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Cannabis Business Owners: How To Legalize It!

By Kay Smythe
1 Comment

If you have never heard of the terms social capital or social homophily, you are not alone. To many in the cannabis space, these terms are quite foreign to them, but as we’ll find out, also quite crucial to them.

That’s okay. You’re not a social scientist, human geographer, macro nor micro sociologist, so why would you? However, I can guarantee that your life has been influenced by these two sociological paradigms, and if you’re a working member of the cannabis industry, these are the two theories that could result in your business failing, you ending up in jail or even bankrupt.

Don’t like capitalism? Tough.Let’s talk in layman’s terms.

Social capital: this wonderful theory can, in its essence, be described as the science behind “street cred.” Social capital refers to the lived social networks and relationships that you are a member of. Examples include: family, friendship groups, work colleagues, et cetera.

Social homophily: this even more excellent theory decides your social groups before they solidify. Homophily is the ability of the individual to only associate, and subsequently bond with, those that have similar interests, passions…

Together, these two theories work together to first decide upon your social groups (homophily), and subsequently lead to the building of tighter social networks (capital).

So, how does this relate to cannabis?

Unfortunately, like any other billion-dollar industry, cannabis will eternally depend on politics, the economy and men in suits. For want of a more succinct phrase, the cannabis industry depends on capitalism. Why? Because it’s a business, just like any other, and businesses live and die by whom you’re friends with.

Don’t like capitalism? Tough.

Herein lies the issue with the big players leading the cannabis industry: you guys play horribly with the people that control your fate.

The easiest way to normalize a trend is to have all of the most important people in the world doing itCannabis is still federally illegal, and the general belief is that it has remained this way because the United States government does not yet have a big enough reason to legalize it. Ask any left-leaning sociologist, economist, or political scientist and they’ll tell you the honest truth: the people who run the cannabis industry do not have any influence over bankers, oil tycoons, major industry leaders, or any of the men in suits that you need to be friends with to get anything done in this country.

Think of it like this: the argument for the legalization of cannabis in Europe centers around alcohol. If you were walking home one night and you cut through an alleyway, who would you rather bump into: a drunk looking for a fight, or a stoner looking for a box of chocolate cookies? It’s a logical argument that plays to both the lowest common denominator, and the highest ranks of British government.

The thing is though; as we discussed in my last piece, cannabis is normalized across Western Europe, and so we don’t have the same issues as the United States.

In the United States, the sensible person wouldn’t walk down the alleyway in the first place. Therefore, we have to first normalize cannabis with normal Americans, and then look to legalize.

The easiest way to normalize a trend is to have all of the most important people in the world doing it. However, the cannabis industry is wrought with incompetence that consistently marginalizes the space from societal norms, which is precisely why cannabis is still illegal, and why you’re killing your future business endeavors before they’ve begun.

The End Goal

I was recently told that I didn’t know enough slang to write for a cannabis company. Firstly, I had actually taken all of the slang terms from another member of the company (which was just plain embarrassing for the wannabe industry leader, but I wasn’t surprised – I mean, this is what I do), and secondly, can we all please read the article I wrote a couple of weeks ago about how using slang is one of the most detrimental moves that the cannabis consistently makes that further reduces legalization efforts.

Put on a suit, talk to your local councilman, pay your taxesDo you see HSBC or Chase using slang in their advertising campaigns?

What major political leaders have you seen trying to create divisions between them and those not “cool” enough to be in their gang?

I have no evidence to back this up, but I’m fairly confident that the Koch brothers have never used a skateboard as a consistent mode of transportation to or from work.

As a macro and micro sociologist, I can’t stress this enough: if you want your business to become legitimate, then you have to stop being legit. Most folks in the cannabis industry don’t want to be friends with big bankers, oil tycoons and billionaire businessmen, but creating such an inherent divide between the cannabis business and the rest of the working world ensures that our children will still go to jail in more than half of US states just for smoking a joint.

Time to Swallow Your Pride?

If you are reading this, and are currently an active member or leader in the cannabis industry, then please put your version of ‘street cred’ to the side. Your actions are the reason that most of your businesses fail, the reason you get robbed and don’t have the law on your side, why we have such huge numbers of minority men in our prisons, and more importantly its the reason that the rest of the real world sees you as irresponsible potheads, and not the innovators you could be.

You have the tools to make one of the biggest political changes for two-thousand years, so why not grow up, take one for the team, and have you and your business’s legacy revolve around the good you did for your fellow man, not as the ‘cool kid.’

Social homophily: You and the big business world want the same thing- legalization. Even Monsanto is getting in on the cannabis game, and I’d rather work for them and see actual change than sit in a room full of men smoking at their desks while they sell cannabis from a dark, illegal dispensary.

Social capital: Unfortunately, the big business world wins here. Put on a suit, talk to your local councilman, pay your taxes, realize that the world doesn’t revolve around you, but it will if you play by their rules. You can still be a weekend hippy, but stop doing it in public. The world isn’t ready… yet.

How Science Is Going To Save Your Cannabis Business

By Kay Smythe
2 Comments

Marketing cannabis and the products that accompany recreational use is set to become one of the biggest industries in the United States. With 29 states promoting legal medical cannabis, 14 with it decriminalized and 8 having legalized it completely, you might be thinking this will be the easiest ad-campaign of all time. Unfortunately, science suggests otherwise.

The Science of Marketing

You heard correctly, marketing is a science, but almost half of what we know about the process cannot be applied to cannabis. Why? Because cannabis lives in the grey area of the American psyche. How do I know this?

Science.

In 2015, I completed and published The Safe Haven theory, a socio-demographic linguistic analysis of attitudes toward recreational drug use in the United Kingdom. I won’t bore you with the intricacies of the study, but the findings are important.

The study, using theoretical sociological trends, found that even non-recreational drug users in the United Kingdom favor cannabis legalization. A great number of police jurisdictions have chosen to not longer punish cannabis users, meaning that the law is (mostly) on our side – the side of full legalization and taxation of cannabis as a product for recreational usage, not so dissimilar from alcohol.

In the UK, we could easily put a huge billboard of someone’s grandmother smoking a spliff and make a million on the first day.

Unfortunately, the same can’t be done in the United States.

Advertising law aside, Americans just don’t have the same view of cannabis as Brits. In the last two years, I applied the same framework to a host of American demographics, and – as I hypothesized – localism rules the American market.

If you live in a Red town and you’re a recreational cannabis user, stigma will prevail over the scientific data, and changing that stigma is almost impossible without hard scientific evidence to back-up the marketing campaign.

Qualitative research is key when understanding why people buy into particular industries. This might not be the general belief held by most folks in advertising, as stats and numbers are distinctly easier to work with. However, as last year’s General Election and Brexit vote showed: numbers can lie. Therefore, the best means of understanding what people really want is to actually talk to them – and I mean in-person.

Marketing rules are shifting. More and more, the heads of marketing departments are turning to scientific and scholarly data to assess the current trends in social development, molding their campaigns around this data as a means of showing that they are industry leaders in understanding the phenomena, as well as speaking to target buyers in their own language.

Am I being too wordy? Let me put it simply.

Say your new product is an indoor indica strain with sleep/stress aid properties, this is how you should market it to three specific demographics:

  • Californian recreational smoker in the 50+ age demographic with a moderate knowledge of cannabis strains, “Indoor indica, grown locally with minimal chemical input, good as a sleep aid and positive for stress reduction.”
  • New York medical user, 30+, business background, “This strain is an excellent sleep aid, can decrease stress without taking off the edge of your day-to-day workload; highly recommended for those employed in a full-time, private sector position.”
  • Small town with predominantly low-income demographic employed in blue-collar industry, “affordable means of relaxing after a tough day at work that won’t give you the same cancer risk as tobacco.”

We market the same strain to each of these demographics, but the language used in the campaign is more important than the product itself. In the UK, the same strain would be marketed across the country using something like:

“Dank strain with sleep aid and relaxation properties, best for chilling out at the end of the day – definitely not recommended prior to work!”

What this means for the United States cannabis marketing specialist is simple: you need to invest as much as you can in getting scholarly researchers out into the field and figuring out the local socio-demographic linguistic trends for your target buyers. Luckily, this can be a fairly affordable means of research.

Marketing specialists have two options in uncovering this data:

  • Use students currently enrolled in universities and colleges, either offering paid internships or college credit for bulk research.
  • Hire an academic consultancy corporation. This is rapidly becoming a norm in for companies looking to expand their marketing by using scientific data, particularly in industries related to sport and the outdoors.

Just like how Pepsi really missed the mark with their latest failed advertising campaign, cannabis companies are at significant risk of ostracizing themselves from a wealth of demographics that would otherwise be open to recreational or medical cannabis use as an alternative to harsh pharmaceuticals, alcohol and even some forms of therapy.

Language is key, and if you can’t talk to your buyers on their level then you’ve already lost your edge over the competition.

For Here or To Go? Social Consumption of Cannabis

In November 2016, residents in Denver, Colorado voted to pass Initiative 300, allowing businesses to seek social marijuana use permits if neighborhood or business groups also agreed and signed off. In the very near future, the process for how cannabis consumers purchase and consume cannabis will no longer be restricted to only going inside a dispensary to make your purchase and returning to a private residence to consume. Instead, it may be as simple as visiting a drive-thru and then going to a cannabis bar or social club to enjoy.

Cities such as San Francisco have had on-site consumption laws in place for some time, with notable locations including sparc, a well-known dispensary with two locations in the city, and the recently announced Power Plant Fitness, a gym slated to open in late 2017 that will allow members to consume cannabis while working out.

Social consumption of cannabis is not a new topic of discussion—just look at Amsterdam’s cannabis coffee clubs—but it is undoubtedly a legalization trend that will continue to be at the forefront as more states pass legalization or convert to adult-use markets. There remains one reoccurring theme, however: a lack of clarity on how these laws will be structured and how social consumption regulation will be put in place.

In Colorado’s state legislature, there was bipartisan agreement that the state needed to allow for venues to let patrons consume cannabis in order to deter residents and tourists alike from consuming in public places such as sidewalks and parks. A Republican-sponsored measure proposed in the state legislature would have allowed for the regulation of cannabis clubs in a similar format to how cigar bars are managed, but that legislation was put on hold for rewrite.

Within the state, there also exists a heated debate over whether or not the creation of social cannabis clubs would instigate federal intervention by the new administration, especially in light of Attorney General Jeff Sessions’ comments in opposition of the adult-use cannabis industry.

One thing is clear: since Denver’s passing of the social use ballot measure in November, there have been numerous halting attempts to put a law in place and the current law is vague. There remains much work to be done before Initiative 300 may be enacted.

For those interested in learning more or joining the discussion, the National Cannabis Industry Association (NCIA) will be hosting a panel titled “For Here or To Go? Evolving Regulations on Social Consumption of Cannabis” at its 4th annual Cannabis Business Summit & Expo in Oakland, June 12-14. The panel will be led by Sam Tracy of 4Front Ventures, who supports the company’s business development and communication efforts.

You can learn more about the Summit and see the full conference agenda on the Cannabis Business Summit & Expo website. In celebration of 4/20, NCIA has extended the early bird pricing deadline for conference registration from April 21 to April 24 to allow for busy cannabis business owners and operators to take advantage of the savings.

Cannabis Industry Journal readers may use discount code CIJ15 to save 15% on registration.

Cannabusiness Sustainability

Dear Cannabusiness Community

By Olivia L. Dubreuil, Esq., Brett Giddings
2 Comments

Dear Cannabusiness Community,

You may have read our two recent articles. We received so much positive feedback that Aaron Biros (editor-in-chief of Cannabis Industry Journal) has invited us to continue with our own column at CannabisIndustryJournal.com. We are very happy to launch this column, and we thought we would take this opportunity to introduce our project, our vision and ourselves so you can understand where we are coming from when you read this series of articles.

Brett and I both have a background in business sustainability and corporate responsibility. We both have backgrounds in management consulting, with a specific expertise in sustainability issues along the supply chain. We have been working together for almost nine months now on sustainability issues in the Bay Area. In May, we started to get interested in sustainability in the cannabis industry and before we knew it we were diving deep into research relating to the environmental, social and ethical impacts of the legal cannabis industry. It was actually difficult to find a lot of information, as the reign of prohibition still very much influences what is available.cannabusiness

In June, we attended the National Cannabis Industry Association’s conference in Oakland to open up the conversation with cannabis industry players and to find out about people’s attitudes and approach to sustainability. The results were overwhelmingly positive. Not only were we encouraged to launch a project, but also excited to discover that many of the speakers presenting at the conference referenced sustainability in one way or another when they talked about environmental impact awareness, social justice, ethics or about staying competitive when “big business” enters the market.

What started out as a side project quickly became the center of focus this summer when we decided to incorporate Project Polaris, a California non-profit, to deliver sustainability knowledge and expertise to the cannabis industry.

Our thinking is as follows:

Thinking about sustainability, means thinking strategically about business. As we forge a new and upcoming industry, let’s seize the opportunity to make it a sustainability-focused one! Let’s create generally accepted industry principles that fosters a positive image of the industry and teaches newcomers about best environmental and social practices. Let’s create a voluntary and industry-led socially responsible code of conduct for cannabis business owners and suppliers, helping the regulators, as they will be drafting all of the future regulations of the legalized cannabis market. Let’s do more research on the market and the consumer. Let’s develop clean and green alternatives to dirty processes or practices. Let’s elevate the discussion and create a model industry, one where short-term, large-scale, quality-lowering corporate interests are kept at bay.

With this vision in mind, we created Project Polaris because we believe that this is a real opportunity for the industry to be a role model for other industries (and educate legislators as well as drive public opinion in those states that are still under prohibition laws). We believe there is a real economic opportunity for those businesses that understand how to embed sustainability properly within their business model. Because we know that sustainability influences legislators in a positive way because it sheds a positive light on businesses.

In the upcoming months, we will continue to research and report on sustainability-related issues facing the cannabis industry, such as packaging, edibles, “organic” in cannabis, butane extraction versus CO2 extraction and so on. We also welcome questions from our readers. If you have a question, please post it in the comments section below.

We will also take this opportunity to call out to cannabis industry organizations, cannabis businesses, or cannabis related services and product suppliers to get in touch with us if they wish to find out how to integrate sustainability more concretely into their action plan. We are not planning on doing this alone, we are seeking partners to join us on this journey, and we want to partner with you on your journey to Cannabusiness Sustainability.

PS: We still have one seat open for the board of directors and would love to hear from you if you are interested!

jazminHupp

Women & Leadership in the Cannabis Industry

By Aaron G. Biros
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jazminHupp

Launched in August of 2014, Women Grow began with the goal of establishing an organization for professional networking that supports women leaders in the cannabis industry. On a platform of fair and inclusive business practices, the organization emphasizes the importance of a social mission in business planning.

women grow event
Women Grow holds various events with thought leadership and networking opportunities

Through a variety of networking and educational events, Women Grow brings together a community of established and new industry professionals that helps connect and empower women to grow their business and succeed in the cannabis marketplace. Jazmin Hupp, CEO and co-founder of Women Grow has been referred to as a “genius entrepreneur” by Fortune Magazine and was named one of the top businesswomen in the cannabis marketplace by Forbes. “Women can be very community and healthcare-minded, providing the backbone for establishing an ethical cannabis industry with a focus on health and wellness,” says Hupp.

According to data from the U.S. Department of Labor, women make approximately 80% of all healthcare decisions for their household. Not only is Hupp’s organization helping to empower women in the workplace and in leadership roles in the industry, it also teaches good business practices. “The primary demographic purchasing cannabis in the future will be women, because they purchase 90% of OTC medicine and do 80% of household buying,” adds Hupp. “Women are the leading purchasers of alternative foods, health and wellness products, and they drink more alcohol by volume than men.” 

jazminHupp
Jazmin Hupp, CEO & co-founder of Women Grow

According to Hupp, women control the majority of consumer spending and will be looking for a safer way to recreate than consuming alcohol, and cannabis products will provide an answer. “If your target market is going to be driven by female spending, it just makes good business sense to put women in executive roles and on marketing teams,” she adds.

Because cannabis is still a schedule I narcotic in the eyes of the federal government, there are issues that involve more than just effective marketing tools. “Child Protective Services has the ability to deem a household with marijuana present unfit for children, largely due to the stigma and federal classification of cannabis,” says Hupp. “Mothers are particularly hesitant to get involved [directly in a cannabis business] because of the possibility of losing their children, hence why some mothers work on the ancillary side of the industry, as opposed to working directly with the plant.”

women grow group
Women Grow connects women leaders both new and established

Women Grow is actively working to address these needs in America’s fastest growing industry on a national scale by advocating for the end of marijuana prohibition. “This is a brand new industry that can be conscious of social, economic, and racial injustices so there are no glass ceilings for women or minorities,” Hupp says. “This comes out of a very socially conscious movement where leaders understand the benefits of inclusion, diversity, and the importance of socially responsible decisions.”

With the cannabis marketplace still in a nascent stage, opportunities to support diversity and inclusive business practices makes this industry particularly unique.