10 Young Talents Who Are Defining the Next Generation of Marketing
In November 2012, Olivia Mannix, a freshly minted graduate of the University of Colorado, was just starting her communications career when Amendment 64 passed, making Colorado the first state to legalize marijuana. Supporters of the bill saw victory, but Mannix saw the future.Read More
Together with her business partner Jennifer DeFalco, Mannix started Cannabrand—the country’s first PR and marketing firm dedicated solely to marijuana products. “We ran with the vision,” as she puts it.
Today, 29 states have legalization laws on the books, and an industry that didn’t exist four years ago notched sales of $7 billion last year. Mannix, 28, has been the voice of that industry, deftly navigating the still-treacherous regulatory waters to craft the brand images and marketing messages for more than 100 companies.
“There are so many who believe cannabis is this horrible drug,” she says. “We’ve focused on education, informing people of the benefits of cannabis, and that it’s not a stoner product.”
Olivia Mannix: The Innovation 50
The key to startup communications agency Cannabrand – dedicated exclusively to marketing marijuana – is weeding out the stoners, said cofounder Olivia Mannix to The New York Times. Cannabrand is headquartered in Colorado, one of two states that legalized recreational marijuana in 2012. The challenge she and cofounder Jennifer DeFalco face is how to rebrand the entire pot industry and appeal to successful people of all walks of life, and they’re doing it one project at time.Read More
A network of dispensaries, Mindful, hired Cannabrand to modernize its brand. And the agency was among sponsors of CannaSearch, a career fair recruiting for the cannabis industry seeking, among other positions, social media managers and marketing executives.
Mannix is also strategic director and cofounder of Marca Strategic, a full-service marketing agency with a wide range of clients in branding and consultation, digital advertising, PR, and website design.
Read more at prweek
How Marijuana Marketers Are Busting Stoner Stereotypes
As marijuana legalization spreads throughout the country, recreational and medical marijuana marketers are battling legal red tape and stoner stereotypes to attract a new generation of cannabis consumers.Read More
A certain segment of the boomer population spent their formative years in a haze of hippie-filledpot smoke.
Three decades later, skater dudes reveled in their stoner-stereotyped rebellion. Like the sweet, herbal, skunk-like stench that lingers on your T-shirt after a Grateful Dead show, marijuana carries with it connotations that are hard to shake as it enters the mainstream marketplace as a legal recreational product—not to mention a legally sanctioned pharmaceutical offering.
Marijuana has been legalized for medical use in 24 states across the U.S., and for both medical and recreational use in Alaska, Colorado, Oregon, Washington and Washington, D.C. Meanwhile, possession of a small amount of marijuana in 11 states (California, Connecticut, Delaware, Maine, Maryland, Massachusetts, Minnesota, Nevada, New York, Rhode Island and Vermont) doesn’t carry a prison sentence, making those states likely candidates for complete legalization, according to Fortune.
Even in these markets, the laws and regulations governing marijuana’s production, distribution and use are expansive and burdensome for companies that operate in this space—and for marketers working to promote it. Like alcohol brands, recreational marijuana dispensaries are battling negative perceptions while attempting to do their due diligence to promote responsible use of their products. And like pharmaceutical brands, marijuana dispensaries must battle burdensome regulations and continue a lengthy and arduous quest for FDA approval.
Marketing agencies are sprouting up across the U.S. to help marijuana dispensaries promote more positive perceptions, and owners and employees at marijuana-based brands are working on sophisticated marketing strategies to nip stoner stereotypes in the bud.
Jeb Bush Is in Good Company
In September 2015, Republican presidential candidates addressed questions regarding states’ legalization of marijuana during a debate hosted and televised on CNN. While much of the discussion focused on states’ rights, treatment plans and the penitentiary system, Jeb Bush—of the Bush family dynasty, and formerly the governor of Florida—was prompted to frankly cop to his pot-smoking past: “Forty years ago, I smoked marijuana and I admit it. I’m sure that other people might have done it and might not want to say it in front of 25 million people. My mom’s not happy that I just did.”
Bush’s comments elicited chuckles from both the audience and his fellow candidates, and made a few headlines the following day, but they didn’t cause much more of a stir. When a U.S. presidential candidate from the right can poke fun at his own pot use in high school, it’s a sure sign that the game has changed.
“Surveys have shown that half of the people in this country have tried marijuana at one point in their lives, and as the laws change, more people will be comfortable with the idea of openly consuming and discussing their marijuana use,” says Mason Tvert, director of communications at Washington, D.C.-based Marijuana Policy Project, an organization that focuses on ending marijuana prohibition. Indeed, Tvert’s assertion is backed up by data from the 2012 National Survey on Drug Use and Health, conducted by the U.S. Department of Health and Human Services Substance Abuse and Mental Health Services Administration, which found that 49% of the American population reportedly has tried marijuana, making it the most commonly used illicit drug in the U.S.
Acceptance has risen since the haze of the hippie ’60s. In a 1969 Gallup poll, only 12% of Americans favored legalizing marijuana. In April 2015, 53% of Americans said that marijuana should be legal, according to a Pew Research Center study. But even though Americans might have tried it and might be in favor of legalizing it, they don’t necessarily think that their neighbors should be smoking it—at least not for fun. According to an April 2014 study by National Public Radio and Truven Health Analytics, 78% of people support the legalization of marijuana for medical use, but only 43% of people support legalization for recreational purposes.
While savvy marketing could help change public perception—and it likely will, just as other adult vices eventually gain acceptance—marijuana marketers face rolls and rolls of legal red tape, Tvert says. “The rules surrounding the marketing of marijuana are really strict, and they really limit the outlets that these businesses have to reach potential consumers.”
Three Denver-based companies are taking on both the regulatory and consumer perception hurdles of marketing medical and recreational marijuana. Cannabrand, a marketing agency dedicated solely to cannabis industry clients, opened its doors two years ago as legalization picked up steam. GroundSwell Cannabis Boutique, a medical and recreational marijuana dispensary, works to change negative pot perceptions by offering professional-level customer service via sleekly designed, welcoming storefronts that could just as readily offer handbags and cosmetics in their modern shelving and display cases in place of pot-infused products. Inhale Mercantile, an online “headshop,” the term for a store that sells marijuana accessories, promotes its luxury cannabis accessories primarily to women—no stoner stereotypes in sight. All three are using savvy marcom strategies, and heavy doses of creativity, in an attempt to spark the U.S.-based marijuana industry’s growth.
A Budding Business
College students the world over often scheme of launching businesses with their peers, and when you attend college in Colorado these days, you’d likely be concocting ingenious ways to enter the nascent industry for which Colorado has become an unofficial home base.
Olivia Mannix and Jennifer DeFalco decided to leverage marijuana’s legalization there to found their own niche marketing agency, which they called Cannabrand. Both 2011 graduates of the University of Colorado-Boulder, with degrees in advertising, PR and communications, Mannix and DeFalco first launched MARCA Strategic in June 2013, a general marketing agency that’s still in operation, and then created Cannabrand as a specialized offshoot on the eve of marijuana’s legalization in Colorado in January 2014. Cannabrand now has 20 clients, including dispensaries, marijuana growing operations, and companies that sell vape pens (pre-filled pens that contain pot and are similar to electronic cigarettes), extracts, edibles and other marijuana accessories. Most of Cannabrand’s clients are based in Colorado and California, but the founders are in talks with brands in Washington, and in Florida and New York, where recreational legalization could be imminent.
To build their client base, Mannix and DeFalco first networked with industry leaders in Colorado, including those who already were selling marijuana for medical purposes. “We said, ‘Cannabis is about to go legal for recreational use, so what are your plans for transitioning from medical to recreational?’ We talked to different dispensaries about how rebranding would help them appeal to this new market,” DeFalco says.
In the consumer packaged goods space, brands, logos and general panache are important, so the two businesswomen wanted to work with dispensaries to help them create compelling visual brands and brand stories. They also saw he need for full-fledged marketing and advertising campaigns.
In July 2015, Mannix and DeFalco prepared what was to be the first TV ad for a marijuana product for its client Neos, a Denver-based vape pen maker, which sells its products in Colorado and to medical dispensaries in California. The ad, which was scheduled to air prior to Jimmy Kimmel Live on local station ABC-7 in Denver, was pulled at the last minute because of FCC concerns (pot is still illegal nationally). The ad showed images of the Colorado skyline and focused on nature and outdoor experiences, featuring twentysomethings at a concert and camping. A voiceover said: “You lead an adventurous life, always finding new ways to relax. Now enjoy the best effects and control with Neos portable vape pen, and recreate [as in, use recreational marijuana] discreetly this summer. Neos: Recreate Responsibly.” The tagline read, “A bold new way to unwind,” and the ad ended with a 21-and-over/Colorado-only disclaimer—similar to those “drink responsibly” messages for alcohol—and did not show the product.
Even though the drug is legal in Colorado, marijuana marketers must abide by stringent advertising rules set by the state of Colorado and other marijuana enforcement agencies. Cannabis brands must prove that at least 70% of the audience for each outlet in which they’d like to advertise is 21 years old or older. Facebook won’t accept marijuana-related ads, and outdoor advertising is not allowed.
Those requirements were met for the Neos spot, yet the commercial still was pulled, DeFalco says. “The commercial was approved by Channel 7 and our client, and was compliant with regulations because 97% of the audience was proven to be over the age of 21. It only needs to be 70%, so we were well within those guidelines,” she says. “They were concerned over the FCC situation, and at the last minute, they backed out.”
Adds Mannix: “They told us we weren’t allowed to show the pen, itself, but it was a great commercial and it was more of a lifestyle piece. There wasn’t anyone consuming, or any pictures of cannabis or the product. It was celebrating Colorado, with celestial skies and great imagery.”
The lifestyle branding approach helps Cannabrand’s clients break down stigmas about marijuana, DeFalco says. “A lot of our advertising shows people hiking or being outdoors and going about their lives, and they just happen to consume. That’s one way we’re trying to break down those stereotypes, to show that anyone can consume cannabis—professionals, outdoorsy people, whoever—to veer away from those images of lazy, unproductive potheads.”
Even though the TV spot didn’t air as planned, Neos generated a lot of PR as a result of the ad being pulled, and the company put the advertising investment to good use, posting the spot on YouTube and social channels, and sending it out in a customer e-mail blast, generating 300 million total impressions in a week, according to Mannix. “It actually was a success because we had a PR angle,” she says. “We alerted some journalists that we were going to have one of the first recreational cannabis commercials, and they were excited about it. Once it was pulled, the backlash was more: ‘Look at how simple this artwork is. Why did this not air?’ ”
Because of cannabis advertising restrictions, Cannabrand steers most of its clients toward industry-related publications that will accept marijuana-related ads, such as The Cannabist, Culture magazine, THC magazine, Marijuana Business and Dope magazine. Some publications, such as the Denver Business Journal and Westword, a Denver lifestyle magazine, publish ads for local dispensaries and marijuana products, as well.
PR, rather than advertising, is proving to be marijuana businesses’ best bet right now, Mannix says. “PR is the way to go. You can speak with journalists about your brand and get your message across that way, and target specific publications that fit your audience.”
To market their own agency, Mannix and DeFalco also rely on ways to prompt word of mouth, using their networking skills and industry knowledge, doing speaking engagements at conferences such as the International Cannabis Association’s Cannabis World Congress and Business Exposition, and attending legislative events in Colorado. They were present at the passing of the Limited Social Marijuana Consumption Initiative, which allows for adult cannabis consumption in a public or private space in Denver, including designated smoking areas in bars, and they work with activists and lobbyists on a local and state level, such as the Cannabis Patients Alliance, a group that helps provide patients with information about marijuana and connect them with doctors.
“There are a lot of restrictions on compliance, and regulations are always changing,” DeFalco says. “We’re constantly reading up on new laws, and we also work with compliance companies that help us with packaging and labels. Having those relationships from the get-go are great. We really understand the industry, and we’re seen as the leading cannabis branding agency because of where we’ve been and what we’ve been doing.”
Adds Mannix: “We’re not just an agency that’s providing marketing services. We’re also on the ground floor level, and we really care about this industry and helping to drive change.”
A Pot Prescription
Change—a lot of it—will be necessary before medical marijuana is marketed like other prescription drugs. Medical marijuana brands face one major hitch: the lack of approval from the U.S. Food and Drug Administration.
Two FDA-approved medications that contain cannabinoid, a chemical in marijuana, are used as an appetite stimulant and for treating nausea in cancer patients, and there’s interest in the drug industry to use marijuana to treat several symptoms from medical conditions, such as glaucoma, AIDS wasting syndrome, neuropathic pain, cancer, muscular dystrophy and seizures, but the FDA hasn’t yet recognized or approved the marijuana plant, itself, as medicine for any condition, says Michael Roth, healthcare practice leader at New York-based marketing agency Bliss Integrated Communication, whose clients include Eli Lilly and Pfizer.
“Getting medical marijuana FDA-approved is going to take many years and a lot of money,” he says. “Even if they get approval, they’ll be limited to what they can say about what’s approved for what [condition].” Although drug companies cannot yet get involved in the marketing due to the lack of FDA approval, some smaller drug companies are researching marijuana as a treatment for several conditions, he adds.
If FDA approval happens, medical marijuana would be marketed to consumers like most any other drug, Roth says—which likely means a lot of vague marketing messaging and ample disclaimers. “Their clinical trials will determine what they can or cannot say about the efficacy and safety of the drug. The FDA … would determine how much they could say [in advertising]. They also would need to talk about the side effects, if there are any.”
Approval will come, but not in the near future, Roth adds, so in the meantime, medical marijuana use—and related marketing—will continue to be conducted on a smaller scale. “Scientists will continue to pursue it no matter what, and I wouldn’t be surprised if the government didn’t start getting involved in some studies. The marijuana plant will need to be studied from a delivery standpoint and a safety and efficacy standpoint, and it will need years of trial, which haven’t been done yet. Right now, people are going to dispensaries and, as long as it’s legal, they’re using it.”
Medical marijuana currently is being touted in the U.S. for specific conditions through word of mouth, but because it’s not yet federally regulated, ads or marketing claims promising treatment for certain conditions can’t be created. According to Allen St. Pierre, executive director of the Washington, D.C.-based National Organization for the Reform of Marijuana Laws (NORML): “Wellness providers are already starting to nip around the edges. They’re using code words and trying to stay just beyond the scope of the FTC. It’s pretty Wild-West-like when it comes to the advertising.”
Noah Sodano, co-director of operations at GroundSwell, a Denver-based dispensary that has sold medical marijuana for the past four years and started offering recreational marijuana in April 2015, says that the marketing of medical marijuana currently resembles the marketing of homeopathic cures that you might find in a Whole Foods aisle. “There are a lot of claims out there where people say, ‘This is a cure for this,’ or, ‘If you want to get sleep, this will help,’ or there’s talk about pain relief, but the more likely that the federal government gets involved in that, any medical claims are going to get curbed way back,” he says. “We’re seeing a lot of products on the medical side that are marketed like you would see a vitamin section in a grocery store, talking about what conditions these things address. In terms of how they’re likened to pharmaceuticals, it really depends on where the market goes.”
Rather than creating ads that promise cures for certain conditions, GroundSwell’s medical side emphasizes professional-level customer service and patient relations, offering one-on-one patient consultations to help its customers create their own treatment regimen based on doctors’ recommendations. GroundSwell’s staff cannot write prescriptions and instead just offer advice, says Caitlyn Ewing, the company’s other co-director of operations. “Our patient relations specialists take time to elicit information and help ensure that every person who walks into the door walks out with the best solution they’re looking for.”
A New Target Who Tokes
When you talk about customer service with regard to cannabis, that likely conjures images of seedy street corners or Ziploc bags put to unintended purposes. The stereotypes surrounding marijuana are deeply rooted, so consumer perception could be marijuana marketers’ biggest challenge. Although the twentysomething male stoner culture still exists, of course, cannabis marketers are working to shift perception of their customers from those slacker types to a mix of white-collar executives, suburban moms and grandparents. “Yes, there’s always going to be that culture there that’s a fundamental part of why we’re here now, but the reality is, for everybody else who’s over 21 and potential customers, we have to find different ways of talking about it, particularly the experiences,” Sodano says.
Adds Ewing: “We see moms coming into the dispensary for the first time, or little old ladies who live around the corner. We get the full spectrum.”
When GroundSwell first opened its medical space four years ago, the front of the building, which now houses GroundSwell’s recreational space, was an art gallery. “It got people in the building. Every month they had a new show,” Sodano says. “The front of the building didn’t look scary. It was a nice gallery space, so it was a way of saying: ‘Come into this building. Welcome.’ People would say, ‘Wow, this is a dispensary?’ ”
GroundSwell’s recreational and medical spaces are designed to maintain that comfort level, and feature blond wood countertops and soft lighting. “We want to make sure that the experience we offer is the most non-threatening, welcoming atmosphere possible,” Ewing says. “It’s a premium boutique experience, versus Jamaican flags and [giant] joints.”
Even the word “dispensary” might be doing the business a disservice because companies like GroundSwell aim to create sophisticated retail experiences, Sodano says. “In the last four years, the change in the type of marketing you see from dispensaries has really moved away from that ‘headshop’ approach. The majority of players in the industry realize that they have to take their marketing to the next level.”
Cannabrand’s DeFalco agrees: “It the past, you’d go to a dispensary and it would feel seedy or underground. It’s starting to feel more comfortable and mainstream. They’re looking more like MAC stores. There are clean lines and custom fixtures. It’s inviting for newcomers because it doesn’t feel like you’re going to an illegal place or that you’re doing anything wrong.”
The shifting demographics of cannabis consumers are reflected in the growth of businesses such as Denver-based Inhale Mercantile, a luxury online headshop geared toward women, which sells vaporizers, pipes and bongs, cannabis-based skincare lines and accessories. “I am the stereotypical stoner now,” says Inhale Mercantile’s owner, Kim Gordon, a 48-year-old business professional who’s the mother of two teenage children. “There’s a new stereotype developing. Eighty-five percent of purchases are made by women and 93% of over-the-counter pharmaceutical sales are to women. That’s why everyone’s saying women are the key to the future of this because we’re the ones with the purchasing power, doing the buying of the pharmaceuticals that marijuana can replace. It becomes a health and lifestyle choice. I’m selling $500 [marijuana leaf] necklaces that aren’t flashy and in your face, and people are loving it.”
Gordon markets Inhale Mercantile’s products through word of mouth, and uses Instagram and Pinterest to drive traffic to her website. “Everyone talks about negative stereotypes, but ours is different because we’re a niche: We offer luxury women’s items,” she says. “Our brand is clean and simple, and that’s how we target everyone.”
Inhale Mercantile is not alone, according to Mannix and DeFalco. Cannabrand’s clients generally are broadening their target demographics, reaching out to more women and baby boomers. “In the past, cannabis brands were targeted toward men between the ages of 25 and 35,” Mannix says. “It was a male-dominated industry and all of the marketing was geared toward men. To target women, there are more health-oriented messages now, or there will be ads that say that cannabis is not as caloric as drinking and you won’t have a hangover. And with topicals, they say the cream is good for wrinkles, stuff like that.”
Read Complete Story on ama.org
Olivia Mannix, the founder of Cannabrand, is on a quest to transform attitudes towards marijuana
Cannabis has long been associated with hippies and students. But as marijuana is gradually legalised across the US and other parts of the world, growers and sellers are looking to change its image and attract new clients.Read More
Enter Olivia Mannix, the founder and CEO of Cannabrand: what is believed to be the first marketing agency dedicated to cannabis.
The firm launched in 2014, just as Colorado legalised marijuana not only for medical use but for recreation. Since then, the drug has been legalised in Washington, Oregon, California, Alaska, Nevada, Colorado, Maine and Massachusetts. As a result, hundreds of new firms have popped up, with celebrities Snoop Dogg and Willie Nelson among those getting on the bandwagon. But for those without marketable names and millions of dollars, a little bit of clever marketing can be hugely important.
“I’ve been living in Colorado for ten years and I went to college in Boulder, Colorado, which is a quintessential cannabis town,” she tellsThe Independent. And her stance on the drug is clear: “Cannabis is not just a ‘drug’; it’s a medicine which is something that needs to be communicated.”
In Colorado, a Rebranding of Pot Inc.
Step into a Colorado pot dispensary at random, and you’ll long for the luxuries of the D.M.V.
Metal bars cover windows. Vinyl signs are tacked to walls. Guys in hoodie sweatshirts greet you from behind the counter. Even the act of ordering the product itself is borderline absurd. What grown adult can respectfully walk into a store and ask for an eighth of Green Krack and a nub of Big Buddha Cheese, please?
“We’re weeding out the stoners,” said Olivia Mannix, the 25-year-old co-founder of a start-up called Cannabrand, an advertising agency devoted exclusively to marketing marijuana. “We want to show the world that normal, professional, successful people consume cannabis.”
Colorado became the first of two states to legalize recreational marijuana sales this year, paving the way for millions in tax revenue, and a new kind of consumer. That is why, on a recent weekend, Ms. Mannix and her co-founder, Jennifer DeFalco, were camped out in Aspen for a pot-themed (and pot-induced) brainstorming session.
he gathering was billed as a “writer’s retreat,” but mostly it involved talking. They discussed edible marijuana and flavor pairings over a meal prepared by Melissa Parks, a chef trained at Le Cordon Bleu (THC-infused truffles optional). They contemplated strain hybrids and herbal remedies, with commentary from a self-described “cannabis sommelier,” as well as the “gangapreneurs” who have flocked to Colorado since pot was made legal, not wanting to miss out on the so-called green rush.
And, of course, they talked about branding: How can the pot industry shed its stoner stigma?
Pot has practically gone mainstream. A majority of Americans now supports legalization efforts. There are coming ballot measures in Alaska, Oregon and the District of Columbia. Yet when it comes to pot culture, the industry remains comically rudimentary.
Dispensaries still “look like underground abortion clinics,” Ms. Mannix said. Advertisements are full of “women with whipped cream straddling bongs,” Ms. DeFalco said. And the old stoner stereotype endures: lazy, mostly men, rolling joints in their parents’ basement, covered in Doritos crumbs.
“The average person, when you say the word ‘marijuana,’ they have a visceral reaction,” said Paul Armentano, the deputy director of the National Organization for the Reform of Marijuana Laws, one of the oldest of such groups. “There’s a reason the alcohol industry spends tens of millions of dollars to advertise and market their products. Successful branding pays off.”
So where do branding specialists begin? For starters, they would like to stop calling it pot, thank you very much. Better to call it cannabis, the plant’s scientific name. (Less aggressive.) Rather than “smoke,” one “consumes” the “product.” (Subtler.) For those in the business — or cannabusiness, as it’s known — 9-to-5 chic is crucial, said the Cannabrand owners: no sweats, no tie-dye, no Bob Marley T-shirts.
While smoking (or rather, consuming) on the job seems to be par for the course, it’s not without a certain decorum: a dainty-looking joint or perhaps a vaporizer pen (like an e-cigarette for weed) that slides neatly in a purse or pocket.
Cultural crossover is already well underway in the state. The Colorado Symphony made headlines this summer when it began a series of shows called “Classically Cannabis,” in which free-spirited music lovers were invited to B.Y.O.P.
Throughout Denver, there are monthly cocktail and cannabis events, put on by a local party planner, as well as a weekly painting course called Puff, Pass and Paint, hosted in a charming Victorian studio — an effort to, as Heidi Keyes, the cheerful 28-year-old instructor, put it, blend “Mary Jane and Monet.”
Cannabrand recently rolled out a yoga class called Vape and Vinyasa. The company is working on an app that will allow users to place their pot order online and skip the line (as they describe it, “like an OpenTable for weed”).
“The thing is,” said Ms. DeFalco, who is the duo’s creative director, “baby boomers are smoking, stay-at-home moms are smoking, business executives are smoking. But for so long, they’ve done it behind closed doors. We want to bring them out of the shadows.”
And they want to keep them out there. Meg Sanders, the chief executive of a network of dispensaries called Mindful, recently hired Cannabrand to do an overhaul of her company, formerly called Gaia.
The new name was chosen to reflect the brand philosophy, she said, but also to modernize its look — in everything from logo to the uniforms worn by employees to the dispensaries’ shabby insides. Many of the marketing materials do not even mention the word “cannabis” (or any other word for pot).
“I’ve heard time and time again, ‘I walk into a dispensary and I feel like I’m walking into a stoner’s basement,’ ” said Ms. Sanders during a tour through the expansive factory where her plants are harvested. (It also acts as the company’s headquarters.) “So we really had to think, ‘How do we package our product in a way that wherever we go — whether it’s the most liberal or the most conservative clientele — people look at us and think, “I get it. I’m not offended by this.” ’ It’s not Joey’s weed shop, you know?”
Ms. Mannix and Ms. DeFalco studied together at the University of Colorado at Boulder, though neither has a business background (Ms. Mannix studied communications, Ms. DeFalco advertising). They are young, working overtime trying to project a business savvy, but they’ve also filled a hole in the industry that the mainstream business sector has yet to touch.
For example, the women were among the sponsors of a recent career fair called CannaSearch to recruit for some of the 500 open pot jobs in the state. The jobs included dispensary workers, yes, but also horticulturalists, social media managers and marketing executives. The applicants showed up — among them, C-suite level executives, said Ms. Sanders — but not a single mainstream brand had even a sponsorship presence.
“There is a huge untapped market here,” said Ashley Picillo, a 26-year-old former teacher who runs a cannabis events agency and was the fair’s co-organizer. “It’s about reaching nonconsumers. Women. Young people. Business professionals. Grandmothers and soccer moms. People like me.”
In other words: more Aspen, less Cheech and Chong.
To Keep Business Growing, Vendors Rebrand Pot’s Stoner Image
From the outside, Jan Cole’s recreational marijuana store in Boulder, Colo., just feels welcoming. Big glass windows let in natural light, and the walls are painted in soothing earth tones. Cole used her background in spa management to build a “warm and inviting” pot shop that puts customers at ease.Read More
In fact, the store’s name, The Farm, is so inconspicuous, “we have a lot of people who come in think that we might be an organic food grocer or something,” she says.
And that’s exactly who Cole is trying to attract: the tote-bag carrying, socially conscious, natural-food crowd. She advertises her cannabis as pesticide-free, organic and, of course, locally grown.
“I don’t think we’ll ever be as big as Whole Foods, but Whole Foods is a good example of the type of clientele that we attract,” she says.
This all reflects Cole’s attempt to break away from the pack. With recreational marijuana use now legal in Colorado, marijuana businesses are finding themselves competing for customers in tight marketplaces.
About 200 recreational marijuana stores have opened in Colorado since Jan. 1. And as the market becomes more and more saturated, everyone is looking for an edge.
Reaching Beyond ‘First Adopters’
Jennifer DeFalco is creative director for Cannabrand, a marketing agency named for a mashup of “cannabis” and “branding.” DeFalco and her business partner are banking on Colorado’s marijuana industry becoming big business — one in need of flashy logos, memorable catchphrases and eye-catching ads.
“Cannabis is here to stay. It’s not going anywhere. The industry is just beginning,” she says.
Because it’s so new, DeFalco says that most people who have already popped into a recreational pot shop are the first adopters — people who have tried marijuana before. But the whole point of marketing is to grow a business by reaching people who are on the fence about trying marijuana.
“So part of the rebranding of cannabis is really just making the dispensaries more inviting and more welcoming,” she says.
But when it comes to advertising, it’s not as simple as buying ads on the TV or radio. State rules in Colorado forbid shops from advertising on media where more than 30 percent of the intended audience is younger than 21. That kind of audience data is not readily available. If challenged, it could be tough for marijuana businesses to prove kids aren’t seeing a particular ad.
“One thing that is interesting and important for the industry is this question of exposure to kids,” says Margaret Campbell, a marketing professor at the University of Colorado Boulder. To reach new markets, she says, the industry as a whole needs to strip away the marijuana user stigma.
“[Businesses are] going to try to go beyond their core quote-unquote ‘stoner user’ to expand and have it be acceptable at cocktail parties,” she says.
Losing The Stoner Stigma
At a recent cocktail party at a gallery in Denver’s arts district, Amy Dannemiller is trying to do just that: build a new business around removing the stoner stereotype.
Each month, Dannemiller, who uses the alter ego Jane West when planning pot gatherings, throws upscale parties where attendees bring their own marijuana and pay a $95 charge for fancy hors d’oeuvres and an open bar.
“It’s just basically a big social event where everyone can enjoy cannabis like they would a glass of wine,” she says.
But even the party’s attendees say that, culturally and legally, marijuana isn’t yet the same as a glass of wine — employers can still drug-test workers. One woman at the party, for example, declines to give her name, saying her job could be at stake.
“That’s the hurdle. People can’t be associated with it,” she says. “Everyone does it, but they can’t tell anyone about it.”
That’s a tricky legal hurdle that’ll take a lot more than advertising and branding to overcome.
Weed Marketing Faces High Marketing Hurdles
Colorado women making over the image of the cannabis industry
Christie Lunsford used to feel so lonely.
As a medical marijuana caregiver, she would attend cannabis industry meetings and be the only woman in the room.Read More
“The first time I saw another female, I was really excited. That was in 2010,” said the 43-year-old Denver wife and mother, who has branched out to cannabis marketing, product development and sales.
These days, she attends some cannabis-industry meetings that are all-women — and all about women. What began several years ago with a trickle of women tiptoeing into the brave, new weed world has turned into a stream in Colorado.
This summer, the state will have its own cannabis network for women, Women Grow. The new organization will stage educational symposiums and regular monthly events where like-minded women in the industry can connect and mentor or be mentored.
More than two dozen women in the Denver area, ranging in age from late 20s to mid 60s, are running large grow operations, opening storefronts and developing topical products and edible lines. Women are selling marijuana-friendly real estate, creating software for the industry, taking the reins at cannabis testing labs and climbing into leadership roles in the policymaking and legislative arena.
The intent is to tip the statistics that show nearly half of men admit to having tried marijuana but only a third of women have.
They are persuading more women to try to consider cannabis by staging pot-themed events that appeal to the more feminine side of users, including spa and yoga retreats, upscale culinary and art soirees, bachelorette parties and even symphony and marijuana mashups.
“We are encouraging women to come out of the woodwork,” said Jane West, owner of Edible Events Co. and founder of Women Grow. “We need their voice in this industry.”
Women are not only jumping into an industry built by men and cashing in on the explosion of business opportunities that Colorado’s legalization of marijuana has created. They are also gentrifying and gentling pot’s testosterone-laden image.
That old stereotype of a woman in skimpy clothing suggestively holding a bong? So yesterday, these women say. They point to their classy websites and ads where women are depicted in business clothes, not bikinis, and the appeal is aimed more at the malbec and tapenade crowd instead of “stoners.”
“Women have been more like accessories in the industry. They’ve been objectified and used to draw in men. No more. Now, we women are saying we enjoy cannabis as well,” said Olivia Mannix, who teamed up with Jennifer DeFalco to form the cannabis marketing company Cannabrand.
They recently launched an online “canna-culture” store where women can buy stylish clutches along with artsy pipes and fancy stash boxes.
“Classin’ up the joint” is the way Diane Fornbacher describes the female impact on the cannabis industry in “Ladybud,” her magazine devoted to women’s issues related to weed.
Fornbacher has been one of the pioneers in the pot industry. For about two decades, she was a writer for “High Times” and the pot-growing magazine, “Skunk.” In more recent years she has been one of four female members on the 19-member governance board for NORML, a national organization devoted to reforming marijuana laws.
Fornbacher last month moved to Highlands Ranch from New Jersey, drawn by both the legalization and the growing network of female ganjapreneurs. “There is a kind of sisterhood here,” Fornbacher said.
That sisterhood has a wide range of women who support each other. They praise each other’s products and services and send customers each others’ way.
NORML is also carrying out an outreach for women nationally with the NORML Women’s Alliance, which is billed as an offshoot organization for women against prohibition.
The Colorado group will be more about women trying to support each other in a business that is complicated because it is new and it falls between conflicting state and federal laws.
“It’s a fantastic, exciting industry,” Lunsford said, “and we want to be leaders in it.”
A look at some of the other women who have emerged in the female network of the cannabis industry:
• Julie Dooley, a Denver mother of three, who turns out healthy infused products like Grown Up Granola and Sensible Seed Mix as president of Julie and Kate Baked Goods.
• Jessica Billingsley and Amy Poinsett. They started the MJ Freeway Business Solutions company to develop software for the cannabis industry.
• Genifer Murray who put her microbiology degree to use by starting CannLabs Inc., a THC testing lab, and Heather Depres, the lab director at CannLabs who is lending her expertise to the state Marijuana Enforcement Division.
• Kristi Kelly, who presides over several storefronts and two industiral indoor grow operations with her Good Meds Network.
• Meg Collins, the director of the Cannabis Business Alliance, an industry trade group.
Branding marijuana for a changing market
The market for marijuana is changing, at least in the states where the drug has been legalized. In Colorado and Washington, where recreational marijuana is legal for adults, cannabis sellers are finding new approaches to the way they sell their products. The new business plan, for many, includes advertising and marketing — a shifting image.Read More
That’s where Cannabrand comes in. Olivia Mannix, on of the founders of the marketing company, says that Cannabrand focuses on marketing cannabis products in legal markets. That includes working with a variety of companies, not just dispensaries.
“We take on clients ranging from the tech space to dispensaries, to grow operations,” Mannix says. Cannabrand works on branding for these companies, and aims to make the retail experience in the marijuana industry more accessible.
That include everything from edible taste testing, to logos, packaging, and advertising.
But advertising and selling a product that’s largely classified as an illegal drug can be trick. Brands bump into problems with trademarking — which is not a state issue, but a Federal one. “Trademarks are a problem,” Mannix says, “if the name has to do with marijuana/cannabis, it’s going to be difficult to have your trademark go through on a Federal level.”
Mannix says that the biggest logistical problem for marijuana companies and advertisers is banking. Most banks won’t finance companies associated with the drug. “You’re not supposed to use credit cards,” she says, “and a lot of these companies have bigger holding companies that aren’t associated with cannabis so that they can open a bank account.”
This workaround can help companies deal with credit, but when banks discover the association, the accounts can be closed, meaning that many marijuana companies deal almost exclusively with cash.
“There are some new banks coming up that are actually FDIC insured for the marijuana industry,” Mannix says. She hopes that banking restrictions will ease for her clients, but for now, but of the industry is cash-only — a model that remains a roadblock to legitimacy.
Mannix’s other key role is working on destigmatizing marijuana. She uses the words cannabis and marijuana instead of weed, pot, or grass. She says a lot of the stigma associated with marijuana has to do with old propaganda. Cannabrand touts potential health and social benefits associated with cannabis products — it’s intended to make the plant more accessible to a broader audience, but many people still balk at the idea of recreational marijuana, and advertising related to marijuana.
“It might sound insane, but this is an industry, this is a marketplace, and every industry needs to have some type of branding and marketing and advertising associated with it,” Mannix says, “yes, one might think that marijuana sells itself and it doesn’t need to be marketed, but now that this is a legal industry it’s a competitive marketplace, and companies need to differentiate themselves.”
Cannabrand works with about six clients in any given month, and Mannix says they market to a wide range of demographics, including younger people, older people, and an upscale professional market.
Cannabrand stays informed about laws and regulations and works on education when it comes to consumption. Mannix says that one of the biggest gaps in the industry is education about recreation use, including things like where to consume, and how much.
“That’s something that we’re really trying to promote,” Mannix says. When it comes to consuming marijuana she says “it’s very important to start low and take it slow.”
Changes to the physical spaces where marijuana products are sold are helping with stigma and image, Mannix says. “There actually are a lot of beautiful dispensaries in the Denver and Colorado area that have really been able to change their interior design. Some of them look like Mac stores, some of them just have beautiful woodwork, and a lot of the other dispensaries are evolving their brands and making their space more comfortable for their target market.”
Mannix says she hopes the marijuana industry will become more like the liquor industry, where it’s easier to advertise and reach a wider audience. Her hopes for the future of marijuana marketing? “I’d really like to see there be more leniency so that marketers and advertisers can do their job for the cannabis industry.”
Building a Cannabis Brand … Straight
With all the changes in Colorado and Washington state regarding marijuana smoking and possession, I was guessing there’s a veritable hematoma burgeoning of small business and entrepreneurial activity in that industry. I was right (for a change).Read More
One might imagine a small, smoke-filled office full of “Jeff Spicoli’s,” toking on all manner of spliffs, blunts, bongs, chillums and the like; urgently ordering delivery pizzas, as they plot the rise and dominance of the cannabis sector in America.
Well, though there are certainly those ‘budding’ entrepreneurs smoking like chimneys, ‘one’ would be wrong to assume that they are all riding Puff the Magic Dragon’s tail.
And now for something completely different: There are two young ladies in Denver, Colorado who are quietly building a small empire especially designed to help the cannabis business sector build their brands and increase business. Though they both admit to smoking weed occasionally, I get the strong impression that Olivia Mannixand Jennifer (Jen) DeFalco spend the preponderance of their waking hours straight and focused on their business goals–which just happen to involve marijuana instead of toothpaste.
Cannabrand is these ladies’ real-world extension of what they strongly believe is an enormous opportunity: the rising cannabis industry’s need for Branding, Marketing and all the ingredients like strategy, website, graphic and creative development.
As you can certifiably see from the photos above, there’s no evidence of toking, Doritos or red eyes in the Cannabrand’ workday.
Note to Reader: I am the father of a daughter and while I will strive for objectivity, my opinions, observations and everything I write here should be viewed in that overarching, helicoptering and loving context. I was not in favor of complete and total legalization. That however, might be changing.
Both 25 years old and filled with the superb, youthful exuberance that entails, these gals met while at the University of Colorado at Boulder. Boulder’s a great town to meet and make a friend, they chime chirpily. Jen is the creative mind behind Cannabrand, enjoying the ‘imagineering‘ for clients and Olivia is more strategic and overall business-oriented. They make a highly-complimentary pair of ‘entrepreneuresses.’
“Going to college in Boulder,” Jen DeFalco told me, “a lot of our friends smoked pot, of course. But we wanted to try and take the stigma away from cannabis. We see cannabis as a healthier alternative to alcohol.” Olivia Mannix chimed in, “Most traditional agencies won’t associate themselves with cannabis and we wanted to take advantage of that and provide our branding, marketing and website development services.” Serving an under-served market seems to be these ladies’ clear strategy.
Mannix, who’s an unrepentantly passionate skier had a personal, defining, medical moment involving weed or more specifically, cannabis edibles. “I had blown out both knees skiing,” she told me painfully, “and the Percocet the doctor gave me didn’t help and made me feel worse. When I ate some (cannabis-laced) watermelon tarts, I felt much better and was in less pain.”
DeFalco started a newspaper–of all things–in her neighborhood at age 10 and then went hawking it door-to-door. Mannix was selling makeup door-to-door at age 13; both early jobs were harbingers of their entrepreneurial thrust later.
Hailing from Wilton, Connecticut, Mannix told me they’re both concerned about this new law working out well for all those concerned. “It’s a lot cleaner because people can grow and use it openly and not hide it,” Mannix told me. DeFalco concluded, “It’ll be handled a lot like alcohol is restricted to prevent kids from getting it or adults getting it for them. We’re totally against driving on alcohol, drugs or cannabis. We’re really against that.”
Alan Katzker is the founder of Boulder Elevated Events and a Cannabrand client. Katzker is really amped up and hard-charging about the Mannix/DeFalco service he’s received and seems utterly genuine to me. “I absolutely love Jen and Olivia … love, love, love,” he gushed. “They helped me re-brand and built a great website for me. I’m very impressed with them–they are cutting-edge and real pioneers.” In a key supporting act for his satisfaction stated above, Katzker has connected the Cannabrand’ ladies with a friend of his who is a very successful “cannabis entrepreneur” and that represents the most powerful form of marketing known to man, WOM (Word of Mouth).
Weedmaps is a local Colorado success story and has been described as the “Yelp for marijuana dispensaries.” It started out as a kind of early Internet directory for legal medical marijuana dispensaries for sick patients, which has positioned it well for the new recreational user market. “I met Jen and Olivia at an Edible Events function,” Barry Bard, who works at Weedmaps told me, “it’s so cool to see other young people starting their own businesses.”
And the Cannabrand gals aren’t just branding, marketing and promoting their clients’ businesses, they’re also promoting their own enterprise with policy-type, op-eds on their Cannabrand Tumblr blog.
In an effort to paint a more complete picture of these two young ladies, I asked them a few questions regarding Colorado and the mesmerizing ‘gold rush’ activity there around cannabis.
1. Do you think Colorado’s cannabis legalization will lead to higher drug addiction in CO? Why?
Jennifer DeFalco responded:
“I do not believe in the slightest that Colorado’s cannabis legalization will lead to higher drug addiction in Colorado. First off, cannabis is not a physically-addictive substance–it’s even reported to be less addictive than caffeine. If you’re asking if it’s a gateway drug, I’d have to disagree with that theory. People who choose to alter their minds with hard drugs would probably also choose to experiment with marijuana and alcohol, regardless. So, do I think that consuming cannabis influences the average person to use and abuse hard drugs later down the road? No.”
2. Do you think Colorado’s cannabis legalization will lead to more DUI’s and DUI deaths in CO?
Jennifer DeFalco responded: “I do not think that Colorado’s cannabis legalization will lead to more deaths or DUI’s in CO. Since cannabis is much safer to consume than alcohol (one cannot overdose and die from marijuana), I would argue that if cannabis consumption replaces alcohol consumption, you will see a decline in fatalities – including those related to traffic. A recent study reported by PBS even cites that the rate of traffic-related deaths drops by about 9% in states after they legalize (medical) marijuana.”
3. Do you worry about cannabis legalization in CO making it easier for young people to get and start using cannabis?
Olivia Mannix responded: “No, regulating cannabis–if anything, will make it more difficult for young people to get a hold of it, because with regulation comes restriction. My friends who grew up in Boulder said it was easier to get marijuana than to get alcohol in high school, because alcohol is regulated. Now that cannabis is regulated, it will be more difficult for teens to get a hold of it, because it’s slowly distancing itself from the ‘black market.’ Marijuana regulation will also reduce teens’ exposure to harder drugs now that it will be off of the illegal market (where hard drugs are found). The federal government has stated that teen marijuana use has decreased since it has been regulated.”
4. What do you think of recent reports that CO food stamp cards are being frequently used to withdraw cash from cannabis dispensary ATMs to buy cannabis?
Olivia Mannix responded: “I have heard conflicting reports, and believe that these claims are false. SNAP (Supplemental Nutrition Assistance Program) cards, cannot be used to withdrawal cash, they can only be used when purchasing food from authorized supermarkets.”
Of course, this nation’s eyes are upon Colorado and Washington state as the forerunners and a bit of an experiment in legalization. Screw-up, and America will be done with the idea perhaps forever. Succeed and most of the USA could look like Amsterdam within a few short years. What I’ve learned in the writing, research and conversations is this: Colorado is way ahead of Washington state because they had more experience with the medical marijuana legalization first, and, the industry people in Colorado are all aware that a misstep could be ‘game over,’ so are laser-focused on doing this right.
“State regulations are promoting compliance amongst owners and operators in Colorado. There’s no reason to break the rules,” said Joe Tremolada, who’s a cannabis industry veteran experienced in the creation, financing, growing and distribution areas of this growing field.
Troy Dayton is the co-founder and CEO of The Arcview Group, a San Francisco-based, membership, investor network. According to Dayton, Arcview is “the Shark Tank of the cannabis industry” and doesn’t invest their accredited-investor members’ money directly but gives them the parade of potential companies to invest in and offers them deal-flow; investment advice and market research are Arcview’s core products. Dayton and Arcview, like the ladies at Cannabrand, are placing big bets that the Colorado legalization–past the pre-existing medical marijuana usage–will succeed. Both have staked their businesses on this industry winning big.
I asked Dayton why he was so sure. “We’re not talking about making a new substance available,” he told me passionately, “we’re talking about a product that already exists and is widely available. It’s so much safer than alcohol or pharmaceuticals. There will be a net public-safety benefit out of this. The ‘X-Factor‘ net benefit out of this is, for instance, I’m not a big cannabis consumer, ‘but when I do,’ I find it really helps me relax and I can see the ‘big picture.’ I have ideas and wonder about things that are really productive.” I have found this too, back in the day, that it’s not all “wow … man” and couch-potato inactivity. Key point: The start-up funding and access to life’s-blood capital so climacteric to economic success will have to fast materialize for the cannabis industry or it risks inertia. Arcview alone, seems to be leading the charge in this essential monetary component.
Recently, CNBC did a great documentary entitled, “Marijuana in America: Colorado Pot Rush” which features many of the leading proponents of Colorado’s new law.
Mason Tvert is the Director of Communications for the Marijuana Policy Project(MPP) and seems so much more than that. CNBC calls him “the hero” of the push to legalize weed in Colorado and there’s much to support that claim. Tvert doesn’t come on strong and apparently prefers the ‘get more flies with honey’ method of discourse. I asked him why he had chosen the life path of pot policy and legalization–did he have some connection with a medical weed user or what? “I was harassed by law enforcement in college and while I’m not a big smoker now, I do enjoy it once in a while. The MPP is the largest marijuana policy organization and my primary concern now are the optics: how legalization is portrayed in the press and by its opponents. For instance, anti-legalization people often claim that teen use is up, when teen use has actually gone down.” What about further restrictions for children, parents and so on? “At some point, we need to trust sensible human beings to make the right decisions.”
When Tvert tells me that he’s focused on other states now that his work in Colorado is done, I ask him what his informed bet would be for the next state to topple and legalize? “It’s very likely Alaska will be next,” the “Don Draper of pot” said. And he should know.
As I digest all the information, quotes and strategies I’ve heard and learned, there are some strong pros and cons on both sides of the future possibilities for Colorado, cannabis and ultimately Cannabrand’s success:
**The possibility that children might have expanded access to marijuana. This is a potential nobody in their right mind wants and especially for parents, has caused a groundswell of concern.
**If the newly legal users use it in irresponsible ways–and drive–there will be a corresponding and tragic increase in DUI’s and DUI-related deaths.
**If the overall ambition of new users and previous users smoking more is horribly reduced and has a smothering effect on the economies of the two states in an already depressed economic environment, then the frequent pro-legalization argument about increased tax revenues and economies of scale goes right out the window. The converse will be true.
**Contrarily to the above point about access by children, sick children (as young as six years old or younger) might now have expanded legal access for much-needed help for their pain and illnesses. This is something the parents, ironically, have been trying to get done for sometime now. So this seems very positive and good.
**If pot users can resist the need to drive and a reverse-correlation can develop, where weed users can just know they shouldn’t get into a car and drive when stoned … this law will be almost home free.
**If it proves true–that the experience both Troy Dayton and I have had–wherein smoking pot actually increases idea generation, a ‘thinking-outside-of-the-box’ imagination and stimulates a kind of entrepreneurial drive and special zeal, well then, the GDP, small business sector and overall economy of Colorado will certainly soar.
That’s a lot of ‘ifs,’ I know.
So, nobody knows what will prove true; least of all me. But if what I’m hearing from the people I’ve heard talking is accurate, then I feel strongly that Colorado will succeed and the law will be there to stay. And that’s from a guy who was strongly against the idea in the first place.
Meanwhile, Jen & Olivia keep working to expand their cannabis clients’ businesses … and their own. They’re always brand-building. This week, they’re launching the Cannabrand Shop, a website specially designed to sell their own and their clients’ products and merchandise.
In my three decade journey to discover what makes entrepreneurs tick, I’m zeroing in on the old maxim, “Do what you love and love what you do.” If this is the essential entrepreneurial element, then Olivia Mannix and Jen DeFalco are on their way.
Who Will Become the Starbucks of Pot? Handful of startups want to be America’s favorite marijuana brand
During a typical Fourth of July weekend, 1500 Esperanza St., a whitewashed deco warehouse in the Boyle Heights district of East Los Angeles, is deserted. But this year, a line snakes down the broken sidewalk out front and wraps around the bend of Union Pacific Avenue, as 4,000 people suffer the searing heat for an event called the California Heritage Market.Read More
While many cities boast farmers markets, this one is unique: It’s the first in California—and likely the entire country—devoted exclusively to pot.
Here, some 50 growers proudly peddle their homegrown weed, not only in the form of dried flowers and buds but also the myriad products that can be concocted from them—from cooking oils, tea and candy to ointments, sunscreen, even soft pretzels.
Cheryl Shuman surveys the crowd with satisfaction. Not only did she help organize the event, but her own brand of weed—Beverly Hills Cannabis Club, a favorite of celebrities with gated mansions up in the Hollywood Hills—is the most recognizable product there. Scratch that. “We were the only branded product there,” she boasts during a phone interview a few days later.
While all the vendors here are expected to bring to market only the finest-quality herb, very few, apparently, showed up having taken Marketing 101. “Growers were coming up to me and asking, ‘How do we make ourselves different? Maybe we should come up with a logo and a name,’” Shuman reports. “The branding of cannabis doesn’t exist yet.”
There is a good reason for that. Since the federal government still classifies pot as a Schedule I controlled substance and only two states (Colorado and Washington) permit its sale on a recreational basis, market conditions are not exactly ripe for branding. “You have 20 states with some form of legalization, a number of them very restrictive, and a small customer base. So there’s not a national opportunity,” explains Taylor West, deputy director of the National Cannabis Industry Association. But, she hastens to add, “I think we’re likely to move in that direction.”
That’s actually happening fairly quickly. Industry watchers predict that 14 states are likely to adopt some level of legalization in the next five years. (The New York Times over the weekend even came out in favor of legalization.) They have powerful incentives to do so. Not only do most Americans favor legalization (58 percent, according to a 2013 Gallup Poll), but legal cannabis amounts to tax revenue for cash-starved municipalities. Colorado, for example, is on track to collect $134 million from its first year of legal pot sales. And while the DEA still publicly pledges to eradicate marijuana, a growing number of elected officials, including President Obama, are of the belief that the feds have better things to do than go after stoners. If the legalization trend continues at a pace many expect it to, the legal marijuana market—worth an estimated $2.57 billion today—will hit $10.2 billion by 2019.
It translates to a veritable gold rush for pot startups (“ganjapreneurs,” as they’ve been called)—companies that market everything from vaporizers to fashion-forward receptacles for your stash. But feeder brands that exist for pot are justifiably separate from actual brands of weed, which are still pretty rare. As Joe Hodas, CMO of the edible cannabis brand Dixie Elixirs, observes: “The closer you get to the plant, the fewer the people involved.”
That said, there are a handful of brands out there, and they’re growing. And that has raised some questions among traditional marketers. We all know that every category, from European imports to beauty products, has its leading brands, so which are the brands shaping up to dominate cannabis? Is the day coming when we could see a Marlboro (or Starbucks, or Mercedes-Benz) of pot?
Ron Throgmartin thinks so, and believes his company is a contender. “We saw the opportunity to come into this because there are no specialty brands in the market,” says the CEO of Kirkland, Wash.-based Diego Pellicer. Named after a legendary hemp grower in the colonial-era Philippines, the brand is sold through dispensaries, though its ambitions go well beyond that. “We’re hoping to create the Apple of marijuana,” Throgmartin boasts.
It’s not a surprise that some of the best, brightest and most ambitious entrepreneurs have designs on the space—Diego Pellicer’s seed money comes from Jamen Shively, a former corporate strategist at Microsoft. But building a cannabis brand isn’t as easy as throwing money at it.
That’s because most consumers of cannabis don’t think in terms of brands just yet. The majority of legal pot is sold through dispensaries—storefronts grafted onto large cultivation spaces. While it comes in assorted varieties (indica, sativa, ruderalis), it’s mostly sold as a commodity.
Throgmartin thinks the market will quickly evolve to the point where consumers will shop for their favorite pot brands just like they shop for a preferred brand of beer or sneakers. But getting there will mean convincing buyers that branded pot is worth paying more for—a leap that will require not only the highest quality product but also some slick marketing.
Diego Pellicer’s packaging, which features a 19th-century rendering of Señor Pellicer and a wood-grain design, has the look and feel of a box of pricey Cuban cigars. “We’re going to deliver an experience unlike anything that exists now,” says Throgmartin, whose plans call for boutiques in Seattle and Las Vegas sporting lots of glass, lots of light and plenty of parking. “It’s going to be a beautiful store, not a typical head shop or dispensary with bulletproof glass,” says the CEO.
Despite their insistence that they are selling medicine, these cannabis dispensaries look more like pawn shops than pharmacies, with their bright neon baggies of Bubba Kush and armed security guards. Seattle’s The Green Skunk, for example, advertises “Free Gram Friday” and features a heavy-lidded, thoroughly baked Pepe Le Pew as its mascot.
Any marijuana brand with serious ambitions will have to move beyond such whacky-tabacky tactics, says Olivia Mannix, co-founder of the marketing agency Cannabrand, whose mission, she explains, “is to rebrand cannabis and debunk myths and stereotypes associated with the plant.” Mannix thinks the wholesale legalization of pot for recreational use in the U.S. may be as soon as a decade away, and only the “more tasteful” brands will stand a chance of capturing major market share when that day arrives.
Cannabrand’s clients include Bold Harvest, an edibles maker that expects to enter the market by early next year. Its founder, Jonathan Umbel, a 30-year veteran of the restaurant industry, hopes to differentiate his purees, mints and energy drinks in part by linking up with a celebrity chef to endorse the products.
Umbel and other startups will find themselves going up against the 800-lb. gorilla of the space, Dixie Elixirs, which dominates the edibles market.
“Not only do we have the potential to be a national brand, we’re intent on making that happen,” says Hodas. Billing itself as “the future of cannabis,” Dixie Elixirs has 30 products on the market, ranging from blueberry soda to chocolate chews. With its brushed stainless-steel bottles and clean, minimalist design, Dixie’s packaging would not look out of place on the shelves of Whole Foods (which, for the record, does not carry the products). In short, the brand profile is more Scandinavian than skunk.
“One of the reasons you see so few brands is because of the regulations,” says Hodas, citing the scores of state laws that govern products containing THC. In fact, since no cannabis product can be transported across state lines, brands like Dixie Elixirs cannot rely on the traditional hub-and-spoke distribution system most brands take for granted. To get around that, the company recently formed Dixie Brands Inc., which is licensing the brand name to growers in other states.
Like many in the trade, Hodas likens cannabis marketing to that of alcohol. “You could say that all bourbon is bourbon—it’s the same proof, so what’s a brand matter? But it doesmatter,” he says. “We know people have an affinity for product quality and consistency, which is what we offer.”
It follows that if a consumer will reach for a name brand of pot, some will prefer a luxury brand. When they do, Shuman will be waiting.
Her presence at the East L.A. farmers market was a bit of an anomaly. She usually rubs elbows with fancier folks. Until recently, you’d have to be invited to a celebrity bash in Bel Air to sample pot from her Beverly Hills Cannabis Club, whose premium bud fetches $700 an ounce. But seeing an opening in the market for high-end weed, Shuman recently decided to “crank it up,” as she says.
“Up to this point, our product was never available to anyone outside of our club members, but because of the success we’ve had, I’m doing more grow operations,” she says. Shuman is partnering with select growers in Denver and Seattle, where high-end outlets are also being planned.
The brand’s image is already well established. BHCC comes wrapped in 14-carat gold leaf and its logo is a clever riff on the famous Beverly Hills municipal signs seen throughout the neighborhood and designed by Warner Bros. in the ’30s. “It was the best thing I’ve ever done, making the decision to go with graphics and product design,” Shuman says.
Given the projected growth of the cannabis trade (forecast at 68 percent in the next year alone, according to ArcView research), why aren’t there more contender brands out there? Part of it has to do with the seedy—and dangerous—nature of the business.
Dispensaries have bulletproof glass and heat-packing security guards because banks and credit card companies refuse to do business with them, which makes them cash-only enterprises—as well as targets for thieves. Such a Fort Knox-style atmosphere is the reason “there’s nobody doing any amount of in-store or point-of-sale marketing,” as Hodas explains.
Thus, as Diego Pellicer’s Throgmartin notes, pot brands don’t have any sort of model for expansion. “Federally, with the semi-legal environment we’re in as producers and growers, there’s hardly any experience in how to move forward,” he says.
Shuman is more blunt. “If you put your head out of that little cannabis closet, you risk arrest and prison,” she says.
What’s more, traditional print and broadcast media will not accept ads for weed, nor will Facebook, Twitter or Google AdWords.
“Until cannabis is off Schedule I federally, that’s the reality,” says cannabis entrepreneur Vincent Mehdizadeh (see sidebar). “It’s Prohibition-era alcohol what you’re seeing with cannabis right now.” There’s nothing, meanwhile, stopping a marijuana marketer from setting up a website (“search is the Holy Grail,” as one seller puts it), but cannabis brands will largely be confined to obscurity as long as they are ignored by major media organizations and agencies.
Ad agencies seem as wary as anyone about doing business with marijuana brands. Take Eric Schiffer, CEO of DigitalMarketing.com, who has plotted digital strategy for Fortune 500 corporations but remains unwilling to take on cannabis. “We’d have to sort of wait and see if it’s a fit for us,” he says. “If you get into advertising this stuff, you’re basically telling kids it’s OK to start smoking pot young, and I don’t agree. We’re only as good a country as the next generation of young people, and we have a duty to send the right messages to them.”
Then, there’s the fear that big pharma or big tobacco—which already have limitless production capacity and rich marketing budgets—are simply waiting for weed to become legal everywhere, then step in and wipe the smaller brands off the map.
Just ask Todd (who asks that his last name not be used), a California entrepreneur who runs a boutique pot-distribution network called MarijuanaMarket.com. Todd delivers “top quality” flower and edibles to members of his collective, and though business is good, he doesn’t expect it to last. “We’re all really small companies,” he says. “When the big boys—Monsanto, Pfizer—come in, none of us will be needed here. I expect massacres when they really know the real money [involved].”
Pfizer did not respond to Adweek’s queries about the prospects of it getting into the pot game, but a spokesperson for Monsanto said: “Rumors like this have been circulating online. Monsanto has not and is not working on cultivating cannabis. We also have not and are not working on GMO marijuana. That allegation, if you happen to come across it while writing your article, is also an Internet rumor and lie.”
Still, entrepreneurs remain wary about getting clipped by bigger players down the road. “I’d be naive to think that [industries like] big tobacco would never come into the industry,” says Umbel of Bold Harvest. “A lot of them are already way ahead. I’ve heard of large-scale production facilities regulated by one producer. I’ve heard of all kinds of things. I’m pretty sure this is going to happen.”
Ditto for DigitalMarketing.com’s Schiffer, who believes that before long “you’ll find smart operators and maybe even a tier-two pharmaceutical company that decides there’s too much money to be made not to participate.” That company, he says, “will put together a far more professional, quality-focused brand, backed by the marketing talent that has driven an Apple or a Starbucks or even a Pfizer. And all that’s coming.”
For now, the relative handful of pioneering pot brands have the market all to themselves. Beverly Hills Cannabis Club recently signed a development deal with Fremantle Media and filmmaker Morgan Spurlock for a show—working title: High Society—that will follow the adventures of Shuman and her daughter Aimee as they build their brand.
As Shuman sees it, “Someone has to take center stage.”
The Key to Rebranding Cannabis is more soccer mom and less Bob Marley
Despite the recent dramatic changes in the world of marijuana—hello, THC-infused lemonade legally sold in L.A. dispensaries—there is one holdover from the past that won’t go away. Ask most people who is using and profiting off the cannabis industry and they’ll describe a Harold and Kumar-type or Bob Marley-wannabe.Read More
Regardless of what studies, polls, and legislators say, many resist the notion that soccer moms are lighting up in large numbers or that the industry—from dispensaries to hemp home accessories—is in the hands of a growing group of savvy entrepreneurs. Enter Olivia Mannix and Jennifer DeFalco, two twenty-somethings who, in their heels and sheath dresses, seem decidedly more Condé Nast than Cheech and Chong. And with their full-service branding company Cannabrand, they are introducing the world to the modern cannabis entrepreneur.
“Like all industries, cannabis companies need to be branded and marketed effectively,” says Mannix, co-founder of the Denver-based company. She and her business partner knew that they were the ones to launch the company, not because of a shared affinity for marijuana, but because of their ability to spot trends and solve problems. “We had both been avidly following the cannabis industry for years. Once we were aware that recreational use was going to become legal in Colorado, we planned to open a full-service marketing agency catering to the cannabis space,” says Mannix. She and DeFalco studied together at University of Colorado at Boulder and a few years ago opened a boutique marketing agency called MARCA Strategic. Then they decided to go niche and focus Cannabrand exclusively on cannabis culture. Clients have included Mindful, a network of Colorado dispensaries looking to overhaul its look from logo to employee uniforms, as well as soon-to-launched Bold Harvest, an edibles company created by a restaurant industry veteran.
“Our clients range from small startups to international public companies,” Mannix says. For these businesses, they do everything from logo creation to websites to social media management. “Jennifer is the creative director and was able to create all of the artwork for our company, including website design, logos, marketing materials, as well as direct creative strategy. I am the strategic director with a strong PR and marketing background who leads strategic aspects,” she explains, calling them a “dynamic duo” who financially bootstrapped the venture as soon as they saw that the legal tide was turning in favor of the cannabis entrepreneur.
As innovative as it may be to venture into newly legalized terrain, it is also risky. Laws can always change and public sentiment can turn against legalization. To Teflon-proof their business, Cannabrand is thinking outside of the box, offering brand extensions to show off their business creativity and simultaneously raise public support of cannabis legalization. They have the blog CannaBuzz, with its tagline “Covering cannabis culture and the recreational movement” with posts like the one titled “What it’s like to be a mother in the cannabis industry,” written by a woman on their creative team. It also means that they are looking beyond Colorado. “We envision opening branches across the nation, and we will continue to influence policy and the federal legalization of cannabis,” says Mannix. In other words, they are way more Fortune 500 forward-thinking than High Times laissez-faire.
Ganjapreneurs Flock to Colorado Following Marijuana Legalization
From “Cannabranders” to The Medicine Man, everyone’s rushing to cash in on the green in colorful Colorado.
“The future is so bright, I gotta wear shades,” croons Peter Williams, the 46-year-old chief of operations at a Denver dispensary that hopes to be known as the IKEA of Weed.Spoken amidst blinding high-voltage light at The Medicine Man’s 20,000 square-foot grow facility, Williams’ reference is appropriate.Read More
Thousands of baby cannabis green plants are blooming—but the vision of what they’ll reap has already blossomed. Despite being one of the largest dispensaries in Colorado, Medicine Man will soon double in size. Call Williams—and his co-owner brother Andy— “ganjapreneurs.” But they’re not the only ones.
Just 27 days after Colorado opened the doors to recreational marijuana stores, gutsy weed pioneers are flooding the centennial state. From tour guides to chefs, glass blowers to club owners, they each tout different talents to hit the jackpot.
Long a destination for young men answering Greeley’s call to “go West,” Colorado’s status as the first state to legalize recreational marijuana sales has taken its desirability to a new, ahem, high. Mike Maciag, data editor for the state and local government-focused magazine Governing, says an estimated 36,284 people moved to Colorado in 2013, almost 8,000 more than the year before. The number places Colorado in third place as the state with the most domestic in-migration (following North Dakota and Washington, D.C.). With 300 days of sunshine, 54 peaks above 14,000 feet, and a marijuana market poised to bring billions, Colorado is America’s treasure chest—the gold rush gone green.
“Once legalization happened, I knew Colorado was the place to be,” says Max Patton, a 26-year-old Denver newcomer. Weeks after moving from Oklahoma in November 2013, the skiing aficionado launched maxqualityglass.com—a company specializing in high quality, and high priced, glass pipes (still advertised strictly for tobacco). With a love for marijuana, a background in business, and a first-hand knowledge of the glass market, Patton knew he’d be an asset to dispensaries. He was right. Just two months in, the former land management worker says he’s raking in $12,000 a month and then some. “It’s a great job,” he says. “I get to put a smile on people’s faces.”
Nipping at his heels for a whiff of something smokin’ are Jennifer Defalco and Olivia Mannix, two 24-year-old east coasters who met at UC Boulder and have since created the ”first recreational marijuana branding agency”, Cannabrand. Jumping on the phone while racing from one meeting to the next, the best buds are nothing if not enthusiastic. “The world perceives cannabis consumers as deadhead, unemployed people—our mission is to change that,” says Defalco. Representing all things cannabis from clothing stores to parties, they’re now major players in the weed world. “Nothing is certain, but everyone in the industry is so friendly,” says Mannix. “It’s a risk we’re willing to take.”
Stories like these are what Dr. Phyllis Resnick, lead economist for the Colorado Futures Center and co-author of CSU’s Amendment 64 Fiscal Analysis finds exciting. “It’s a really interesting phenomena that’s happening,” Resnick tells The Daily Beast. While the first three months will likely be inflated by pot tourists gunning to “see it first,” the months following will be a better indicator of the overall economic impact.
So what would the expert get involved in if she wasn’t too busy projecting the future of Colorado’s economy? Edibles. “I think the food side of things is really fascinating to watch,” she says. “The most sustainable impact—assuming there are no hitches legally—will be ancillary things like that.”
Tripp Keber and Chuck Smith know just what she’s talking about, and are already mixing things up in the kitchen with their company Dixie Elixirs. What started four years ago with a single “orange pot soda,” has become an edibles empire in Denver. Now catering to all dispensaries in Colorado, Dixie offers 100 different variations of marijuana-infused products, from tootsie rolls to lotion. “Demand for the product has far exceeded our best expectations,” says Joe Hodas, Dixie’s newly-hired chief marketing officer. “The crew here is working around the clock.”
Less than a month in, it’s impossible to tell whose gambles will actually pay off, especially since many aspects of Amendment 64 are still subject to interpretation— most notably, explicitly banned public consumption. As of the second week of January, the Denver police had cited one person for public pot use every day since recreational dispensaries opened for business. The ban isn’t limited to lighting up at the park; it forbids using cannabis at any location—indoor or outdoor—that’s open to the public. This puts a wrench in the state’s hope to regulate weed the same way it does alcohol. But, for the time being at least, it leaves a void for smoking spaces that certain enterprising marijuana enthusiasts are eager to fill.
Tom Valdez is one of them. The 55-year-old computer technician is panning for green by staking his claim in what he views as the soon-to-be-booming, private smoking club business. In lieu of legally smoke-friendly bars or coffee shops, Valdez and others are creating smoking clubs. By charging membership fees, holding events at private venues, and requiring guests to bring their own cannabis products, these clubs technically—or as far as Valdez and his contemporaries understand it—circumvent the public consumption ban to allow like-minded marijuana lovers to smoke and socialize in a common space.
Save for a few tobacco-shop housed clubs like the iBake lounge, the pot spots that have popped up so far are more like ganja gatherings ranging from live DJ parties to mellow salons. As the law also prohibits purchasing and consuming cannabis in the same place, the clubs are all BYOC, but include some variation of snacks, glassware and other paraphernalia for purchase, along with complimentary bars for vaporizing and or dabbing—the increasingly popular and highly potent method of smoking concentrated butane hash oil. Others, like Cronic Magazine founder Joel Camarena’s Friday night Cronic Cabaret, provide a burlesque show and other entertainment for smokers with their $50 one-night membership.
Valdez’s bluetooth blinks under his shaggy, chin length grey hair as he shows off the wood paneled yoga and T’ai Chi studio he plans to use as a homebase for his club. He springs to attention, planting his white socked and sandaled feet firmly into the hardwood floor, and spreads his bejeweled hands wide, instinctively posing without a beat when asked to take a picture. Membership for a single event, which he initially says are open to every demographic but later clarifies are catered to an older, more mature crowd, is $10. VIP members will get a card, a T-shirt and the ability to organize their own events for just $40 more.
Where Valdez aspires to parlay his decades of stoner experience (he brags that he’s been smoking weed since the ‘70s) and self-proclaimed business savvy into a potentially profitable part of the marijuana industry, Jane West is using her professional event planning skills to carve out her own piece of the pot pie.
After 15 years as an independently contracted event planner, Colorado’s recreational marijuana law inspired West to start her own business combining two of her passions: good weed and good food.
Under the tagline “munchies for foodies,” West’s Edible Events caters to the sophisticated stoner. Her first event last Friday, an end-of-prohibition-themed party at a Denver art gallery, was a major success thanks to a Denver Postpreview. An unnamed Heisman trophy winner, two sixty-year-old women from Kansas and a few groups of six or seven 25-year-olds were among the 140 people who paid the $125 ticket price. Once inside, guests ate gourmet hors d’oeurvres, examined stimulating art, sipped on wine or local craft brews, and socialized with fellow marijuana users, all of whom were enjoying the effects of their own vaporizer pens, hash oils, or marijuana-infused food and drinks from their favorite recreational dispensary. But since Colorado’s Clean Indoor Air Act was amended this year to ban marijuana in addition to cigarette and cigar smoke from most bars and restaurants in the state, West had her guests do any pure puffing in a limo outside.
Ever the seasoned party planner, West considers each minor detail for her events—of which she’s already scheduled one per month for the next year—from what kinds of succulent munchies her dry-mouthed patrons would enjoy to how they’ll get home. She requires that her guests don’t drive to or from her events, partnering with Uber to offer a 20 percent off coupon with every ticket purchase. She’s also equipped herself with a lawyer and liability insurance.