As Nevada, home of the nation’s largest pleasure market, poises to legalize recreational marijuana on July 1, companies in the rapidly growing cannabis industry are ramping up their efforts to become brand leaders.
The suit-filled investors' conference I attended in New York City recently placed a focus on marketing and getting around the “reputational risk” of becoming involved in the cannabis business.
“This is not a normal business. It’s federally illegal,” acknowledged Scott Greiper, president and founding partner of Viridian Capital Advisors, the event’s organizer. “I don’t want my kids thinking I’m a drug dealer.”
How to do that, Greiper said, is by rebranding cannabis as an industry about social change and social justice and focusing on the plant’s medical benefits rather than its stoner culture.
“We believe Nevada will be the bellwether state,” said Todd Denkin, president and COO of Digipath Labs, which has created a testing system and standards it intends to roll out nationwide.
One of the strongest signs the industry is entering its next phase is by looking at the people who are getting into it.
I spoke with Don Robinson, CEO of Oregon-based Golden Leaf Holdings, which uses the hashtag #nohigherbliss in its marketing. As the former CEO of food giant Mars, Robinson is approaching the business like a CPG company. His strategy is to sell dispensaries on the wisdom of carrying fewer product lines – similar to how a packaged foods marketer would deal with the retail trade using a category management system.
“We are manufacturing in an FDA-controlled environment, even though it’s not required,” Robinson said, and the infused products maker is using a “big food” approach to take inefficiencies out of the market. “Think of it as a food ingredient. Cannabis oil can go into anything.
“Our competitive strategy is all about brands … economies of scale and R&D,” Robinson adds. “R&D is coming into the category like a tidal wave.”
Golden Leaf is on an acquisition spree and watching Canada, where full deregulation is anticipated in 2019. Robinson expects big food companies to start looking at the market before those in the liquor business do.
“This is really about wellness solutions,” Robinson said. “Cannabis improves lives.”
California-based Sarah Browne is just one of the digital startup veterans who sees the same velocity that happened in the early days of the internet now happening in cannabis. She is launching a consumer insights center for cannabis, using the same market research skills she employed over the course of her career for companies like Yahoo and Microsoft.
“If you’re on the medical side, you know what you’re doing in the category is going to help people — like your friends going through chemo, your grandmother whose arthritis is a daily pain, your colleague whose migraines are so bad she can hardly see her laptop screen,” Browne says.
“You begin to see how really silly, how tragic, that this powerful and healing plant has been legislated away from delivering the physical and emotional relief it can provide,” she adds. “For me, after so many decades of working on products that may be cool, save time, or leave someone smelling good, it is a joy to be involved in products that can honestly improve health and wellness.”
Browne became an evangelist for medical marijuana after it successfully abated the insomnia that plagued her.
Former NFL defensive end Marvin Washington, who addressed the investor’s conference, said if there’s any sport that should experiment with marijuana, it’s football because of the incidence of concussion and opiate use.
Washington predicted use will be approved by the time the next NFL Players collective bargain concludes in 2020. “I want to change the stigma and connotation of this plant,” he said, “because I know it’s going to help. The NFL lets people take Ritalin and Adderall.”
What do you think about the medical marijuana market? Share your thoughts in the comments section below.