Tag Archives: marketing

FDA, FTC Issue Warnings to Delta 8 Copycat Cannabis Companies

By Cannabis Industry Journal Staff
No Comments

Last week, the U.S. Food and Drug Administration (FDA) and the Federal Trade Commission (FTC) sent out warning letters to six different companies for selling copycat food products that contain Delta-8 THC. In a press release published on July 5, the FDA and FTC said they sent out letters to the following companies:

  • Delta Munchies
  • Smoke LLC (also known as Dr. S LLC)
  • Exclusive Hemp Farms/Oshipt
  • Nikte’s Wholesale LLC
  • North Carolina Hemp Exchange LLC
  • The Haunted Vapor Room
The Haunted Vapor Room, Dope Rope Bites

The products in question look exactly like common name brand foods like chips, candy and other snack foods. The FDA says they are concerned they might be mistaken for traditional foods, accidentally ingested by children or taken in higher doses than intended. “The products we are warning against intentionally mimic well-known snack food brands by using similar brand names, logos, or pictures on packaging, that consumers, especially children, may confuse with traditional snack foods,” says Janet Woodcock, M.D., principal deputy commissioner at the FDA. “The FDA remains committed to taking action against any company illegally selling regulated products that could pose a risk to public health.”

The FDA has sent out dozens of other warning letters to cannabis companies over the years for illegal marketing, mostly involving misbranding/mislabeling issues. A more common reason for a warning letter is making unsubstantiated health claims. In 2022, the FDA sent out 33 warning letters to CBD companies, including some that were marketing CBD as a cure for Covid-19. In 2021, they sent out a number of warning letters to companies marketing OTC drugs with CBD in them.

FDAlogoBack in May of last year, the FDA sent out their first warning letters to companies selling Delta-8 THC products, then issued a consumer update and warning about the compound a month later. The FDA and some industry stakeholders are concerned not only about the psychoactive substance itself, but also the way it is produced that could use potentially harmful chemicals.

This is the first time since 2019 that the FTC has gotten involved, when they issued similar joint letters to companies making unsubstantiated health claims. “Marketing edible THC products that can be easily mistaken by children for regular foods is reckless and illegal,” says Samuel Levine, director of the Bureau of Consumer Protection at the FTC. “Companies must ensure that their products are marketed safely and responsibly, especially when it comes to protecting the well-being of children.”

Beyond Compliance: Leveraging Packaging to Build Brand Identity & Loyalty

By Jack Grover
1 Comment

Ten years ago, “cannabis packaging” didn’t extend very far beyond throwing buds into a plastic baggie – in fact, the term wasn’t even really a recognizable category. The lack of product packaging attention-to-detail was understandable at the time; the industry was still predominantly underground, and brands were much more focused on staying afloat amidst global prohibition and crackdowns.

Fast forward to today’s cannabis landscape, and it’s practically unrecognizable. Brands have figured out that, not only is proper cannabis packaging essential for providing consumers with a safe, reliable product, but it offers businesses an inimitable opportunity for marketing to their audience and establishing brand identity.

Because of this, the legal industry has gotten increasingly creative and playful with their packaging, using the space to connect with their audience, leave a lasting mark and obtain that covetable consumer loyalty the retail world is always hungry for.

The beginnings of cannabis packaging: Preserving integrity in a growing market

I entered the cannabis world as a home grower – exclusively for my brother, who has pretty intense cerebral palsy and gets tremendous medicinal relief from the plant. I’ve been growing for him for years, and in my earlier days I found myself losing a lot of cannabis to the elements as time passed: mold, pests, etc. I figured there had to be a better way to preserve what I was cultivating for long-term storage.

After visiting a dispensary in Colorado to get some ideas, I realized all of their packaging was overkill. It didn’t do anything to actually nurture the plant, or give it what it needs for successful lasting preservation. So, I got even more interested.

I started looking into what chemically happens to cannabis after you dry it and I discovered there was no real information on the topic yet. So, my team and I started looking into how we could contribute to this arena – sort of creating this whole new category and awareness around curating, storage, long-term plant viability, shelf life and conditions for quality cannabis.

We looked at a variety of elements for proper packaging – like UV protection, humidity and moisture control, odor control and oxygen control – and worked hard to develop some materials that would factor in all of these considerations for an end-goal that I believe should be universal.

When it comes to cannabis packaging, the most important thing you should be thinking about is integrity throughout the supply chain: delivering products to patients in the way that it was intended to be delivered from the grower for optimal medical results.

Proper packaging is critical for the industry. It contributes to operational efficiency, eliminates waste, maintains full moisture and humidity rates and helps businesses protect their bottom line.

It allows operators to deliver better, more viable and more potent medicine to patients – and that is absolutely what’s most important. Giving patients the full efficacy of the plant, unadulterated and unmolested by the supply chain.

Utilizing cannabis packaging as a powerful marketing tool

That’s how cannabis packaging was first developed – to protect products and keep them safe and effective for consumers. Since then, the sector has totally evolved to encompass even more elements. There’s a lot more education about drying and curing, and how to preserve the integrity of cannabis as it moves from seed to sale.

Brands have also started recognizing a dual opportunity alongside safe cannabis packaging: an effective means for marketing and advertising. In a space where we’re so restricted on how we market our brands, having great packaging is beautiful, convenient and reminds the patient of the brand behind the product they’re currently enjoying.

This is a critical opportunity for brands to cement their reputation and form a relationship between themselves and their clients. “Consumer loyalty” is a magic term that a lot of brands are chasing today, and the biggest way to achieve that is with consistent, high-quality packaging that allows operators to maintain integrity within a supply chain they just can’t control.

Cannabis packaging is the consumer’s first reaction to your product. It’s the plating. And the way it’s presented has a major effect on how customers view your brand. Think of your packaging as a type of billboard: every consumer carrying around a branded bag of your pre-rolls is a walking advertisement and ultimately an ambassador.

The 12-inch vinyl LP cover art of our generation is the one-eighth flower pack. Just like those records are all music, these packages are all cannabis, but these brilliant creatives all over the world are getting to attack an identical canvas with radically-different approaches and aesthetics.

It’s a ubiquitous thing – like designing a watch. From Timex to Rolex, all of these brands have been creating iterations from the same basic layout to do the same basic thing: tell time. That is constraining, but it also pushes people to get really innovative and imaginative.

In the cannabis realm this is just the beginning of utilizing packaging for brand identity and loyalty. Innovating your cannabis packaging provides an incredible framework for seeing different ideas and inspirations come to life. It’s a cannabis collaboration with artists in its most newborn infancy and there’s a lot of exciting potential there. Beyond a billboard and a brand voice, packaging is a keeper of the quality, consistency and potency your customer deserves.

Anticipating the Ebbs and Flows of Seasonal Retail Cannabis Sales

By Itali Heide
No Comments

Like any industry, cannabis can experience ups and downs, especially when it comes to a doors-open retail business. Dispensaries that operate in towns or cities that attract tourists experience this more than anyone, seeing sales spike during the busy months and reach lows during the off-season.

We spoke with the folks at Dragon Hemp, a hemp retailer based in Sag Harbor in the Hamptons. As a brand that has first-hand experience with seasonal spikes, they were able to provide more context when it comes to anticipating the ebbs and flows of seasonal retail cannabis sales.

What is the Best Way to Prepare for Post-Busy Season Retail Lulls?

In Sag Harbor, Dragon Hemp awaits a spike during the busy summer months, as well as lulls when the tourist season is down and visitors head back to New York City and beyond, many becoming loyal online customers year-round.

According to Kevin Menard, LAc, founder of Dragon Hemp, the best way to prepare for post-busy season retail lulls is to build a community of loyal customers that take your brand home with them.

“Post-busy season lulls can be very useful in setting strategies and goals for the coming year. In our case, we do a thorough inventory review and align what we have with what we need for the upcoming peak season,” says Menard. “As the season winds down, they prepare for online orders that come from the impression left on customers in the store. “We also focus on cultivating our owned channels where we can have more direct communication with our community.”

Advice on Preparing for Busy Retail Seasons

Kevin Menard, LAc, founder of Dragon Hemp

Before the busy season is even over, it’s important to start preparing for the lull in business that’s bound to set in. For Kevin Menard and his business, preparation starts with inventory. So, what’s their secret? “Make sure you have budgeted for an inventory of your most popular items and hire excellent storytellers in both your retail locations and e-commerce marketing teams.”

Keeping an eye out on inventory management can be a great way to spend the slow months. Give brands a chance to monitor sales trends and keep up with changes in consumer preferences, putting more time and effort into online retail and social media and implementing promotions and sales online and in-person. Grow the team behind the brand, keep up with all new regulations and focus on customer loyalty to maintain trustworthiness even from afar.

Turning a Seasonal Customer Into a Lifetime E-Commerce Customer

In order to turn a seasonal customer into a life-long client, it’s important to connect beyond just the sale and product. For Dragon Hemp, the most important part is personalizing the experience for their customers: “For us, it’s all about achieving personalization with each customer,” says Menard. “Typically, a seasonal retail buyer will be opportunistic about their purchase in-store, but that purchase is indicative of a longer-term need. We try to create customer profiles based on in-store buyers and craft recommendations that fit that customer’s health needs over the long term.”

In order to turn a one-time buyer from out of state or city into a lifelong loyal customer, there are a few things to consider that can make this connection happen. First and foremost, building a relationship by maintaining impeccable customer service and personalizing the experience.

Focusing on online retail is also important in order to maintain the connection with clients. Making sure the website is in perfect shape and offer loyalty programs, incentives, promotions, sales, discounts or rewards to returning customers.

Marketing and publicity are other essentials, as you want to target those who have a long-time need that needs to be filled. Allowing for a fuss-free online shopping experience, targeting people who fall in line with the brand’s products and values, being creative and innovative when promoting the website and keeping in touch with active social media and newsletters.

How to Project Goals In Places That Swell Seasonally

It can be difficult to project year-on-year retail goals when the geographic location has a tendency to swell seasonally and have off-seasons but preparing and knowing what to expect can help with reaching those goals (and even surpassing them).

According to Menard, the secret to projecting their goals starts with their first location: “Since our first retail location in Sag Harbor, NY has been open only a year, our projections are still a work in progress! We’re using 2022 data to budget for this year, accounting for marketing efforts, increased awareness, and seasonality. We have some sensitivities built into this model based on different growth scenarios.”

The instabilities and fluctuations that come with a business that works on a seasonal tempo can be challenging when it comes to reaching and achieving specific goals, but there are things that can be done to make the whole process more seamless, and hopefully, more successful.

Looking back at previous years can be helpful in pinpointing tendencies and habits that can be observed in the consumer, and the lower sales allow space for the time that can be used in innovating and creating new products that are based on what the client base wants.

Researching not only the immediate region, but the regions that people often visit is another handy trick. Knowing who is coming, why they’re coming, and what they’re looking for can help set objectives that can be brought to reality throughout the off-season and the busy season, even experiencing more foot traffic in town. Moreover, making the most of the local events, occasions, changes and circumstances like holidays and local events can keep the brand connected to its roots and primary clients.

The off-season is a great time to set up a budget or specific monetary goals to reach, and off-season fluctuations can be added in to give a more complete idea of what the year might look like. Keeping an eye on the market by monitoring it and using forecasting models to predict results can also help set the stage for changes in the year-to-year goals.

Expanding From a Cannabis Retailer to a National E-Commerce Brand

Dragon Hemp didn’t start off with a bang, but they sure have achieved it over time. Dragon Hemp products were conceived by renowned alternative health practitioner and founder, Kevin Menard. Using hemp oil, Chinese herbs and native botanicals, they have managed to create a variety of beneficial and natural products.

“Our apothecary in Sag Harbor has been a great success, but the most rewarding aspect of the location has been the ability to have direct conversations with customers and get a deep understanding of how we can support their journey to better health,” says Menard. “We’re excited to expand our mission of helping people feel like themselves again by using next-generation natural botanicals and time-honored herbal remedies.”

Final Thoughts

As the country continues toward legal and accessible cannabis, new businesses are learning the ropes and those that have been there all along have been leading the way.

Having ups and downs in any business is to be expected, but just like any industry, knowing what to expect and what to do can make these challenges seem like less of a hassle. Building an online presence that clients connect to, developing e-commerce strategies, expanding product lines, building a loyal customer base and staying up-to-date with the latest regulations are surefire ways to stay on top of the cannabis business.

Catching up with Jushi Creativity: A Q&A with Dre Neumann

By Cannabis Industry Journal Staff
No Comments

Jushi Holdings is a large multi-state operator with a massive national footprint and a presence in key markets, including Pennsylvania, Illinois, Virginia, Massachusetts, Nevada, Ohio and California. 

About a year and a half ago, Aaron Green interviewed Andreas “Dre” Neumann, Chief Creative Director of Jushi Holdings to learn about his journey to the cannabis industry, Jushi’s market presence, brand development and key trends in the marketplace. 

This time around, we’re checking in with Neumann to hear about his progress since the last time we spoke. In this interview, we delve deep into the world of creative influence, brand building, technology, what Neumann is working on now and what he is excited about in the future. 

Cannabis Industry Journal: It’s been a while since our readers have heard from you. What’s new at Jushi? What Are you currently working on? 

Dre Neumann: When I joined Jushi, we were building the foundation and laying the groundwork for a lot of the things we’re doing right now. One of them of course is our online pre-order platform. We have been focused on connecting all the dots in our vertically integrated markets to make sure our retail experience is really fine-tuned and represents what a diverse range of cannabis consumers find helpful and truly enjoy. In my time at Jushi, I have gained a much better understanding of the average cannabis consumer through constantly analyzing data from our retail spaces, and I very much look forward to analyzing more robust data that’s coming in through our new smartphone app. 

Andreas Neumann, Chief Creative Director of Jushi Holdings

The data we have now is allowing us to look at what product developments are most important for us to move forward with and what product categories we should be focusing most on. Because we may be on the cusp of a recession, the consumer value of our product is that much more crucial. With the introduction of new categories of fast-acting edibles and unique and exciting genetics and types of flower, we are paying close attention to how we can innovate in ways that will both excite our current customers and attract new customers to our brands. 

Jushi is interesting because the company really came together from two key pieces: the first being our strong financial and management backbone, and the second, the powerful creative team that I am a part of. We have such a special focus on the quality of products, with the goal of creating high-quality and consistency across our house of brands.

We have had a lot of acquisitions, which have played out very successfully over time, but early on, through these acquisitions, we found there were products and procedures that weren’t up to our standards. It takes time to fix those things from a quality, genetics and consistency perspective, and I’m thrilled to say we’re really getting there. Notably, we felt the need to improve our edible fruit chew brand, and we poured a ton of time into reinventing and relaunching simple, but high-quality, organic, 100% real-fruit chews. 

Now, we are really seeing the value in our three retail brands and the unique attributes of our branded flower, pre rolls, vapes and edibles. Also, we have been really focusing on improving sustainability as we move towards using much more sustainable, standardized mylar packaging across our product suite. This packaging not only reduces our carbon footprint, as mylar is a much more sustainable, recyclable and lightweight material, but also offers us more real estate to express Jushi’s personality through artwork on packaging and allows us to display our products with a larger presence in stores. 

CIJ: You mentioned Jushi’s new app and you sound so excited about it. Tell us more: how are you using the data to analyze what your customers want? 

The Jushi app, The Hello Club (THC)

Neumann: When we were building our online platform, we knew we needed to better understand our customers. What we found was that the most important marketing tools in cannabis are promos – specifically promos through text messaging. Our loyalty program has become our biggest channel to reach consumers, as we have over 200,000 people we can reach with a simple text message. The big problem with texting campaigns, however, is that mobile phone carriers can limit your deliverability if you don’t have the right verbiage and messaging. So working with and figuring out how to deliver the right message to our customers can be very challenging. 

Our smartphone app, The Hello Club (THC), came about as a natural progression of our customer loyalty program. Our team has a lot of experience working in UX and UI, so we were able to dive right in and build the app through Apple. We really took our time to build something that would add value to our customer, and it’s paid off. For instance, starting out we launched an exclusive weekly deal only available in the app. So, guess what happens? Just yesterday, on the 15th of November alone, 11,000 people downloaded the app. 

Their retail location in Alexandria, Virginia

The app will be something that we play around and experiment with as more and more customers download it. It provides us with a platform to be creative and have fun with our customers, where we can launch exclusive events and strain drops and grant exclusive access to our products before they’re available to the general public. 

The Hello Club was completely designed from scratch. It allows customers to choose their local, preferred store, with the ultimate goal of it becoming the central hub of their cannabis needs. The data we get from the app is so vast and there are so many opportunities on the horizon – we have only just scratched the surface. In the future, as we look to enter new markets, we’re excited to utilize the customer data from our app to guide us in deciding what to sell and where and create unique retail experiences tailored to each market. As we’re just in version 1.0, there’s tons of untapped potential ready to be unearthed and applied. 

CIJ: Around this time last year you said that PA was the most important market for y’all. Tell me about the states that Jushi does business in. Are you paying particular attention to any market more now given the midterm elections?

Neumann: Yes, so Pennsylvania is still our most important market today, mainly because we have so many retail locations in the state (18). Pennsylvania is interesting because it’s also the site of Jushi’s first acquisition ever. I think the inevitable move from medical to recreational in the state will be extremely significant; it will be one of the greatest transitions in cannabis history. Because of our footprint and brand presence in Pennsylvania, we are in an excellent position for when adult use comes online.

The Palm Springs retail location

We call Virginia the sleeping giant because it’s a market we have really cornered. We will have six stores in northern Virginia, close to Washington D.C., in areas with large populations, very diverse demographics and a lot of young people. Our retail locations in the state are freestanding buildings with ample parking – key attributes that benefit customers and lift sales, as we found from the data we collected in Pennsylvania. Virginia has incredible potential because we have made such a formidable early presence with our vertically integrated, IKEA-sized grow operation there. We have applied our findings from other states to Virginia, and we’re thrilled about the opportunity for us to showcase high-quality products in this market. 

California is such a tough market to be in, as it’s the most competitive cannabis market in the world, with some of the most discerning customers, so operators often fear entering the market. But it’s proven to be great for R&D for us, and we continue to learn how to navigate and work in this competitive market through our Palm Springs, Grover Beach and Santa Barbara retail locations. By necessity, we’ve been particularly creative with our marketing and operational strategies to carve a place in the market; we have to show people we have better products and a better experience, which is very difficult with stringent regulations in places like Palm Springs. So California, for us, continues to be a proving ground where we are learning how to be as competitive as possible, and this benefits Jushi as a whole.

budtenderpic

The Coming Cannabis Data Squeeze – And Why So Many Companies are Flying Blind

By Michael Blanche
No Comments
budtenderpic

“Data” is a hard concept to picture. It’s even harder to visualize what your data is saying about your business. Many important insights are processed on different systems, never to see the light of day.

In the digital advertising industry, we call this “data silos.” In the cannabis industry, we call this the cost of doing business.

Without traditional tech tools or a source of truth on market sentiment and trends, there’s no common picture that can show us the day-to-day behavior of today’s cannabis consumer. Companies are often guessing what consumers want based only on the data they have available.

To keep growing, dispensaries and brands have to modernize how they understand, activate and measure customer data. Luckily, it may be easier than you think to start making better use of your customer data right away, which means it’s easy to simplify how you connect to both existing and new consumers, driving more engagement and revenue.

Cannabis companies that started digital-first have a head start on legacy businesses: phone numbers, emails, customer preferences are all first-party data that can help you find and advertise to new customers.

Here’s how:

1. Build Your Customer Database with a Rewards Program.

A 2022 YouGov survey found that when cannabis consumers are asked about how they make purchasing decisions:

  • 36% said quality and safety
  • 34% said lowest price
  • 32% said location (proximity to home)
  • 31% said preferred products

Most cannabis businesses know the power of rewards programs, but usually depend on steep discounts to get customers back in the door. Rewards programs can also offer promotions for new product releases, exclusive access, community events and other things that offer information about things you know your customers already care about.

The most valuable thing about a rewards program isn’t just the sales – it’s the data. If a customer makes a profile with an email and a phone number, you have the basic building blocks for a first-party data strategy. Just make sure you have a way to keep that data organized on the back-end.

Want the real secret? Segment your email and SMS list by what you know your customers want. Send different communications for different customer groups and behaviors – like edible users and pre-roll buyers or monthly buyers and weekly buyers. Figure out what resonates and repeat!

2. Budtenders that Care. 

A relationship with a budtender is sometimes transactional. Other times, it’s confessional, fun, or, if a consumer is new to buying cannabis or trying different products, educational.

As one survey found: 22% of customers always decide what to buy based on budtender advice and 69% said they seriously consider their opinions.

Good budtenders get to know the customers and can become advocates for staying in touch. Training them to sign up customers for a rewards program or exclusive offers can help build the relationship that keeps people coming back and allows you to stay in touch. This is how you can link your data efforts with your frontline employees.

3. Find a Secure Way to Manage Your Customer Data. 

To segment customer data and build customer profiles with additional information – like purchase history or demographics – you need to find a solution built for a growing customer database. Some options, like an email marketing platform, can get you halfway there. But a lot of companies still rely on Google Sheets, which can take hours to understand and end up exposing a lot of customer data out in the open.

The right customer data platform should help you connect and integrate all your different data sources, from website and ecommerce platform to point-of-sale. This allows you to understand macro and micro market trends by making your customer segments transparent and easy to manage as they move down the path to purchase. You can also identify which segments drive the most value over time and what attributes and behaviors they have in common.

By managing customer data from one platform, you can dramatically increase the transparency across all the valuable insights that affect your business. And then make use of those in your next big advertising campaign.

Combining Co-Marketing with Community

You can avoid the cannabis data squeeze by modernizing how you handle customer data. Dispensaries with advanced data management practices are often processing thousands of transactions a day and constantly enriching their understanding of customers and their target markets. Unlike dispensaries, brands don’t have the same volume of new data. This has a lot of implications when you’re trying to reach new customers, because when a brand launches a digital advertising campaign, a lot of budget can get wasted if the audiences are based on a limited dataset.

That’s where co-marketing digital advertising campaigns can help. Cannabis companies collaborate to activate events and retail displays. To really build awareness and drive sales, cannabis brands should reach a dispensary’s existing customers and advertise in coordination with the dispensary. With the right dataset, you can show ads just to a dispensary’s best customers, and the ones most likely to buy your product.

The most exciting part about the future of the cannabis industry all comes down to data. The community grew together, and now businesses can innovate together – building a better customer experience by understanding every stage in the journey. In a relationship-first industry, cannabis digital advertising has to be as personalized as a budtender’s recommendations.

Soapbox

Give a Voice to Scientists in the Executive Suite

By Dr. Markus Roggen, Amanda Assen
2 Comments

What do Aurora Cannabis, Tilray and Pfizer all have in common? They all produce and sell products used for medicinal purposes, they are top competitors in their field and they all have statements on their websites claiming that science is one of the most important things to their business. But unlike Pfizer, Aurora and Tilray do not have any positions in the executive suite for scientists or medical personnel. This led us to wonder, why does the structure of their corporate ladder (as well as so many other cannabis companies) not align with what they claim to be their values?

According to Aurora Cannabis, “Science is at the core of what we do”.1 Look up the definition of “core” and you will get “foundational, essential, central, and enduring.”2 Sounds important. Meanwhile, Tilray’s main page states: “For the therapeutic value and risks of cannabinoid-based medicines to be fully understood, Tilray believes it is critical to evolve current scientific understanding of the field.”3

aurora logoYou would assume that somebody in the executive suite would have a position and an educational background relating to the central and enduring part of a business, right? We looked at 10 of the biggest Canadian cannabis companies, their founders’ educational backgrounds and whether there were executive positions for science, R&D or medicine (Table 1). We also looked at the same data for the top 10 biggest pharmaceutical companies (Table 2). As expected, every pharmaceutical company had upper-level (C and/or P level) positions for scientists and/or medical personnel. However, only 2 of the 10 cannabis companies had this.

tilray-logoTo figure out why this is, (as scientists) we did some research. It turns out, the consensus is scientists are bad at commercialization. Scientists are rarely successful as CEOs because they are (usually) not good at attracting customers and get confused by things like revenue models.4 As Akshat Rathi bluntly put it, “just because you are the smartest person in the building does not make you capable to run a company.” In fact, many CEOs of life science companies got to the top by pursuing business, finance, marketing or sales. In the 90s, some life science companies took a chance on scientists and hired them as CEOs, but when they hit financial turmoil, they quickly undid this.5

So maybe scientists aren’t always cut out to be the CEO of a company. But that still doesn’t explain why so few large cannabis companies have a chief scientific/medical officer, or even a president of R&D.

Maybe we are looking in the wrong place. Maybe their value of science can be demonstrated by their spending on research. Typically, a larger agricultural company will spend 9% or more on R&D, and a smaller company will spend 2-4%.6 Meanwhile, the major pharmaceutical companies we looked at spent between 12 and 25% of their revenue on R&D during their most recent fiscal year. Since a cannabis company falls somewhere in between we approximate they would spend around 9-12%.

Canopy_Growth_Corporation_logoHowever, Canopy Growth was the only company that fell into our prediction range, spending 10.5% of their revenue on R&D in 2021.7 Tied for a distant second place were Charlotte’s Web and Aurora Cannabis (a subsidiary of Tilray), spending 4.6%. At the very bottom were Tilray which only spent 0.16% on R&D and TerrAscend which spent 0.21% during their most recent fiscal year.8,9 With most of the cannabis companies, we saw a gradual decrease in R&D funding over time, which intensified with the Covid-19 pandemic.

So why the heck are these companies going on about how they value science? To give them the benefit of the doubt, maybe they do think they value science, but they don’t know how to value it.

 It’s hard for a company to take actions that show they value science if there are no voices for scientists at the executive level. After all, how can you make decisions based on science if nobody in the room understands it? Sure, we saw the argument that people who make it to the top can “learn enough science to ascend to the executive suite without much trouble”.5 But what is “enough science”? The mitochondria is the powerhouse of the cell?

This leads to our argument for putting scientists in the executive suites of cannabis companies and giving them a more powerful voice. Whereas scientists are not good at marketing, those in managerial roles tend to overly rely on intuition – even when the evidence is against them.10 For those relying on intuition, R&D is an easy target during times of crisis (like a global pandemic). Cutting costs in R&D yields a short-term immediate increase in profit and the negative impacts are often not felt until years later.11 However, cutting R&D investment is the opposite of what you should do during a time of crisis. Evidence suggests companies that maintain or even increase spending in marketing and R&D and focus on operational efficiency (such as process optimization) are the ones that will come out as the top competitors in the long run.12,13 Having a chief scientific officer or an executive for R&D with a scientific background can help sustain companies by promoting R&D during hard times and indicating what projects will be the most promising to help the company optimize their processes.

Having a scientist in the executive suite can also help keep everyone in check. “Senior execs live in a feedback loop of positive reinforcement making them unlikely to question their decisions,” according to Stefan Thomke and Gary Loveman.10 They claim the best way for those in managerial roles to avoid over relying on instinct and break out of that positive feedback loop is by “thinking like a scientist”. This involves not letting bias get in the way of truth, studying anomalies, being skeptical, developing strong hypotheses, producing hard evidence and probing cause and effect. To add to this, we think a major part of thinking like a scientist is by having at least one high up in the team. In our own company, giving equal value to scientific voices has resulted in all parties learning and thriving by making fact-based decisions.

Finally, scientists deliver! To be a scientist (with a PhD), one must master the field, find a gap in the knowledge, then fill that gap – all for little pay and no guarantee of a job at the end. This makes them dedicated workers whose main goal is to contribute something unique to their field, or in this case, their company.14 Having someone up top who is dedicated, passionate, innovative and trained to look for gaps in knowledge can be an invaluable voice in the executive suite. They are likely to point out potential money-saving solutions (i.e.: optimizing extraction conditions) that others up top may not have thought of on their own.

If you feel strongly that science is at the core of what you do, and you already know that R&D is crucial for the long-term survival of your company, you are already on the right track. In addition to this, consider giving a voice to scientists at the executive level in your company. The cannabis industry is still in its infancy. This means there is potential for R&D in more than just new product development. Basic stuff like extraction, modifying plants to be heartier against harsh conditions and pathogens, curing and safety testing processes have all barely been studied and optimized to reduce costs. These things won’t be solved by a Juris Doctor, an MBA or even an engineer, they will be solved by scientists, and it will take a scientist up top to ensure the whole company recognizes the importance of these projects.

Table 1: Top cannabis companies stats on founders and their educational backgrounds, presence of scientific executive positions and spending on research and development

Company Founders Founder’s Educational Backgrounds Science executive position? % Revenue spent on R&D
Aphria Inc.

(now owned by Tilray)

 

Cole Cacciavillani and John Cervini Cole: B. Eng

John: Born into a family greenhouse business

Chief science officer

Garry Leong: B.Sc. Chem,

M.B.A. Quality Management 15

NA
Canopy Growth Corp

 

 Bruce Linton and Chuck Rifici Bruce: Ba Public Policy, Minor: Economics. 16

Chuck: B. Eng, MBA

no 10.5% 17
Aurora Cannabis Inc.

(subsidiary of Tilray)

Terry Booth, Steve Dobler, Dale Lesack and Chris Mayerson Terry: Master Electrician18

Steve: B. Eng

Chris: Concrete business

Dale: Electrician and homebuilder

no 4.6% 19
Village Farms International Inc.

 

Michael A. DeGiglio BSc Aeronautic Science no No data available on R&D expenses
Tilray Inc

 

Brendan Kennedy, Christian Groh, Michael Blue Brendan: Ba. Architecture, Msc: Eng, MBA20

Christian: Ba. unknown, MBA21

Michael: Ba. Finance, MBA22

 

no 0.16% 23
Ayr Wellness Inc

 

Jonathan Sandelman Juris Doctor, Law Degree24

 

no No data on R&D spending available
TerrAscend Corp

 

Michael Nashat Pharm. D . Post doc in Neuroscience25 no 0.21% 26
HexoCorp

 

Sebastien St-Louis Ba. Economics, MBA 27

 

no 3.09% 28
Fire & Flower Holdings Corp

 

Trevor Fencott Ba (unknown), and Law degree29 no No data on R&D spending
Zenabis Global Inc

(now owned by hexo corp)

Rick Brar, Mark Catroppa, Monty Sikka Rick: Ba. (unknown)

Mark: Ba. Finance 30

Monty: Ba Accounting and Finance31

 

Chief science Officer:

Natasha Ryz PhD experimental medicine.32

 

 

NA

Table 2: Top pharmaceutical companies founders and their educational background, presence of executive positions for scientists and spending on R&D

Company Current Executives Educational Background Science executive positions? % Revenue spent on R&D
Amgen Robert A. Bradway BSc. Biology, MBA33

 

Chief Medical officer: Darryl Sleep, M.D. 33

Senior VP in R&D:

Jean-Charles Soria PhD molecular Biol, MD

18.5% 34
Sanofi Paul Hudson Ba. Economics, honorary doctorate in business35

 

Executive VP, R&D:

John Reed, MD, PhD in Immunology35

14.51% 36
Bristol-Myers Squibb Giovanni Caforio MD.37

 

Chief Medical Officer: Samit Hirawat, MD.

Rupert Vessey:

Executive VP: R&D PhD molecular immunology 37

 

24.58% 38
Takeda Christophe Weber PhD. pharmacy and pharmacokinetics, Msc. pharmaceutical marketing, accounting, and finance39

 

 

Director

President, R&D:

Andrew Plump, MD.  Ph.D. in cardiovascular genetics 39

14.25% 40
AbbVie Richard A. Gonzalez No college degree. Practical experience in biochemistry research. Vice chairman and president, R&D:

Michael E. Severino, MD, Bsc biochem41

 

12.60% 42
Novartis Vasant Narasimhan Bsc. Biology, MD, Msc Public policy President, Biomedical research, James Bradner M.D.

President innovative medicine, Victor Bulto: Msc. Chemical engineering, health economics, and pharmaeconomics, MBA. Chief medical officer, John Tsai BEng. MD43

 

18.04% 44
Merck Robert M. Davis Ba Finance, MBA, Juris Doctor45

 

Executive VP and president of Merck Research Laboratories; Dean Li MD, PhD cardiology45 25.14% 46
Johnson & Johnson Joaquin Duato

Vanessa Broadhurst

Peter Fasolo

Joaquin: MBA, Master of international management

Vanessa: Ba, Master of Business Administration

Peter: PhD in organizational behavior, Msc. Industrial Psychology, Ba Psychology47

 

Executive VP, Chief Medical Safety Officer; William Hait MD. PhD Oncology

Executive VP, Pharmaceuticals R&D; Mathai Mammen MD. PhD Chemistry

15.69% 48
Pfizer Dr. Albert Bourla

Sally Susman

Payal Sahni Becher

Rady Johnson

Albert: Doctor of Veterinary Medicine (biotechnology)

Sally: Ba Government

Payal: Ba psychology, Msc Psychology

Rady: Accountant49

 

 

Chief Development Officer:

William Pao: MD. PhD oncology

Chief Scientific Officer, Worldwide R&D:

Mikael Dolsten; MD. PhD Tumor Immunology49

17.01% 50
Roche Dr. Severin Schwan, William N. (Bill) Anderson, Dr. Thomas Schinecker, Dr. Alan Hippe Severin: Ba economics, PhD law

William: Msc in management and chemical engineering

Thomas: Bsc genetics, Msc molecular biology, Phd molecular biology

Alan: Ba, Phd in administration51

 

 

CEO Roche Diagnostics; Dr. Thomas Schinecker; PhD in Molecular Biology51

 

23.563% 52

References:

  1. Aurora Webpage. Auroramj https://www.auroramj.com/#science.
  2. Definition of Core. Merriam-Webster Dictionary https://www.merriam-webster.com/dictionary/core?utm_campaign=sd&utm_medium=serp&utm_source=jsonld.
  3. Tilray Brands WebPage. https://www.tilray.com/.
  4. Rathi, A. Why scientists make bad entrepreneurs—and how to change that. Quartz (2015).
  5. Mintz, C. Science vs. Business: Who Makes A Better CEO? Life Science Leader (2009).
  6. Fuglie, K., King, J. & David Schimmelpfennig. Private Industry Investing Heavily, and Globally, in Research To Improve Agricultural Productivity. US Department of Agriculture, Economic Research Service (2012).
  7. Canopy Growth R&D expenses. https://ycharts.com/companies/WEED.TO/r_and_d_expense.
  8. Tilray R&D expenses. Ycharts https://ycharts.com/companies/TLRY.TO/r_and_d_expense.
  9. TerrAscend R&D expenses. Ycharts.
  10. Thomke, S. & Loveman, G. Act Like a Scientist. Harvard Business Review (2022).
  11. Knott, A. M. The Trillion-Dollar R&D Fix. Harvard Business Review (2012).
  12. Gulati, R., Nohria, N. & Wohllgezogen, F. Roaring Out of Recession. Harvard Business Review (2020).
  13. Soferman, R. Why You Shouldn’t Cut R&D Investments In Times Of Crisis And Recession. Forbes (2020).
  14. Madisch, I. Why I Hire Scientists, and Why You Should, Too. Scientific American (2018).
  15. Havn Life Sciences Inc. Announces Appointment of Gary Leong as Chief Science Officer. https://apnews.com/press-release/accesswire/science-business-life-sciences-inc-aphria-inc-319a516963144b308d146d97dee0dc69 (2020).
  16. Bruce Linton. Elite Biographies https://elitebiographies.com/biography/bruce-linton/.
  17. Canopy Growth Page . Ycharts https://ycharts.com/companies/CGC.
  18. Lee, A. 20 Things You Didn’t Know About Terry Booth. Money Inc (2020).
  19. Aurora Cannabis page. Ycharts https://ycharts.com/companies/ACB.
  20. Brendan Kennedy Profile. linkedin https://www.linkedin.com/in/kennedybrendan/.
  21. Christian Groh Profile. Bloomberg https://www.bloomberg.com/profile/person/17139193.
  22. Micheal Blue Profile. Bloomberg https://www.bloomberg.com/profile/person/18227502.
  23. Tilray Page. Ycharts https://ycharts.com/companies/TLRY.
  24. A Jonathan Sandelman Profile. zoominfo https://www.zoominfo.com/p/Jonathan-Sandelman/2245250.
  25. Dr. Michael Nashat Appointed President & CEO of TerrAscend. https://markets.businessinsider.com/news/stocks/dr-michael-nashat-appointed-president-ceo-of-terrascend-1012862002 (2018).
  26. TerrAscend Page. Ycharts https://ycharts.com/companies/TRSSF.
  27. Sebastien St-Louis Profile. Linkedin https://www.linkedin.com/in/sstlouis/?originalSubdomain=ca.
  28. HEXO Corp Page. Ycharts https://ycharts.com/companies/HEXO.
  29. Trevor Fencott Profile. bezinga.com https://www.benzinga.com/events/cannabis-conference/speakers/trevor-fencott/.
  30. Mark Catroppa Profile. linkedin https://www.linkedin.com/in/markcatroppa/.
  31. Monty Sikka Profile. linkedin https://www.linkedin.com/in/monty-sikka-3024a1a6/.
  32. Natasha Ryz Profile. crunchbase https://www.crunchbase.com/person/natasha-ryz.
  33. Senior Management Amgen Page. Amgen https://www.amgen.com/about/leadership.
  34. Amgen Stocks Page. YCharts https://ycharts.com/companies/AMGN.
  35. Sanofi Executive Team Page. https://www.sanofi.com/en/about-us/governance/executive-committee.
  36. Sanofi Stocks Page. Ycharts https://ycharts.com/companies/SNY.
  37. Bristol Myers Squibb Leadership Team. https://www.bms.com/about-us/leadership/leadership-team.html.
  38. Bristol Myers Squibb Stocks Page. YCharts.
  39. Takeda Executive Leadership Page. Takeda https://www.takeda.com/who-we-are/company-information/executive-leadership/.
  40. Takeda Pharmaceutical Co Stocks Page. YCharts.
  41. Abbvie Our Leaders Page. Abbvie https://www.abbvie.com/our-company/leadership.html.
  42. Abbvie Inc Stocks Page. YCharts https://ycharts.com/companies/ABBV.
  43. novartis executive committee page. novartis https://www.novartis.com/about/executive-committee.
  44. Novartis AG Stocks Page. YCharts https://ycharts.com/companies/NVS.
  45. Merck Executive team Page. Merck https://www.merck.com/company-overview/leadership/executive-team/.
  46. Merck Stocks Page. YCharts https://ycharts.com/companies/MRK.
  47. Johnson and Johnson Our Leadership Team Page. Johnson and Johnson https://www.jnj.com/leadership/our-leadership-team.
  48. Johnson and Johnson Stocks Page. YCharts https://ycharts.com/companies/JNJ/market_cap.
  49. Pfizer Executive Leadership Page. Pfizer https://www.pfizer.com/about/people/executives.
  50. Pfizer Inc Stocks Page. YCharts https://ycharts.com/companies/PFE.
  51. Roche Executive Committee Webpage. Roche https://www.roche.com/about/governance/executive-committee.
  52. Roche Holding AG Stock Page. YCharts https://ycharts.com/companies/RHHBY.
FDAlogo

FDA Issues First Warning Letters for Delta-8 THC

By Cannabis Industry Journal Staff
No Comments
FDAlogo

In an unprecedented move, the U.S. Food & Drug Administration (FDA) has issued warning letters today to companies selling products containing delta-8 THC. In total, the FDA sent out five warning letters to companies for violating the Federal Food, Drug, and Cosmetic Act (FD&C Act).

Image from the FDA’s consumer update on Delta-8 THC

The violations include illegal marketing of unapproved delta-8 THC products as treatment for medical conditions, misbranding and adding delta-8 THC to food products. Back in September of last year, the FDA published a consumer update on their website, seeking to educate the public and offer a public health warning on delta-8 tetrahydrocannabinol, otherwise known as delta-8 THC.

Delta-8 THC is a cannabinoid that can be synthesized from cannabidiol (CBD) derived from hemp. It is an isomer of delta-9 THC, the more commonly known psychoactive cannabinoid found in cannabis. Delta-8 THC does produce psychoactive effects, though not quite as much as its better-known cousin, delta-9 THC. Many regulators and industry stakeholders are increasingly concerned about the rise in popularity of delta-8 products, namely because of the processing involved to produce it. Delta-8 THC is often synthesized using potentially harmful chemicals.

The FDA has a history of sending a lot of warning letters to companies marketing CBD products inaccurately and making drug claims. Earlier this year, they sent a number of letters to companies claiming that CBD can cure or prevent Covid-19.

FDAlogoAccording to Janet Woodcock, M.D., principal deputy commissioner at the FDA, they are getting more and more concerned about the popularity of delta-8 THC products sold online. “These products often include claims that they treat or alleviate the side effects related to a wide variety of diseases or medical disorders, such as cancer, multiple sclerosis, chronic pain, nausea and anxiety,” says Woodcock. “It is extremely troubling that some of the food products are packaged and labeled in ways that may appeal to children. We will continue to safeguard Americans’ health and safety by monitoring the marketplace and taking action when companies illegally sell products that pose a risk to public health.”

The FDA sent warning letters to the following companies selling delta-8 THC products:

  • ATLRx Inc.
  • BioMD Plus LLC
  • Delta 8 Hemp
  • Kingdom Harvest LLC
  • M Six Labs Inc.

The Rise of a New Market… And a New Consumer

By Christiane Campbell
No Comments

The adult beverage industry, like any other category of consumer branded products, is driven by trends. If you’re old enough to remember Bartles & Jaymes wine coolers, you probably also remember Zima and Smirnoff Ice, and more recently “healthy” options like Skinny Girl and Michelob Ultra. The sensation that was craft beer saw many brands being acquired by Big Alcohol so that while the brands remain, ownership and production have changed significantly. Gin, tequila and vodka have had their moments in the sun and the current market is undeniably saturated with what is probably the largest current trend – hard seltzers. However, with the seltzer craze waning, many are wondering what’s next. And with the growing sober/California sober trends, some are betting it is cannabis-infused beverages.

Cannabis-infused beverages offer both an alternative method of consumption of cannabis and are also an attractive alternative to alcohol. Infused beverages are more appealing to the new demographic of casually curious cannabis consumers. i.e., consumers that may not be interested in smoking a joint or vaping, but are comfortable micro-dosing from a can or bottle, as they would a seltzer or beer. The same type of consumer may be moving away from alcohol consumption to eliminate hangovers or other negative health effects.

The emerging market and curious consumer group present an enormous opportunity right now for cannabis-infused beverage brands. Of course, with opportunity and growth come challenges. And while cannabis-infused beverages face a host of legal and regulatory challenges relative to sourcing, manufacturing, packaging, labeling, shipping, marketing, distribution and sale, one of the most critically important business assets to address at inception is the brand.

Lines are Blurring, Gaps are Being Bridged

The U.S. cannabis market is currently a geographic hamburger. Hear me out: Geographically, you have a relatively mature market out west and a relatively new and growing market along the east coast. These are the buns. You have a mixed bag in between, with some states coming online and allowing medical or adult use cannabis use and others that have not yet embraced any form of legalization. The landscape has lent itself to the development of regional brands, such that brands that are so similar they might otherwise confuse consumers, have been able to co-exist in different regions without issue, or because there is little to no trade channel or market overlap. Similarly, adult beverages and cannabis have historically been separate verticals, with an arguably low likelihood that a consumer would assume a particular cannabis product and adult beverage product emanate from the same source.

A drink additive, made by Splash Nano, that uses nano emulsion technology

However, lines are blurring and gaps are being bridged. Walls are breaking down. The increasing number of states coming online with legalized cannabis, and the proliferation of multi-state operators (MSOs), means that cannabis brands can grow to be more than siloed regional brands. This will inevitably lead to brands that previously co-existed bumping into one another and there’s bound to be some pushing and shoving. The advent of infused beverages likewise bridges the gap between cannabis products and alcoholic beverages. While the respective industries were not historically per se related, competing, or overlapping, now you’ve got infused beverages that bridge the gap between the two, and traditional alcohol brands (e.g., Boston Beer Company, Molson Coors, Lagunitas, Pabst.) entering the market (albeit under different brands). This makes a strong argument that cannabis and alcohol (or, more generally, adult beverages) are within each other’s logical zones of expansion, for purposes of a likelihood of confusion analysis.

The growing pains infused beverage brands will experience are analogous to those craft beers saw in the 2000 – 2010s. Many craft brewers had catchy, cheeky names and brands that contributed to their ability to engage consumers and develop a following, but failure to clear and protect the brands prior to launch detracted from the brands’ market values. Localized use prior to expansion also led to many brands bumping into one another and stepping on each other’s trademark toes. This was significant as the brands sought investment dollars or an exit strategy, making clear that the brand itself contributed heavily to valuation.

Mitigating Risks and Overcoming Challenges: Search and Protect 

The risks and challenges can be significantly mitigated and/or overcome with proper preliminary clearance searching and assessments, and by seeking and obtaining state or federal protection for the brand or brands, to the extent possible.

Quatreau CBD infused sparkling water

Of course, clearance searches and assessments come with their own challenges, as does federal protection. With respect to clearance searches, these typically look at U.S. federal and state trademark databases. These resources are not sufficient for purposes of clearing a proposed cannabis brand. Many brands are not recorded at the federal or state level and indeed may not even show up in a basic search engine. An appropriate search looks at social media resources like Instagram, Twitter, Facebook and known cannabis resources like Leafly and Weedmaps. Additionally, the scope of the search should exceed cannabis products and services and at least look at alcohol and merchandise. Adoption and use of a brand for a cannabis-infused beverage is high risk if that brand is similar to a prior existing alcohol brand. A current example is Cointreau’s taking aim at Canopy’s adoption and use of QUATREAU for an infused beverage.

A U.S. federal trademark registration presents its own unique challenges, but is incredibly valuable and beneficial to a brand since it provides the owner with a nationwide presumption of ownership and validity in a trademark, and can also secure priority for the owner with a constructive first use in commerce date that is years before actual use of a mark begins. The U.S. Trademark Office categorically denies protection of brands that violate its “lawful use” rule, and will treat as per se unlawful any applied for mark that covers marijuana, or that covers foods, beverages or pharmaceuticals that contain CBD. With respect to brands that cover products containing THC, since it is federally scheduled, use of the brand would violate the Controlled Substances Act (CSA). With respect to brands that cover CBD or products containing CBD, these may be lawful pursuant to the Farm Bill and the U.S. Trademark Office’s subsequent allowance of marks that claim CBD “solely derived from hemp with a delta-9 tetrahydrocannabinol (THC) concentration of not more than 0.3 percent on a dry weight basis,” however under the Food Drug Cosmetics Act (FDCA) it is currently federally unlawful to introduce CBD – even if it fits the definition above – into foods or beverages.

Even if cannabis is not specifically claimed in a trademark application, cannabis brands have a natural gravitation toward names and logos that can do some of their marketing for them, and announce to the world they cover cannabis. This increases the chances that a trademark application for the brand will get push-back from the U.S. Trademark Office, and if not at the initial review stage, then at the point in time when the brand must submit to the U.S. Trademark Office a sample of (lawful) use of the applied-for mark. While this all sounds like bad news for cannabis-infused beverages, all is not lost.

There are typically ancillary and federally lawful products and services cannabis companies offer under their brands that can be covered in a U.S. federal trademark application, and arguments to be made that registered protection of a brand for the ancillary items should be sufficient to enforce against third parties using the same or confusingly similar brands in their space. Some cannabis brands’ lawful ancillary products are actually product lines (e.g., beverages) offered under the same brand that contain no cannabis. Others may be more causally related, like online forums and blogs. The former is closer to the actual product, and the latter would be more beneficial to a brand that is inherently stronger and more distinctive. One note of caution: A trademark application and eventual registration that expressly disclaim cannabis (THC or CBD) may be difficult to enforce against a third party using the same or a similar mark on and in connection with cannabis. So, while there is a natural inclination to follow a U.S. Trademark Office request to disclaim coverage of cannabis, there may be enforcement consequences down the road.

The cannabis-infused beverage market is poised for explosive growth. The brands that survive – and succeed – will be those that position themselves for growth by clearing and buttoning up their brands as early as possible. The market leaders will be those that select strong and distinctive brands, with geographic and market space around them for growth and expansion; and those that protect and enforce their brands, to the extent possible, at the federal and/or state levels.

The Cannabis Industry and the Science of Seasonality

By Blaise Lucey
No Comments

Let me be honest: I’ve only been part of the cannabis industry for six months. Before that, I worked at B2B tech start-ups and ad tech companies like Roku and Criteo. The most valuable thing I learned is that most good ad campaigns are linked to seasonality.

When I worked at Criteo, the vast majority of our clients were retail and ecommerce. Seasonality initiatives were critical. The more relevant your ads to an upcoming seasonal event, the more relevant they were to the audience. Think about any window display you’ve seen recently – the CVS near me has had Valentine’s Day products in the window since at least mid-January.

When I worked at Roku, we got to take a look at TV streaming behavior. For example, when Ben Affleck started dating Jennifer Lopez again, searches for their movies and music videos skyrocketed. During the space race, general space-related (think Star Trek) TV content went up.

That’s not seasonality – that’s psychology.

As the cannabis industry matures, businesses should start thinking about what seasonal, psychological and cultural factors impact their consumers. Cannabis consumption could be said to be the art of the business, but understanding what cannabis consumers want is the science. Here are three ways to think about that science:

1. The Science of Stash

One analyst recalls that cannabis sales reached “unimaginable” highs in 2020. He called this “pantry-loading” behavior. Let’s call it “stash” behavior.

The buying behavior of a cannabis buyer who buys an eighth is fundamentally different from someone who buys a six pack. The six pack is gone in a weekend. Which flower buyers are buying an eighth just for a weekend? A week? A month?

During the height of the pandemic, with nowhere to go and a lot of anxiety, dispensaries provided at-home entertainment for cannabis consumers. That’s why sales grew by 46%. Cycles of consumption naturally went up. In this case, I think of streaming TV, too – Netflix added 36 million subscribers in 2020 and Roku saw 58.7 billion hours streamed in 2020.

Is there a correlation? Well, stashing behavior obviously correlates with couch behavior. When people spend more time inside, they’re more tempted to go through their stash and cannabis sales increase.

Cannabis isn’t affected by just regular old seasons – it’s affected by what we could call personal, seasonal patterns. Just like streaming TV, when consumers spend more time inside, they buy more cannabis because they consume it faster.

What is the stash turnover rate for your different audiences? What factors make that turnover rate go faster or slower?

Analyzing stash behaviors can reveal your most loyal and high value customers, and offer new perspectives on how to market to different groups.

2. The Science of Celebration.

One estimate shows that Illinois cannabis sales jumped up by 10% in July due to Lollapalooza. Makes sense – more than 385,000 people attended.

women grow event
“When people are coming into cities for events, they’re picking up cannabis then and there, and likely consuming it in true real-time.”

Looking at our own data, there’s a clear spike around St. Patrick’s Day – cannabis sales are 70% higher than average daily sales in February and 54% higher than average compared to March daily sales. This goes against stashing behavior, because the sales happen on the same day.

This is a different science. When people are coming into cities for events, they’re picking up cannabis then and there, and likely consuming it in true real-time.

Event trends can have a huge impact on cannabis sales and psychology. Where there’s a celebration, there’s going to be cannabis buyers. Event trends often translate to tourism trends. And these cannabis buyers aren’t just tourists to cities, a lot of them are likely tourists to cannabis itself as well – novelty consumers who go into a dispensary for the specific event and pick up a little bit of everything.

That’s an opportunity for new brands and more niche categories (beverages, pills, edibles) to connect with a new group of customers. That said, after that initial purchase, how can the brands stay in touch? That’s where dispensaries and cannabis brands need to come up with new strategies for managing cannabis customer data.

3. The Science of States.

Events like Lollapalooza are regional – and so are cannabis markets. In Massachusetts, BDSA data shows continued growth. In the West Coast, analysts call it a “rollercoaster.”

Note the specific pandemic trend lines. Any state that suddenly saw more than 50% sales one year and a sudden slump the next year at the same is bound to see a market crash. It also made it easy to ignore a lot of structural problems – which states like California are now trying to correct.

Legal cannabis sales are radically different depending on the maturity of the market. Let’s not forget that this goes deeper than just states. Only 32% of the California market even has legal dispensaries open right now.

What are regional trends? What are event trends? What are cultural trends?

The more dispensaries and cannabis brands can proactively market to anticipate these needs – and get the message out there to the right audience segments – the better.

Making Cannabis Personal

What keeps becoming apparent is that above all, cannabis is personal. Everyone is looking for something a little different. A consumer’s tastes can change based on all sorts of factors – or not change at all. Different products might suit different occasions. Different messages will talk to different use cases – some people want cannabis that can make a concert better. Others want it to sleep. Dispensaries need to figure out who’s who.

At the end of the day, that’s what makes the cannabis industry so unique. It is an end-to-end experience like no other. From researching products and dispensaries to analyzing brands and products to consuming it, every interaction a consumer has with a cannabis business is very personal. And if they don’t like their personal experience, they won’t come back.

As the industry looks ahead into a competitive 2022, the mission should be simple: make every touchpoint for every customer a great experience, from start to finish.