IN THE NEWS — 1/27/21

The week’s happenings:

CAN SUSTAINABILITY BE PROFITABLE?

Amid the complications of running a licensed cannabis business, environmentalism isn’t always a top priority. But, for many operators, cleaning up their act makes financial sense.
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  • As competition intensifies, the lower production costs that can come with energy savings are a competitive advantage.
  • As an added bonus, environmental consciousness attracts an important segment of consumers. 
  • The head of a new group called the Sustainable Cannabis Coalition says energy efficiency and standardized practices could help reduce the cost of producing a pound from $500 to $100.

Every cultivator “has an opportunity to improve.”

ON BRAND: HOW TO ATTRACT “NEWBIE” CONSUMERS

In her new column “On Brand,” Jackie Bryant talks to marketers about one of the most alluring customer groups, cannabis newbies:
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They’re “very much a real market segment, one that is fairly easy to figure out,” says Ryan Goldstein, CMO of cannabis branding and marketing firm Petalfast and CEO of A.P. Keaton. “Low-dosed and inconspicuous products are the intuitive entry point for canna-curious consumers,” he says.

Not everyone agrees.

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“On Brand” is brought to you by Mattio Communications.

WHAT TO EXPECT FROM BIDEN

Much of the cannabis industry supported Joe Biden’s presidential campaign, and Democrats’ efforts to regain control of the Senate. Now that both have happened, what can the cannabiz expect from the new administration and Congress? 
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Biden is one of the few Democrats with a national profile who hasn’t endorsed full legalization. But he has called for decriminalization, legal MED and for states to be able to make their own decisions about REC.

  • This leaves big questions for weed businesses who hope to operate as a regulated industry akin to tobacco or alcohol. 

Reform is in the air, but it’ll take a while. 

STATUS UPDATE: ARIZONA

Arizona, one of the four states to legalize REC in November, is on the brink of opening its market to all adults. In a region where full legalization has become fairly routine, the state has attracted plaudits from the industry for its business-friendly climate and what insiders describe as an attentive and well-run regulatory process.
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  • The Grand Canyon State legalized MED in 2010 and saw dispensaries do roughly $800M in 2020 sales. The pace of its growth could be closely tied to how much the pandemic allows for tourists to return. 

It’s a potential “oligopoly” in the desert.

Plus: AZCentral has more on the state’s new REC market.

IN THE NEWS — 1/23/21

Here’s what else is happening:

HOW CONNECTED SELLS CANNABIS FOR TWICE AS MUCH

We’ve all heard 2020 was the year of the value brand. But no one seems to have told Connected.  
WeedWeek

  • According to data firm BDSA, between January and September 2020, Connected and sister brand Alien Labs generated more retail revenue selling branded flower — nearly $50M — than any other company in California. (Value brand Pacific Stone was a distant second.) 
  • Connected says its premium indoor grown flower wholesales for about $4,400/lb, roughly twice the state average.

Here’s how Connected does it.

WHAT’S NEXT FOR WEED MARKETING?

In this business, marketing is everything.

With hundreds of companies selling relatively undifferentiated products, the race to dominate the industry can be understood largely in terms of who develops the deepest brand loyalty and exploits it most effectively.

  • For operators, this means everything from how they package product and sync their brand with customers’ values, to tracking buyer sentiment before, during and after purchases.

This week the Cannabis Marketing Association hosted a series of TED-style talks on the future of branding the plant. Here are a few key insights:
WeedWeek

  • Curaleaf CMO Jason White, whose credits include Beats by Dre and Nike, laid out  how the big MSO sees the world.
  • Michael Brooks, a marketing strategist with Blue Dream Social, discussed why cannabis brands need to pay attention to Facebook and Google, despite “animosity” for big tech.
  • Changemaker Creative packaging designer Lilli Keinaenen focused on the brand-value of sustainability, or, as she put it, how “green attracts green.”

There’s lots more…

Plus: 

CANNABIS EQUITY ISN’T WORKING

For years, progressive cannabis activists have called for “equity.” They mean that the communities of color who have suffered most from the war on drugs and mass incarceration should profit from the industry’s rise. It’s an admirable idea that has proven very difficult to implement.   

I spoke to Eaze executive Elizabeth Ashford, 4thMVMT CEO Karim Webb and former Massachusetts regulator Shaleen Title about what’s not working, and how to fix it.
WeedWeek

  • Our conversations took place as industry consolidation makes it more difficult for smaller equity-designated businesses to compete.
     

Here’s what they said.

Related:

IN THE NEWS — 1/20/21

Here’s what’s happening: