went to a company called novavax. For those of you that don't know. Early in the COVID pandemic, novavax had a protein based COVID vaccine that was coming out. Unfortunately still not approved by the fda. The company itself had grandiose visions. Honestly, I think their product was the best of market. It's protein based. It's the vaccines that we all got growing up as kids. It'd be great to have that on the market. I believe it has emergency use authorization, but it's not out there. When I saw that for nine months into the role, I decided to make a move. And for the last seven months I've been with Curaleaf, the world's largest cannabis company. We have operations in the U.S. and Europe. We're in 21 states in the U.S. both medical and adult use, where adult use is loud. And I've been here for these last seven months literally standing at Treasury Department from the ground up. There was nothing here prior to me. So we've implemented forecasting, sox, compliance controls, positive pay bank relationships, setting up account structures, the whole nine yards. And it's been fantastic. And it's a great group of people that I work with.

What was your checklist? You know, I often said this in the past. I had one of my listeners back last year. One of the things he said is he'd gone back to some of our previous shows to sort of go through a bit of a checklist. You know, start off with cash management, let's sort this out, boom. Then the banks, let's sort this. What's been your checklist, if you like, of, you know, when you went in to set this all up because you've got, you know, a wealth of experience.

My checklist first starts with making sure that all the signers on the accounts are updated. That is paramount for me, having worked in at Teva under Frank Kimmick. We looked at that every three months. So now I have a process in place where we're looking at that every month right now as we get things stood up.

Controls and compliance.

Yes. Obviously when you're in treasury you need to know where your cash is. Starting out with a one or two week cash flow forecast is where we started. We're now at 5. We want to roll that out to a 13 week cash flow forecast. We have some internal problems with that. Not, not necessarily problems, they're challenges between information, who has it, is it accurate, which obviously in treasury, you know, the more accurate your information is with your ap, your ar, anything you can get along those lines, that the better your forecast is going to be. We have some, some challenges with that right now that we're sorting through. But at the end of the day, you know, we'll get to that 13 week cash flow forecast. It's all about partnering with the right individuals. So I'm partnering with FP&A accounting finance tax to make sure that we get the appropriate information, make sure it's all correct and we can put together a great 13 week cash flow forecast with the numbers we have to provide that to senior management.

And now let's just talk about the industry, if you would cure leaf and things. Obviously there's been front page news a lot of the time, what's it like working within that industry and without going into confidential information, it's just more what has it been like for you? Because also I think you're a remote based role which will come into us. I wanted to cover the first industry and then your position and remote what that's like for you. So talk us through.

Sure. So the industry is super exciting. There's a lot going on. Obviously in the US we were hoping that it would either be rescheduled or they would pass safe banking. For those of you that don't know, in cannabis we can't use traditional banking products, so we don't have a revolver or line of credit. If we were to get a line of credit, they require 105% cash collateral, which obviously doesn't really do what we need it to do. We can't use credit cards, so all of our sales are cash or debit card based. It's exciting, but it's challenging at the same time because it's everything we're doing in treasury is literally cash based. The biggest piece of that is making sure we have good communication among our regional operators and corporate treasury, making sure that we get cash remitted as needed, working with tax, making sure we get tax payments done as timely as possible. We're a growing company. We've gone through acquisition, we're going through a lot of acquisition integrations, which for those of you that have done that, can be a little bit challenging. Luckily, I have a great group of people that I work with where we all work together really well. I tried to provide the best customer service to them as I can. So I'm beating up banks for them as I need to to get the best service for them as I can. It's really interesting, but at the same time it's a little stressful because we don't have that safety net that traditional treasury groups have to fall back on.

So you cope with that, which is fantastic and everything else. But I'm pivoted around that you and talked about this. We've got one of our other podcasts which where Craig, myself and Katie talk about virtual, you know, working remotely. It's a virtual webinar that we did where we were talking about remote working, blended ways of working, which we'll be talking about at a couple of conferences this year. Now, for yourself, you're 100% remote with your role. How do you find that? What's that been like for you?

So since COVID I'm sure most treasury teams have been a hundred percent remote. My remote started with LifeScan and then through Novavax I was 100% remote and now with Pure Leaf, I'm 100% remote. With LifeScan, it was really easy being remote because I had worked with those individuals. We kind of had a cadence of who did what, how we operated and we would have a daily or weekly call with everybody. At novavax, that was a little bit more difficult because the company was trying to transition from a phase three to branded company. I'm not sure that the individuals there really understood treasury because there was no treasury in place before that. But here at curaleaf, I have a Treasury analyst, Julie Riggs, who works for me. She is fantastic. We talk two or three times a day. I report into the Chief Accounting Officer. We talk at least once a week. I have touch points with all of our regional operators at least once a week and I have a touch point with our VP of Accounting at least once a week. There's a lot of great Communication. And I think if you're in a remote role, that absolutely has to be paramount because you're not in the office setting. You don't get to see these people every day or, you know, every couple of days. Having those 30 minute, 10 minute, 5 minute standup calls, just to make sure that you're all on the same page is paramount to making sure that you have good communication and that things can.

Flow smoothly and with yourself. I know that, you know, moving more into the sort of general views of yourself as a Treasury professional, you've talked about the fact that not getting noticed because you're running everything so smoothly. Is your one of your claims to fame, one of the things that you're trying to aim to do? Do you want to talk us through that? Because I think it's quite an interesting one. Sometimes treasurers are wanting the spotlight on them, you know, particularly in crisis times. But then you're actually quite comfortable with, look, if Treasury's working you, we don't need to talk in a good way. Talk us through that.

Absolutely. So one of the quotes that Frank Kimmick gave me was, you know, when you're in treasury, when nobody knows your name, you're doing a great job, which seems kind of counterintuitive, but really, if there's no cash blow ups and everything's running smoothly, you are doing a great job. Yeah, it'd be great to have your name noticed, but or by the entire company. And that'll happen as you, as you progress in treasury. You know, you make your inroads with accounting and FP&A, and tax and finance collections. If you're in pharmaceuticals with customer rebates, everybody will get to know you. But really the big thing for treasury is the less you're noticed, the better job you're doing. At least in my opinion. That's how, how it works for me.

Sounds great. It's an interesting one. It's actually not dissimilar. You know, they said the Cheers bar where everybody knows your name. And I've actually, I use a slightly similar phrase. People have said to me, you know, why aren't you in this conference in the uk? Why aren't you in this conference? I mean, I don't want to be in a room where everybody knows me, really. And I said, no, I need to be out there sort of networking and building the network with lots of treasure professors. One of the reasons we do the treasury podcast, to get out there and make sure that we are getting noticed by new, different people. So it's A different pivot to that, but as you say. So your ethos around treasury itself though, is. But you want treasury to be noticed, surely by the company itself. How do you then manage your treasury for Cure Relief? And how are you then liaising further up with people?

Sure. So obviously, like I mentioned, we don't want to be noticed for cash blow ups, but the way we do get noticed is by providing efficiency and cost savings to the company, whether it's working with our regional operators and implementing various ways to do things better, putting in better compliance controls, working to prevent fraud. As we know here in 23, fraud has become ever more present in treasury and we've dealt with some issues with whitewash checks. So tackling that head on, really, it's making sure that we're safeguarding the company's assets as best as we can. And that, in my opinion, is the better way to get noticed than making sure that everybody knows, hey, our cash forecast has been 90% accurate or 95% accurate. That's great. If your cash forecast is not accurate, but if you can safeguard the company's assets and get noticed for that, I think that's a better way to get noticed by not just senior management, by other people throughout the company. Knowing that you're putting everything else in front of, in front of yourself to make sure that you're putting the company first. Yeah.

And where do you see Treasury? You talked there a little bit about. A lot of people are talking about fraud, you know, being a big issue for treasury and, you know, lots of things as we come out for Covid and everything else. What are the other areas you think that treasury folks need to be thinking about? You know, if you were going to a conference or something like that, what the sessions you're going to be attending.

Obviously treasury works really closely with FP and a tax and accounting. The biggest ones for me going forward are really going to be around it. And cybersecurity as we've seen, not just here but around the world, we've seen a lot, a lot of fraud. And really, how is treasury going to integrate with it and cybersecurity to help prevent this? Whether it's, you know, to multifactor identification or if there's other things that have to happen, and then integrating your banking portals with your ERP and making sure that everything is firewall there as needs to be, I think those are going to be the biggest things that happen here over the next few years with Treasury.

And when you say that, you say obviously because you focus on an Excel Solution and stuff like that with you guys. How are you then implementing that yourself without me being unfair about it? But how do you make sure that works for you guys?

Sure. So obviously I've been here seven months and we've put in a forecast using Excel. We are looking at external solutions for this. Unfortunately, they're not as quick as just turning on a light switch and having a solution ready up. There's a business case that has to be decided on, going through pricing proposals and all that. We are looking at that really it's partnering with it to make sure that we have as much security in place for treasury as we can and where we see deficiencies, we're raising that red.

Flag still before we get to the wrap up of the show, you know, we're not that far off it, but any areas we haven't covered, Michael, that you think are Orton, you know, maybe about people, about treasury in general, what.

Do you think one thing is, you know, a lot of things in Treasury I think are very teachable. One thing that I like to see when people come into the space is that they have a good customer service mentality. We are customer service facing internally and if you can provide great customer service, I think you can pick up the cash forecasting or the various aspects of Treasury. That customer service thing for me is huge when I'm looking at individuals to bring in or when I'm interviewing someone for another role. Having that, that mentality where you're providing service first paramount treasury because of all the people that, that you face with in treasury, you know, we're partnering with Accounting, Tax Finance, FP&A Operations and through my role here at Director, you know, I get exposure to C suite a little bit and making sure that I'm attentive to their needs, what they need, asking the right questions or just asking questions in general to make sure that I'm providing them exactly what they need. So there's nothing 79 iterations and then hopefully they don't get annoyed with me because I'm asking these questions and they get, you know, 79 iterations of whatever.

We'Re working on, you get the answers. And as you say, that very client centric, even though you're internal, but a very customer client centric internal view which I think people can gain from today, which is fantastic. Now obviously going to put your LinkedIn details in the show notes and you know, Michael's been a regular podcast listener. So you know how this bit goes. This is, you know, some of the top tips, you know, maybe if you're starting in your career earlier on or what the takeaways you're going to give to your peers and some of the more junior guys. What's the takeaways in today's show you'd like to give?

I haven't mentioned this earlier, but I think the biggest takeaway is, at least for me, is in the roles I've been in. When I start to get comfortable. I do get comfortable, but I need to look for that next challenge to expand my knowledge base, expand my toolbox, if you will. The biggest thing, biggest advice I could give anybody is if you start to feel comfortable and you want to still make that next move, ask your boss what the worst things they work on on, and try and take those on. Maybe they will let you, maybe they won't, but at least shows initiative that, hey, you want to take that next step. It's really imperative if, especially as you advance your career, to try and increase your toolbox and Treasury. You know, you may not always have a path straight up. You may have to make some lateral moves. So finding opportunities where you can get exposure to different things, whether it's different industry, different aspects of treasury, whether it's documentation, fx, cash, forecasting, hedging, treasury, strategy, account analysis and relationships, whatever you can get experience in will only help you as you go forward.

Fantastic. I often say that with people with their resumes and things that, you know, people say, oh, how do I should have structure this? How should I do this? I went, look at the pain points. You're applying for this role. Look at what the pain points are going to be for that company. Now they need someone in Treasury. If you can help them, go and help them, you know, but you need to, you know, think through the. They're growing at this rate, they're growing internationally, FX is going to be an issue, or they're growing, you know, they've got, you know, junior team, they're going to need mentoring and coaching. Look at their pain points. And you're talking about it in a practical sense, going to your boss and saying, right, what are you? What are your problems? Let me be your paracetamol. Let me help you.

Absolutely.

Yeah.

Yes, absolutely. That's. That's something I actually learned at one of the AFP seminars I went to and it's helped me immensely in my career.

Fantastic. On those amazing final words. We'll leave it there. We'll put your LinkedIn details in the show notes people connect to you and expand their network. It'd be lucky to have you in there and look forward to seeing you at conference sometime soon as well, Mike.

Thank you Mike. Really appreciate it.

Pleasure.

Hello, it's Mike here again. I hope you enjoyed this week's show. If you did, then maybe you want to follow the show or subscribe, depending on where you listen, whether that's itunes, Spotify or another great place to listen to the show from. It's totally free and means that you'll be the first to see each and every week when we release a new show. And maybe whilst you're there you could even leave a quick review. Reviews and ratings are among the most important metrics for a podcast to effectively rank. And as you can probably appreciate, the podcast is a lot of hard work to produce. Every week it'd be amazing. Just take say 20 seconds, leave a quick review of my amazing guests and their great career stories. We'd really appreciate it. Thanks very much and I can't wait to see you soon.