Thoughts & Insights

Interstate Cannabis Commerce is Coming.

February 24, 2021 · 4 MIN READ

Get ready for enormous disruptive change and incredible opportunity. A national market for cannabis, across state lines, opens a door for clever, bold brands to not just define their place in the market, but to define the market itself.

Interstate commerce is around the corner. Maybe not tomorrow. But we‘re in a landscape bursting with the possibility of change.  Especially if the Biden administration turns a favourable eye to sensible federal cannabis legislation, it might come with the full open slather approval of the federal government. Then again the courts are a powerful instrument of change too.

The West Coast is ready right now. Oregon has a surplus of state legal cannabis, and nowhere to sell it. For eighteen months or so they’ve had a law on the books that would permit cannabis export to other states. Only federal regulation stands in the way. 

Is the cannabis industry ready to deliver truly national brands?

However it comes. Cannabis will end up being sold across state borders in the USA ( don’t forget Canada and Mexico either…).

On one hand, Cannabis will need it’s own logistics and distribution landscape. It’s pretty easy to see things going down the road familiar to the alcohol industry and other mature CPG markets, perhaps with a similar “three-tier-system” of producers, distributors and retailers.

The smart folks are already salivating at the chance to take a slice of this pie, and the nascent opportunities and  pitfalls here are endless, but as the necessary logistics and regulatory infrastructure does get put into place, there’s even bigger implications coming for brands and communication too.

Dude, where’s my brand?

Right now, trademarks, copyrights, and intellectual property are a mess. With no national market, there’s been no interstate recognition of brand ownership, and multiple brands hold state level ownership, without necessarily owning the rights to use that brand nationally. 

Take “Dogwalkers” – the perfect example of the confusing brand landscape in cannabis. It’s a great name for a mini-pre-roll – a perfect smoke for the time it takes to stroll around the block with old fido. It’s a brand most recognizably owned by GTI, but because it’s such a great naming idea, it obviously pollinated in multiple minds, in multiple states, at multiple times. With each isolated from one another from a branding perspective,  a unique problem arises: There’s several companies with similarly branded products.

So when the borders are open, who gets to carry that brand forward? Who owns the contested intellectual property on the national stage? What happens to naming and identity? All this will have to be hashed out by lawyers, brands and regulators, but however it happens,  there’s going to be huge growing pains, and more and more disputed copyrights in the very near future.

Of course, this represents an opportunity for those willing to think differently.

Can cannabis brands tell true stories that resonate with their customers?

In a national market, they’ll have to, just to survive.

As cannabis becomes more commoditized and consolidated, the character of the industry will inevitably grow up to resemble other mature CPG markets too. It’s not a leap to predict a national cannabis market dominated by a few big brands at the top.  It will also generate almost limitless opportunities to carve out space in consumer’s attention by delivering actual value.

We’re on the precipice of a shift towards preference.

There’s about to be a ton more folks who, for obvious reasons, have never been legally permitted to buy cannabis. Which means their choices have always been clandestine and limited, and now they’re ready for a fresh conversation. Especially in the new East-Coast market, customers are coming to cannabis ready to identify what they want out of the experience.

A totally new national landscape gives the whole industry a chance at a branding clean slate. There’s suddenly so much more incentive to do something genuinely new, to break away from convention and approach cannabis as a whole new lifestyle and wellness category,  where the sky’s the limit.

Especially if there’s a potential risk for fights over the scraps of trademarks and copyright, it makes sense to explore totally new branding, marketing and communication possibilities. In a consolidated world, customers will gravitate to refreshing, unique stories that most authentically represent them.

Is your cannabis brand futureproof?

Are you ready for the change? There’s a choice here to look forward, and define new meaning in a prosperous future, or to be swept aside in the cascade of commercialization that’s coming with interstate commerce. Brands who can navigate this moment well, and find the right connections with their customers will reach the future with opportunity

How will your cannabis brand offer value in a new national marketplace, and how will your customers know?

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Why Cannabis Brands Need to Plan for the Inevitable – Legalization in All 50 States

“The future of legalization (of cannabis) is looking bright indeed, folks.” That’s a quote from an August 2018 Esquire article, and with more and more states expected to legalize some form of cannabis in 2019—including Connecticut, New York, New Jersey, Rhode Island and more—the time has come for cannabis brands to “get serious.” 

January 25, 2019 · 4 MIN READ

 

“The future of legalization (of cannabis) is looking bright indeed, folks.” That’s a quote from an August 2018 Esquire article, and with more and more states expected to legalize some form of cannabis in 2019—including Connecticut, New York, New Jersey, Rhode Island and more—the time has come for cannabis brands to “get serious.”

To date, ten states have fully, officially legalized cannabis for adults, while another 33 allow it for medical use. New Jersey recently doubled the number of medical marijuana operations in the state from 6 to 12.

And just last month, the Surgeon General of the United States, Jerome Adams, made what Forbes referred to as a “bold move” by calling on the federal government to rethink marijuana’s classification as a Schedule I substance.

During a Q&A session at a Police Assisted Addiction Recovery Initiative conference in Massachusetts, Adams was quoted as saying: “Just as we need to look at criminal justice laws, rules and regulations, we need to look at health laws, rules and regulations, and that includes the scheduling system. I’ll take it somewhere else: marijuana. We need to look at the way we schedule different medications across the board, because one of the concerns that I have with marijuana is the difficulty that the folks have to do research on it, because of the scheduling system.”

 

Only a Matter of Time

Justin Strekal, political director for National Organization for the Reform of Marijuana Laws (NORML) believes lawmakers are coming out of the woodwork in favor of legalization. “Be it on the grounds of criminal justice reform, community-police relations, racial justice, tax revenue or that they just see the writing on the wall, the political evolutions are accelerating at a tremendous rate.”

Throw in the fact that over 60% of Americans believe the use of marijuana should be legalized, and you can almost see for yourself the proverbial writing on the wall leading to legalization of some form in every state if not in fact at the federal level.

Earl Blumenauer, a congressman from the state of Oregon—in a letter he sent to the House Democratic leadership on the very same day Canadians celebrated their first of legalized cannabis—wrote: “Congress is out of step with the American people and the states on cannabis. There is no question: cannabis prohibition will end.”

 

The End of the Wild West  

I guarantee you there are still many brands and marketers out there who still view the world of cannabis and the marketing thereof as the wild west, an open frontier where there are no laws or rules. And they often mistakenly interpret this to mean they have plenty of time to “set up shop.”

The fact of the matter is that there is a “land grab” happening as we speak, as the first brand in a given state gets the copyright.

From an article aptly titled “What Cannabis Entrepreneurs Need To Know About Intellectual Property“:

“As the cannabis industry continues to grow and established companies enter the market, early-acquired IP rights will prove indispensable. Beyond offering market protections and a competitive edge, IP rights can be licensed to generate additional recurring revenue, help attract investment, and enhance valuation for exits.

IP rights should be considered early and often in any business venture, especially in a nascent industry like this one. Those who procrastinate this critical business task risk permanently forfeiting rights, and may sometimes find IP roadblocks placed in their path by competitors who beat them in a race to the U.S. Patent and Trademark Office (USPTO) that they didn’t even know they were competing in.”

Want more details on the cannabis industry IP race? Find more helpful info in the article “How to Protect Cannabis Related Intellectual Property: Trademarks, Copyrights, and Patents” via the New Jersey Law Blog.

 

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“Are you cool, man?”

This single, loaded line from Richard Linklater’s Dazed and Confused has been quoted thousands of times since the movie’s 1993 release.

September 19, 2018 · 4 MIN READ

This single, loaded line from Richard Linklater’s Dazed and Confused has been quoted thousands of times since the movie’s 1993 release. In it, “Slater” — played by Rory Cochran — is the quintessential “stoner” asking the newbie: are you one of us?

Times have changed since the ‘70s setting of the iconic film. In that particular context, being “cool” would mean that you “toke the reefer.” Puff the cheeba. Smoke pot. But today, being “cool” can mean a lot of things. And being someone who uses some form of cannabis? That can mean a lot of things, too. The diversity of cannabis consumers is growing, maturing an audience that is increasingly complex. And that’s throwing the industry quite a curveball when it comes to marketing.

With widespread legalization slowly advancing this still-young market, cannabis brands and marketers are left to navigate a deeply complicated culture. This newly legal commodity comes tangled in a storied history, rife with sideways stereotypes and classically simplified tropes. The ideas of who we’re speaking to and how to speak cannot be drawn from the one-dimensional representation of potheads past…

Cannabis Branding Do’s & Don’ts Are Not One-Size-Fits-All

Cannabis brands taking cues from the classic “pothead stereotype” are likely to run into a few problems. For one thing: if it’s obvious to you, it’s going to be obvious to hundreds of other entrepreneurs. So, simply using some iteration of a “pothead aesthetic” is going to make your brand look like everyone else. Well — not everyone else. But certainly a lot of other brands.

Luckily, a growing number of cannabis consumer audiences continue to emerge. That means there are niches, spaces your brand can more fully occupy without turning into white noise. As with any diverse audience, the more you learn about your particular target market, the better your messaging will be at reaching them. And in this case, not every audience segment will be the tie-dye-loving “hippie type” that many entrepreneurs think of first.     

That being said, there will certainly be some groups with whom this approach resonates. But they are not the entirety of the market. And, even more importantly, using what I’ll call a “tie-dye tactic” should be done consciously and delicately, because audiences have become increasingly good at picking up on it when parts of their culture are being taken and co-opted to sell to them. And if you think back to the hippie culture that inspired this whole stereotype….they’ve been pretty wary of corporatism and “the man” since the very beginning. It’s kind of their thing.

Just Be Yourself

Businesses in this emerging market would do well to remember a key idea that is applicable to any brand on the path to finding its identity….

Work from the inside out, and not the other way around.

Audiences today are more savvy than ever before. They respond to brands that are genuine. And that means you shouldn’t draw your identity and style from external sources, but from what your company is really all about. The only way a bunch of peace signs and day-glo branding make sense is if your business is really aligned with that aesthetic. Are you representing your true points of distinction, or what you think it should look like? If you can find what makes your brand different, that is much more compelling than trying to be like everyone else.

So, maybe a “tie-dye tactic” isn’t for you…. But you’re also not sure what tactic is for you. Or how to find your audience. Or how to approach them. Well, that’s okay…because we do. And we can help. So when your audience asks, “Are you cool, man?” — you’ll know exactly what to say.

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One More Reason to Love CBDs

Is it just us, or does CBD just keep adding to the list of difficult-to-treat disorders that it can—maybe—actually treat?

September 19, 2018 · 4 MIN READ

Is it just us, or does CBD just keep adding to the list of difficult-to-treat disorders that it can—maybe—actually treat?

The FDA’s recent approval of an oral CBD treatment for epilepsy signals another win in the battle to destigmatize cannabis product use in favor of improving quality of life. Epidiolex was developed to help children diagnosed with Lennox-Gastaut syndrome and Dravet Syndrome, two particularly rare and severe forms of epilepsy. Cases like this shed light on the plant’s vast potential for positive use, so much of which has been hindered from development due to the antiquated stigma surrounding cannabis use. And when it comes to something as imperative as helping children with epilepsy? Well, that’s a tough one to argue….

Epilepsy: A Struggle to Diagnose & Treat

Around 470,000 children diagnosed with epilepsy currently live in the US. The CDC defines it as a brain disorder that causes recurrent seizures. Different conditions create many categorizations, making assessment and treatment extremely taxing—sometimes requiring parents to confront a generalized diagnosis. Six kinds of seizures further complicate recognition and proper care, so awareness of a multitude of presentations is necessary to advance antiepileptic therapies. According to NYU’s Department of Neuroscience and Physiology, epileptic patients often deal with a lower quality of life and shorter life expectancies.

Epilepsy Treatment in the Now

The current accepted standard of care primarily includes pharmaceutical and surgical intervention. But antiepileptic drugs (AEDs) possess many shortcomings and unwanted side effects; some are quite severe such as depression or memory and behavioral issues. Children with epilepsy are frequently subjugated to a few, if not several, AEDs before finding a workable regimen. Also, even though AED-dependent therapy may be successful at stopping seizures, it doesn’t cure any of the underlying causes of epilepsy. Akin to the prescription method for other neurological disorders, it’s all a big guessing game as to which medication might work for someone.

The Brigham and Women’s Hospital of Boston reported that the combination of AEDs, known as polytherapy, was used as an initial treatment to control various symptoms until the 1980s. After successive trials, monotherapy became the first line of treatment. However, it’s still far from perfect. A recent study released by The Medical Journal of Australia showed that around 10% of children with epilepsy are resistant to AEDs, limiting parents to a list of invasive routes except for the use of cannabis-derived cannabidiol, AKA (CBD)—the public-friendly, non-psychoactive substance that’s been used to medicate conditions like cancer, glaucoma, inflammation, and osteoporosis.

CBDs: A Step in the Right Direction

Case studies, smaller trials, and surveys concerning the implementation of CBD in the treatment of epilepsy have repeatedly clarified its benefits. A 2013 parental survey identified an average of 12 AEDs tried before testing cannabidiol-enriched cannabis. The children treated were between the ages of 2 and 16. Additionally, that same Stanford University survey stated a huge reduction in seizure frequencies among 84% of participants. Side effects included drowsiness and fatigue, but 42% of parents reported more than an 80% reduction in their children’s seizures since beginning treatment.

Where CBD is Going

The study of CBD treatment is shaping up to be quite promising for a host of neurological, psychological, and physical ailments. And, regardless of its unknown interaction with the fundamental causes of epilepsy, CBD elicits fewer volatile reactions than traditional AED therapies. With an influx in research, legalization, and a general yearning for education regarding cannabis, the CBD industry is likely to experience a considerable amount of growth in the very near future.

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Don’t Make These First-Time Business Operator Mistakes

I have had the opportunity to attend several Cannabis conferences this year including the Philadelphia and New York summer events.

September 19, 2018 · 4 MIN READ

Over the past year, I’ve had the opportunity to attend several cannabis conferences, including two major east coast events: CannabisLearn in Philadelphia and CWCBExpo in New York. While visiting the conferences, it was easy to feel the tremendous energy driving this category. The excitement and growth opportunity are truly palpable.

The cannabis industry is right on the verge of historic growth and expansion—think Internet, circa 1998. Its promise and potential are clear to many, which is attracting a pool of entirely new business people. It’s intriguing to contrast the interest in the category with the realities of operating a new business.

One of the most consistent themes that surfaced in the cannabis conferences I visited is the fact that this young industry is populated by true entrepreneurs, many of whom have never created nor operated a business before. So, for those of you that are feeling called to the industry, but haven’t had the chance to operate your own business, I wanted to highlight 3 key common miscues made by startup businesses.

 

  • Forgetting to define and express a vision/passion statement

 

Beyond an intellectual and emotional connection with the industry, it is essential that you articulate why your company exists and why you have decided to refocus your life into the new business. Your key stakeholders, investors, team members and family need to have a clear and definitive understanding of the opportunity you see and the reason why they should be on board with you.

 

  • Not creating or utilizing metric-driven goals

 

You are a startup, a small company trying to establish yourself and you have more than a full-time job in building and executing the business. Who really has time to set and evaluate metric driven goals? Well, you do. Being timing- and action-driven can maximize your productivity as well as establish defined metrics (number-based goals) to illustrate your relative progress as you activate and actuate the business plan.

 

  • Not recognizing the value of marketing (or applying it)

 

We live in a world driven by brands. And guess what? If you have a company with a name and good or service—YOU ARE A BRAND! Customers make buying decisions based on their knowledge and connection to your brand. Never stop thinking of your business as a brand and invest in smart, efficient ways that you can announce and reinforce what your brand stands for—and how important your customers are to your success.

If you’re facing challenges related to these or other operational areas of your business, the Chronic Business Intelligence Team stands ready to provide insight, advice and support. That is why we are here.

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When It Comes to Cannabis Marketing, This Is No Field of Dreams

September 18, 2018 · 4 MIN READ

The idea in the cannabis industry has been that if they offer it, consumers will come. And, in some small measure, they have. However, there are so many other consumers out there that the cannabis industry could win over. That includes over 60% of Americans who believe marijuana should be legal, according to a study by the Pew Research Center. That’s an incredible opportunity for those in the cannabis industry.

But they can’t do much with it if they stick to a marketing model that ignores the consumer. Already, cannabis companies are making mistakes in their approach to marketing.

Don’t Assume You Know the Customer

Like any other consumer today, the cannabis customer cannot be stereotyped. According to a 2017 Eaze Insights research study, the modern cannabis user among those 10,000 consumers studied in California is anything but the “potheads” or “stoners” shown in movies and television. Instead, 91% of the respondents hold a full-time job; 32% of the respondents were female; 51% of the respondents hold a college or postgraduate degree; and 49% of the respondents have an annual household income that exceeds $75,000.

Changing Consumer Preferences

Related to this lack of understanding about the consumer is the inability to follow the trending behaviors that they exhibit. For example, The Cannabist explained, “As the legal recreational and medical cannabis industry matures, consumers are increasingly open to experimenting with new products and delivery methods, including concentrates and infused edibles, according to a report released Wednesday by cannabis analytics firm New Frontier Data.”

Additionally, research firms like BDS Analytics are conducting benchmark studies that reveal even more about today’s cannabis consumer. The firm’s recent trends research revealed that consumers are the driving force behind the evolution of the cannabis industry, including a push for greater affordability. Other trends include emerging brands, demand for greater variety and delivery methods, and cannabis solutions for every mood.

Marketing Tactics Are a Must

Cannabis companies also assume everyone in the cannabis community talks to each other. Therefore, they think that works as the primary marketing tactic. In reality, like every consumer-driven brand, you need to engage with customers and go where they are. For cannabis consumers, that is online. That means learning how to incorporate SEO practices, create a content marketing plan that includes a blog, and develop a strategic social media strategy that focuses on education.

While it’s true there are some legal issues that restrict some aspects of marketing or the messaging, there are still many approaches that a cannabis company should consider. More time should be devoted to assessing how different platforms respond to the cannabis industry in order to find the best combination of online and offline channels to use.

Model Approaches

An innovation model identifies the local market a cannabis company can serve and then learns from them. The innovation approach is a great way to capture a specific demographic among cannabis consumers. The Cannabis Business Executive likened the model to what craft brewers have done in the alcohol industry. It stated, “Among infused product manufacturers, innovation is critical to seizing market share. As a result, we’re seeing a growing number of ‘craft cannabis’ companies, similar to craft breweries. These companies develop innovative infused products and edibles with distinct flavors and aromas, and they leverage these innovations to increase sales and revenue in an industry where big companies are getting closer and closer to stepping in and taking over.”

For example, specific brands are modeling themselves on a luxury brand level. Ad Age cited “Take Leafs by Snoop, the cannabis line that is owned and promoted by rapper Snoop Dogg. Leafs has a clean, classy appeal that looks like it could be sold at any luxury boutique or spa; it would fit in a gift basket alongside fine soaps, candies, or perfumes.” Other brands can follow this same approach marketing toward a specific age group or interest within a demographic to carve out a loyal following.

The Education Model 

Finally, an empathy and education model focuses on understanding consumer needs and product awareness. Then, the cannabis brand can educate them through workshops, website materials, and in-store experiences that best serve the market. And, it may pay off to take this approach in other ways.

Industry expert Danny Keith believes cannabis branding will be driven more by education than imagery. In a recent Forbes interview, he said, “There are more new customers in the cannabis space than in any other space in recent history around product consumption. Without education of product, customers are ignorant and the lack of budtender education is a white-hot space. It is important for brands to establish their presence for brand recognition while also educating the budtender about the quality of the product. Only then can the two marry and have brand presence at dispensary level while customer appeal on the macro awareness level.”

As explained in The Atlantic, “One lesson in this, for marijuana companies, is that if their marketing efforts are successful, public-health officials will take note, and invest more in research to determine just what the drug’s health benefits and detriments might be.”

Final Thoughts

Brands in the cannabis industry have more challenges than the average consumer brand. However, as you can see here, succeeding is not an impossible task. In fact, cannabis companies can do a better job at leveraging some of the same marketing techniques. These include tactics that focus on getting to know the diverse consumer segments. More of the marketing effort needs to involve education and research. This approach will help convince more consumers to enter the cannabis market. Cannabis brands can learn from the challenges associated with traditional vice product marketing and how to engage consumers through experiential marketing. The results will go far in propelling cannabis into the mainstream.

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Cannabis Marketing: The Challenges Brands Face

Achieving growth and building a following in any new industry can be tough, especially when its product used to be illegal.

September 18, 2018 · 4 MIN READ

Achieving growth and building a following in any new industry can be tough. When that new industry used to be illegal and continues to carry a stigma like marijuana does (even when rebranded as “cannabis”), it becomes all the more challenging. However, with continued signs that the cannabis industry is gaining acceptance despite regulations and other challenges, it is an important topic to begin addressing in discussions and brainstorming sessions.

The Grass Really is Greener

At the start of 2018, California and other states allowed the cannabis industry to expand legally as a legitimate business. According to Statista, “the Cannabis Industry 2017 Annual Report stated that sales of medical and recreational marijuana are going to start taking off this year. Sales of medical and recreational marijuana are going to reach $4.75 and $6 billion this year respectively. By 2023, both forms of the drug will be higher than $20 billion before hitting $24 billion in 2025.”

To provide an even larger picture of the opportunity, The Motley Fool gathered some startling statistics about the cannabis industry. For example, “legal weed sales in Colorado have more than doubled from $699 million in 2014, the first year of recreational marijuana sales in the state, to $1.49 billion as of 2017, according to the Colorado Department of Revenue.” Plus, the Factbook puts the U.S. cannabis market at $52.5 billion.

Then, there are the boosts to the economy through job creation. The same article noted, “As of today, an estimated 125,000 to 160,000 people are employed within the cannabis industry. By 2022, Factbook predicts that figure could soar to roughly 340,000 jobs. Assuming the current peak estimate of 160,000, this works out to a job growth of 21% per year through 2022. By comparison, the healthcare industry is only expected to see job growth of approximately 2% per year through 2022.”

An Opportunity That Could Go Up in a Puff of Smoke

With such incredible opportunity to lift state and national economies, it’s hard to imagine that there are so many legal and political issues stifling cannabis industry growth.

Primarily, regulatory issues and strict standards restrict how cannabis businesses can market their brands. In some states, cannabis businesses must disclose all intellectual property licensing deals. Also, cannabis advertising is not allowed near schools or where children spend time. That means no television, radio, vehicle, or print advertising. These businesses cannot use mascots. Other laws related to marketing severely limit how a cannabis business can publicize itself. For example, there are very specific marijuana advertising rules in the state of California.

Addressing the Challenges Standing in the Way of Cannabis Growth

Other industries such as alcohol, pharmaceuticals, tobacco, and gambling have faced similar challenges and overcome them. The same is possible for the cannabis industry. It just means getting back to basic marketing tools and being more about the creative approach.

This means opting for traditional print advertising in publications and direct mail for the cannabis industry. Digital marketing is also still possible, such as creating blogs that educate and inform audiences about the benefits of cannabis, which will help to build brands and break down stigmas. Like other industries, this can enhance brand trust and differentiate the growing number of brands in the cannabis industry.

Using social media platforms such as Instagram and YouTube will be a wise choice, as long as the content sticks to educational focus. New digital ad networks have also emerged as players in the space, including Mantis and Adistry. Additionally, SEO strategies and email marketing are two digital tools that can help with cannabis marketing efforts.

Though somewhat limited, there are still options when it comes to marketing cannabis brands. Yes, finding and honing the best approach will take time and evolve along with the industry itself. But despite the barriers created by regulation and stigma, this emerging market has undeniable potential—and based on predictions, will surely be worth the effort.

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