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Leaders in Infused Products Manufacturing: Part 1

By Aaron Green
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Cannabis infused products manufacturing is quickly becoming a massive new market. With companies producing everything from gummies to lotions, there is a lot of room for growth as consumer data is showing a larger shift away from smokable products to ingestible or infused products.

This is the first article in a series where we interview leaders in the national infused products market. In this first piece, we talk with Keith Cich, co-founder of Sunderstorm, Inc. and the brand Kanha Gummies. Keith and his business partner, Cameron Clarke, started Kanha Gummies in 2015 after long careers outside of the cannabis industry. In 2015, they went all in and started the brand, which grew to be a major player and driving force in the California market.

Next week, we’ll sit down with Mike Hennesy, director of innovation at Wana Brands. Stay tuned for more!

Aaron Green: Keith, nice to meet you. Thank you for taking the time today. Tell me about how you got Sunderstorm off the ground and how you got involved in the company?

Keith Cich: Absolutely. So, my business partner, Cameron Clarke, is a lifelong friend. We met as undergraduates at Stanford University. I went on to work on Wall Street and did commercial real estate. Cameron has been a serial entrepreneur, from a much more technical side working in software. He was actually one of the first people to bring the Açai Berry to market and put it on the shelves of Whole Foods. So, he’s kind of the science and operations guy and I’m the finance and business guy.  It’s been very synergistic.

Keith Cich, co-founder of Sunderstorm, Inc.

By 2015 we had both traveled extensively and were big advocates of plant medicine and cannabis as another form of plant medicine. We also have a 15-year track record of going to Burning Man together. Really, explorations in consciousness and plant medicine were what tied us together. When cannabis came up as a business opportunity, we just kind of looked at each other and said, you know, we have a lot of business experience to bring to the table. We have a love of the plant and an appreciation for how it will impact society. So, we kind of went all in in 2015 under proposition D, and set up operations in Los Angeles at that time.

Aaron: How did you decide to get into infused products from the list of choices?

Keith: Yeah, we initially set up extraction, but we felt that cultivation and extraction would ultimately be commodities.  However, if you could develop popular brands you could carve out valuable shelf space and have longevity.

We acquired a small gummy company in February 2016. In the beginning of it all – I call it “Cannabis 1.0.” At that time, a lot of the packaging was really oriented around men in their 20s focused on “high consumption.” The packaging was a lot of black and skull and crossbones, and it didn’t really represent who Cameron and I were as people. You know, we were a little bit older and well-traveled. And we just felt like when adult use would come in that brands would take a different pathway. So, we hired a branding person to come in and help with packaging.

We really focused on a product that would appeal to females because it was clear they were going to be 50% of the market – and packaging that would really appeal to older people, which we thought would come on board once the stigma of cannabis was reduced. And so, we really set up Kanha gummies, at that time in early 2016, to be this adult use product that would appeal to a wide spectrum, both medical users as well as adult users in the time that would come in the not too distant future.

Aaron: Yeah, that’s interesting. You talked about how you thought about differentiating in the early days getting off the ground. How do you think about differentiating today?

Keith: The two things that really set Sunderstorm apart from the crowd is automation and innovation. We were the first gummy company to invest hundreds of thousands in European confectionery equipment, which allowed us to scale our business, but more importantly, produce an identical product every time. The reason we hear people come back to Kanha gummies is that they have the same replicable experience every time, which is really the key to CPG companies. So, it’s really stringent automation that allowed us to develop precise dosing. In fact, in 2019, we won the award from CannaSafe, which is the largest lab in California, for the most accurately formulated edible. We dialed in manufacturing and that’s what set us apart in the early years.

My partner is really geared towards science and implementing new delivery systems for cannabinoid products. We were the first company to come out with a nano edible about a year ago in 2019 and we are still the leader in offering consumers nano-molecular delivery systems. What does that mean? One of the common problems with edibles is that it takes 45 minutes to an hour for it to kick in. We all know friends who take a cookie and double up on the cookie and end up having too big of an experience. Rapid onset curbs that risk. Our nano gummy kicks in about 15 to 20 minutes, and it’s got just this really nice journey to it. We’ve separated the audience between the people that have our classic gummies, which takes longer to kick in, maybe a little bit stronger and the nano technology, which has a really fast onset, and really kind of a discrete journey. We stay ahead of the competition today, because of the nanotechnology that we’ve implemented in gummies.

As I always say, it’s not about how much vitamin C you take – it’s more about how much vitamin C gets in your blood stream. And it’s the same with cannabis, right? It’s how much THC and CBD or other molecules get in your system. So it’s about really having the highest bioavailability and the best performing products. And that’s what our customers have come to believe about Sunderstorm.

Aaron: You’ve talked about a couple new products from Kanha. At a high level, can you talk about your process for ideating and creating a new product?

Keith: Sure. I could use an example of a product that we’ve just kind of relaunched. It’s called the Tranquility gummy and it’s targeted for sleep. What we’ve discovered is there’s a whole host of medical reasons why people take cannabis – as well as the adults who take cannabis for entertainment – but sleep is a major issue for Americans of all ages. It’s surprising. It impacts 20 year olds and it impacts 60 year olds.

Part of the process of coming up with a product is trying to figure out what’s the need in the marketplace. So in this case, we really looked and said, hey, let’s target sleep and see if we can experiment and come up with a product. Our first round of Tranquility had a mix of CBD and THC in it because both of those are valuable for sleep. CBD is a chill-pill that kind of makes you calm so you can go to sleep. THC is often something that helps people stay asleep.

“We go through many iterations of a product before it actually hits the marketplace.”In that product, we also added 5-HTP, which is a serotonin booster, which once again, people take when they have anxiety or stress. So it’s kind of a stress reliever, and it helps you be calm, which again, I think a lot of the problems for people who have an issue with going to sleep, it’s having so much on their mind that they can’t stop the monkey mind to actually enter into sleep to begin with.

We also added just a small amount, one milligram, of melatonin. We know that Melatonin is a sleep aid, but you don’t want to take so much melatonin that your body stops producing melatonin because you’re taking the supplements. So at the end of the day, you want to just encourage and coax your body into healing and not overkill it with a pharmaceutical. Right?

So that was our first generation and we worked with that but my partner looks through a lot of research that’s occurring on different cannabinoid particles, and it became clear that CBN, which is kind of a new cannabinoid that’s hitting the press, actually had really strong properties for sedation and keeping people asleep. So, we added the largest dose of CBN in any gummy, and then re-launched that product a month or two ago. And we’re getting incredible feedback from shops that they’re selling out. It’s awesome, because people are actually taking the gummy and having the effect of falling asleep and staying asleep.

It’s the combination of the different factors. No one factor is so overwhelming like a pharmaceutical drug. But it’s the combination of the different factors together that make for a great product. And we fortunately have dozens of people in our company who are happy to do R&D for our new products. We also have some people outside the company that are consultants and experts as well. We go through many iterations of a product before it actually hits the marketplace. And that’s the second thing: it’s a lot of rigorous R&D testing of products before we launch it for the end consumer.

Aaron: Yeah, so if we can touch on that, can you tell me about your experience with your most recent product launch? Whether it’s the NANO5 or the Tranquility gummies? How did you think about preparing the market for the launch? Preparing your team for the launch? And then how did it go?

Keith: I’ll talk about our sublingual line called NANO5. Again, it’s a nano product where every molecule of CBD or THC is wrapped in a molecule of fatty lipids, so that when you spray it on your tongue, it tricks your body into absorbing it directly into the bloodstream and doesn’t actually go through the digestive tract and the liver. The bioavailability of these sublinguals is high and 70 to 80% of the cannabinoids actually get into your bloodstream.

We’ve done blood sampling tests versus your standard tincture. Your standard tincture is just MCT oil and cannabis, it’s pretty crude, kind of caveman-ish, quite frankly, when compared to the delivery of pharmaceuticals are today. NANO5 is a much more advanced delivery system.“We’re here to really try to educate people the best that we can.”

Now we have the product… right? This is a sophisticated product that’s challenging for bud tenders to explain when consumers come in with their medical needs. We had to create a lot of written brochures about how the product works, what the dosages are and that sort of stuff. Then our sales people go in and actually train the shops. They’ll pull bud tenders out and do training sessions and talk about NANO5, what makes it different from other tinctures, what medical conditions is it good for, etc. It’s kind of old fashioned, in-store training.

Then we finally have implemented a new piece, which is digital bud tender and consumer training. We are leveraging a platform for bud tender training, we talk with the shop, talk about the product and if the shop manager agrees we send a link out to all the bud tenders who take a quiz. The bud tenders get educated on an online platform, take a quiz, and then when they pass the quiz, they get a licensed sample of the product to try themselves so they have firsthand experience.

What we find in many shops is that the consumer is still not that educated about cannabis, particularly for medical uses, and particularly what I call the “new consumer” that hadn’t used cannabis in their lives, because it had such a high stigma to it and now with the reduction of the stigma it means a 40 or 50 year old woman might go into a store to find something to help with pain, or help with anxiety. Now, the bud tender can use the training that they’ve learned on NANO5, and understand that this could be a good product for them, and then talk about it intelligently and give some materials to the consumer before they walk away.

It can be intimidating for consumers to go into a shop, you know, it’s a new experience. It’s like going to the doctor’s office, you don’t always hear what they say, because you’re kind of nervous. So giving them the written materials, and even a test to follow up on online really allows for a form of education that is in tune with the user needing to learn at their own speed and really to just take away what’s important for them.

Aaron: Did I hear you correctly? The user – the end consumer – can also do a quiz?

Keith: Yes. Sunderstorm is about science and education. There’s a lot of assumptions in the marketplace that may not be correct. So, we’re here to really try to educate people the best that we can. And we really believe the rest of the world acts in a digital manner for education. In some ways, cannabis is a little bit behind the times because it’s difficult to advertise on Facebook and traditional venues. So we have one hand tied behind our back when we’re dealing with the digital world. But we at Sunderstorm are big believers that digital will be the way that cannabis consumers learn about brands, learn about products and learn about cannabinoids, and we want to be at the forefront of that education process.

Aaron: OK, we talked about some challenges. One of the challenges I hear a lot is about sourcing ingredients for infused products. How do you go about sourcing ingredients in your infused product lines?

Keith: Our primary ingredient that we source is distillate. And starting back in prop 215 days, we have a zero parts per billion policy on pesticides. What we discovered is before lab testing and licensure came in place is that 80 to 90% of the oil out there actually had pesticide levels that were way beyond safe. It really took licensing and the implementation of lab testing to change that regime. We now buy distillate from third party extractors and we have a handful of really big, really solid players onboard who provide that oil to us. The key is that if there’s any detectable trace of pesticides, we send it back and they replace it with a not-detect batch. So for us, that’s really the key to the whole supply chain: starting with oil that’s clean and really good quality.“Delivering the product in a compliant manner has been one of our logistical challenges, but one that I think we’ve done quite well at day in and day out.”

Fortunately, we’re one of the bigger brands in the industry so we have a little clout to make sure that the people that give us our oil are giving us their top shelf, and not their bottom shelf. We then have also made it a point to use only natural flavoring and natural coloring in our gummies. Believe it or not some of the red coloring actually is derived from beets and beet juice. We use spirulina as a source for our blue green colors. All of the gummies that we produce, not only have no pesticides, but they have no artificial flavors and no artificial coloring, which is of course standard in mainstream gummies that you buy at CVS or the local drugstore. So we really feel like we want to put out a healthy product and Cameron and I always look at each other, like, ‘we wouldn’t sell a product that we wouldn’t put into our own bodies.” And we’re very health conscious, you know, buying organic produce and not wanting pesticides to be inside us.

Aaron: Can you give me an example of a challenge you run into frequently, and this could be a business challenge, a marketing challenge, financials… something that you run into frequently?

Keith: Yeah, so we not only manufacture our products in California, but we also do self-distribution to over 500 retailers, meaning in store dispensaries and delivery services throughout California. With these 500 customers, we have two distribution points, one in LA and one in the Bay Area where I’m located. It’s an amazing challenge logistically. Not only are we running a manufacturing operation that requires precision – and it’s highly regulated – but we run a distribution company that’s highly regulated. For us the challenge is how do we efficiently deliver product to the Oregon border when we’re manufacturing in LA? We’ve had to spend a lot of time developing protocols for logistics and distribution to be able to basically meet demand throughout the state. And we’ve been growing like crazy. We add 10 new shops probably every week.

Delivering the product in a compliant manner has been one of our logistical challenges, but one that I think we’ve done quite well at day in and day out.

Aaron: What kind of trends are you looking at in the industry? And what keeps you excited?

Keith: I think COVID-19 has touched every aspect of our lives and it is impacting how we consume cannabis. Because it’s a respiratory disease, I think people have been wanting to shy away from smoking flower or vaping to keep their lungs healthy as a precaution in case they get it. So edibles have been kind of a natural choice for that. As well as the simple act of sharing something; sharing a joint raises a lot of safety risks, especially during the pandemic. It’s a lot easier to share a single gummy out of a bag safely.

Secondly, what I’ve noticed is that parents have their kids at home and yet they still want to consume cannabis as they did before. Edibles have been big because of discretion. So mom or dad can pop a gummy and have a spritzer before dinner and enjoy the night and my theory is happy parents make happy kids. So discretion has been critical.

Then I think there’s a whole round of new entrants that I mentioned before. These are people that maybe smoked weed in college or high school and haven’t touched it for 20 years and now that the stigma has been reduced, they’re coming back to the marketplace and wanting to explore. They may try a vape product, but very few of them want to smoke, as the country is generally pretty anti-smoking.

I think edibles and gummies have been a way for new cannabis consumers, particularly those who are older, to come and enjoy the positive effects, the medical effects and the social lubricant that cannabis offers, while being safe and discreet at the same time. I think COVID has definitely changed the way that that people think about consuming cannabis.

Aaron: Okay, awesome! Lastly, what would you like to learn more about? What are you interested in?

Keith: I have a degree in philosophy and religion. I’m a big fan of the evolution of consciousness. I think that is the container of the story through which we view human civilization and I honestly think we’re at a turning point for how humans in Western society view plant medicine.

I think cannabis is just the first to come along and be legalized. They’ve been doing phase II and III clinical trials on psilocybin and end of life anxiety. People, particularly war veterans, are using ecstasy or MDMA for depression.

What we’re discovering is that what we think we know about the mind is only the tip of the iceberg on how the mind works. I’m interested in exploring how these plant medicines impact individually with our psyche. Secondly, what happens to society when we reach a tipping point and a majority or at least some significant portion are taking these plants and medicines on a regular basis? It opens us up to a whole new perspective on ourselves, on society and on the universe that we live in. So I read a lot in those fields. And that’s what really excites me.

Aaron: Great. So that’s the end of the interview. Thank you for that.

The UK Cannabis Industry Needs New PR Strategies

By Kajal Shah
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The cannabis marketplace is an ever changing one. The opportunities being generated in the UK space are immense. Yet despite the countless benefits cannabis can bring to the economy, patient care and supporting health and wellness for consumers, an image problem continues to persist.

Despite its expansive growth, there is still a lot of uncertainty and misinformation. Having worked with several cannabis businesses in recent years, I firmly believe there are a myriad of ways in which the industry can benefit from PR support. A strong PR strategy can not only drive media coverage, but help to reach customers, shorten sale cycles, bolster brand reputation and drive change within political and regulatory circles.

Whether you are a flourishing cannabis brand, a start-up or ancillary cannabis business, PR can help you stand out from the competition and become a credible voice in this competitive market.

Here are some key ways in which cannabis businesses can profit from PR:

Campaigning for progress

Each category of the cannabis sector faces its own reputational challenges. Medical cannabis is perhaps the most significant of these, yet it still goes largely misunderstood by the general public. This, along with regulatory restrictions and a lack of education in the clinical community means cannabis stigma continues to exist.

For the thousands of patients suffering with the likes of multiple sclerosis and epilepsy, still struggling to access this fully legal drug, this is a tragic, pressing issue. There are several families and individuals across the UK who campaign for medical cannabis access to be improved, by leveraging their story via the press and lobbying Parliament. Some of these high-profile families have been supported through strategic communications at The PHA Group, most notably Hannah Deacon, the mother who successfully campaigned for the first NHS cannabis license for her son, as well as the parents of toddler Charlie Hughes, who are currently seeking Judicial Review against NICE.

Both cases offer strong proof of the powerful role PR can play in supporting those in need of medical cannabis. Through speaking to media and generating coverage of the stories of both families, the complex issue of medical cannabis access has been thrust into the public eye, this in turn putting fresh pressure on the Government to address this through much-needed change. For cannabis leaders and professionals looking to invest in PR, it is critical that your PR partner understands the key issues, culture and complexities of the industry to create credible stories and campaigns to gain cut through in the media.

Reputation enhancement

CBD is the most established sector of the UK cannabis industry, having become firmly attached to the lifestyle scene in recent years with its broad spectrum of health and wellness products. With approximately 7.3 million people in the UK using CBD products each year through a market already worth an estimated £300 million, the industry is predicted to grow at a rapid rate, with experts claiming this figure will more than triple in the next five years.

Just some of the many hemp-derived CBD products on the market today.

Despite its impressive growth, the industry has faced its own stumbling blocks. Until this year, CBD had been in a period of regulatory uncertainty and the industry faced understandable criticism when high profile cannabis probes found over half of the most popular CBD oils did not contain the amount of CBD promised on the label. This did nothing to help the already precarious public perception of CBD in the UK, meaning firms have had to work extremely hard to heal their reputations and ensure their brands are deemed trustworthy by consumers going forward.

With hundreds of brands claiming to be the best option, establishing credibility and becoming a trusted voice is key. Educating your audience by positioning company experts will help to keep your audience up to speed on the most current information and allow your brand to achieve an authoritative voice within the cannabis space.

Amplifying awareness 

Driving awareness drives revenue. It doesn’t matter if your story and products are revolutionary if nobody knows they exist! PR can help build a narrative which conveys the purpose of your business, along with its vision and products, whilst promoting key insights to keep your company relevant. The power of public relations in this regard is very similar to that of positive word-of-mouth.

Strategic brand building

UKflagCannabis companies can’t advertise like mainstream companies, so they must tread carefully in the marketing of their products. However, there are great possibilities within PR. Through case studies and careful product placement, PRs can work carefully with CBD companies to raise awareness of the benefits of their products and solidify their brand image, without risking trouble with the ASA. With CBD brands and manufacturers springing up left and right, there are opportunities aplenty for PR firms to lend support, whether that’s from a consumer perspective, across food and drink, beauty or general wellness, or from a strategic business view.

Stories sell. It’s vital for a brand that wants to develop a sustainable, long-term plan to build a story which resonates with its audience. Strategic PR can therefore increase brand value and coupled with a digital marketing and social media strategy, boost engagement and elevate the profile of the business.

A wealth of opportunities

The legal cannabis industry is gaining traction and is one to watch. In relation to medical cannabis, the industry has called for change to improve patient access and pressure has been exerted on the government and regulatory bodies to normalise cannabis as an effective treatment for a myriad of health conditions In parallel, the CBD sector is only set to grow and in recent years, there has been increasing interest and investment into hemp, a versatile variety of the cannabis plant hailed as the next big thing in sustainability.

Cannabis is a commonplace yet spectacularly complex plant. It therefore needs a PR strategy which can uncover key angles and opportunities across a multitude of avenues to position brands within the space for success and growth.

Whilst there is still much to learn and navigate in cannabis, PR has an important role to play in changing attitudes as the industry continues to expand and evolve. I am excited to see where it goes next.

Leaders in Extraction & Manufacturing: Part 5

By Aaron Green
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Cannabis extraction and manufacturing is big business in California with companies expanding brands into additional states as they grow. This is the fifth and final article in a series where we interview leaders in the California extraction and manufacturing industry from some of the biggest and most well-known brands.

In this week’s article, we talk with Kristen Suchanec, VP of Production at Island. Kristen converted her experience in traditional consumer packaged goods to cannabis to help create a brand that is sought after by many. The interview with Kristen was conducted on August 21, 2020.

Aaron Green: Good afternoon Kristen, I am glad we were able to put this interview together. I know you have been very busy!

Kristen Suchanec: I’m so sorry this took so long to actually work! Thank you for bearing with me. I’m happy we are able to talk.

Aaron: Great! I like to start off the conversation with a question that helps our readers get to know you a little better. So, Kristen can you tell me how you got involved at Island?

Kristen Suchanec, VP of Production at Island

Kristen: My background is in manufacturing and planning for consumer packaged goods. I had a friend of a friend and we were just at a happy hour and I asked what he was up to. He was actually our VP of Finance at Island and he handed me a box of pre-rolled joints. They were our Island Minis and I thought it was a great customer experience. I loved the brand and packaging which made it a consumer product versus, you know, this was a few years back where cannabis wasn’t necessarily commoditized or branded. I got really excited about that because I feel like cannabis should be traditional CPG and it should appeal to different people and it should have different brands that appeal to those different groups. So I literally just started a conversation. His brother is our founder and CEO and they needed someone to run production so that was my background and it all kind of lined up and I ended up being employee number five at Island!

Aaron: Wow, employee number five – awesome! OK, great. That is some nice background about how you got involved at the company. The next questions get into product development and manufacturing. The first question is: what’s your decision process for starting a new product?

Kristen: Yea, we are right now owning the lane between cultivation and distribution. So, getting those raw materials for whether it be concentrates or flower and then converting them into that final packaging for everything. So that is what we focus on and spend all of our time with automation and trying to make that process as efficient as possible.

When we’re looking at a new product we’re not necessarily creating a new extraction, we are really looking at the market and the end consumer and what people want. At Island we’ve really focused on vape, pre-roll and packaged flower. Those are the three categories we are working on right now. We are expanding and looking to move more towards vape and live resins and specialty concentrated products that we haven’t really had in our portfolio before. What we would like to do is make sure we have the capability to manufacture that and then take a look at where we think the market is going. We are trying to go in the flower, pre-roll and vape because that is where we spent so much of our time getting pieces of automation so not everything we are bringing in house is manual.

Aaron: Now when you say the capability to manufacture that are you talking about from a packaging perspective or…?

Kristen: Yes, so we won’t do any extraction on site. It’s getting distillate, shatter and flower and then we take that and convert that either into pre-rolled joint, a package of flower or any other final product. So, we are looking at automating that packaging piece.

Aaron: Got it. OK, so the next question — and I think you kind of touched on this as well — are you involved in manufacturing to the extent that you are manufacturing the packaging?

Kristen: Yes absolutely. My whole team’s manufacturing is based out of Oakland. That’s where we do all the conversion of products. I oversee that entire team and have been really involved in a lot of the equipment that we have sourced and iterations that we’ve gone through to make sure that we’re able to automate as much as possible. We’ve really focused on the issue of weighing the material. For our flower line everything is weighed and put into a jar, capped, sealed and labeled for it to come off our lines. We don’t have anyone in packing or anything like that. Our pre-rolls manufacturing is an automated machine where it actually weighs the flower before going into the cone so we’re not having to weigh after the fact and take into account the weight of the cone because that’s so variable so we know that the customer is getting consistency. Then for the vapes, it’ssame thing – the volumetric doses everything.

I have to give my credit to everyone on the floor who is doing the day to day, they find so many new solutions since they are the ones that are hands on.  I am really involved in what new equipment we need, what problems we are looking to solve and what’s causing our bottlenecks so we can continue to improve our process week over week and year over year.

Aaron: We’ll dig into some of those problems in a bit. What is your process for not just starting new product but for developing a new product?

Kristen: Yeah, absolutely. So, I think it’s really interesting to see where the market is going. What’s selling really well and especially over the past year pre rolls have been a huge growth platform for us. And especially now, we’ve seen some changes because of COVID as well. We have single joints. But then we have our Minis, which I’ve mentioned before, which are half gram joints. We’re seeing sales on those actually increased because I think people are sharing joints as people want individual things because of this pandemic.

When we go through this process, we’re really – again – we’re so focused on what the consumer wants, and what we think is going to add to our portfolio. Then when marketing and our product team comes to me, we really focus on our machinery, what we can do with it currently, and if we would need something additional. So,we’re excited about expanding into 510s right now. We’re looking at how we can automate the process of capping – we can fill right now, but not cap. And then we also take a look at packaging.

I think it’s a little different than creating like a whole new product, extraction or anything like that, but we were looking at more sustainable options for packaging for child resistance because we’re trying to move away from barrier bags as much as possible. We’re looking at, okay, how many stickers do we need to put on there? What is the labor time going into each piece of product? And again, how are we eventually going to get some consistency across product lines, etc.

So, it’s really taking all three of those components, making sure we’re getting out the customer that feels like they want. I’m having it either fit into our process or again, then go through and look at what automations meanand automation equipment investment you want to make for long term future investments.

Aaron: Are you developing new products internally, or are you relying on outside manufacturers for that?

Kristen: Not everything we do is internal. We have a big network of, you know, cultivators and extractors we work with, but we’re in the midst of getting our own cultivation and manufacturing in house by working with other companies. So with that we’re doing everything.

Aaron: Do you ever bring in external product development consultants for helping out with your processes?

Kristen: No, we don’t bring in consultants. But we have brought in another brand into our fold via a brand called Neutron Genetics. That is part of our overall portfolio. We work very closely with the founder because he has a lot of trade secrets, a lot of his own processes to make sure you’re getting the best product for that specific brand.

Aaron: In your product development, what does getting stuck look like to you?

Kristen: That’s a good question. I think one of the biggest challenges is working with the plant itself, because it’s not consistent and it’s not homogenous. You could get the same strain from the same cultivator, but it’ll be a different batch. It might be a little stickier or a little larger, etc. When you’re looking at traditional manufacturing and automation, you want consistency, homogenized liquids, same viscosity every time, and we don’t have that because the plant itself is natural and is going to have all these different expressions depending on the batch and how it was grown and how it was trimmed even.“I think it’s really the proper equipment, the proper training and then, again, continuing to evolve as a team.”

So, getting stuck means finding an off-the-shelf solution that might work for, you know, nuts and bolts or some kind of food production and then you’re going to have to convert it to actually work with the cannabis plant. So that’s what makes it so challenging, but also really exciting. In the bud, humidity and air can really throw off a manufacturing process which is really different than just doing beverages for example.

Getting stuck means really having to work with the plant concentrates specifically if you think about just the nature of those whether it be shatter, distillate or very sticky product. So again, working with machinery isn’t always what goes hand in hand. So, getting stuck is dealing with all those different formats and inconsistency using the same product day after day.

Aaron: It sounds like consistency is kind of a main topic here?

Kristen: Yeah, I think it depends on what product format we have. For example, about a year ago, we launched infused pre-rolls for Neutron where we’re putting flower, kief and shatter into a joint. So that’s going to perform differently on a piece of machinery than just straight flower.

I think it all depends on the product. Usually it happens when it’s in that machine, you’re trying to get a good flow and a good consistency. You want to have time studies, you know how long it takes to make each batch. But if a certain flower mix is performing differently, it’s getting the settings of the machine dialed, right? It’s also properly training personnel so people know how to react when things get going. Sometimes things get physically stuck in the machine as well, so to be able to react on that.

I think it’s really the proper equipment, the proper training and then, again, continuing to evolve as a team. So for our pre-roll machine, we are now on our third version of it, just because we kept running into the same roadblocks and I’m hoping that continues to evolve and we just continue to get better equipment year after year.

Aaron: I see, do you ever hire outside consultants when you do get stuck?

Kristen: We’ve worked closely with vendors. I will say that we’re not a machine shop or engineering firm. So we’re not the ones creating a lot of what we use on the floor. We’ve partnered with various vendors, which has been helpful, but we haven’t used external consultants.“When you see the huge potential and then see how much is taken out from illegal activity right now, it is frustrating to see.”

Aaron: Okay, now imagine that you have a magic wand and somebody can come in and help you. What does your magic helper look like?

Kristen: I could probably make a really long list if I’m focusing on just my manufacturing and everything! I think the next thing which we’re already thinking about that magic wand is how to get a perfectly rolled joint without having so much manual human touch to it. And like I said, we’ve really attached to that weighing problem. And we’ve seen solutions out there that you know, claim to twist and have that “perfect roll” and you don’t need to even touch it. But I think the biggest challenge there is it depends how well it’s packed. You know, you don’t want it too tight. You don’t want it too loose for that customer experience. So getting that quality, if I could wave a magic wand where I’m putting in, you know, paper on one side and out comes perfectly rolled joints, that would be my magic wand for sure. Okay, I think there’s a lot of solutions out there but to get that quality and that consumer experience that we want, I haven’t seen working practice yet.

Aaron: Okay, What’s the what’s the most frustrating thing you’re going through with the business right now?

Kristen: Again, that could be a long list! I think from a more macro-level, it’s definitely the competition with the illicit market and just how there’s not enough outlets for legal cannabis right now in the state of California. When you see the huge potential and then see how much is taken out from illegal activity right now, it is frustrating to see. We’re going to get this growth and projection of the right number of dispensary licenses and things like that are definitely a huge frustration as well as with the tax structure right now because it’s obviously contributing to people going to the illicit market.

Aaron: So what are you following in the market? And what do you want to learn more about?

Kristen: Yeah, I think that’s a great question. I think the thing I’m most excited about for the larger population isjust more research to come out about the actual attributes of the plant, or how different cannabinoids react together and can have different effects. How terpenes can affect the high, how things can be used and distantly, recreationally, etc. And really, hopefully evolve and move away from strictly some sativa, hybrid,indica classifications, and really be able to educate the consumer more about the plant so people can have a more a personal relationship to understand how cannabinoids or specific terpenes are going to give them a different effect. And again, I think that’s so interesting because it could be used for therapeutic reasons that people do consume cannabis or it could just make it a better experience for people who want to take this as an escape or a way to relax and everything. So I’m really excited because more research is going to be able to get done and we can really learn more about how all of these things interact in the body and then people can take it to a whole new experience and be more educated all around.

Aaron: Alright that’s the end of the interview Kristen! Nice chatting and meeting you!

Kristen: Alright, thanks Aaron!

Leaders in Extraction & Manufacturing: Part 2

By Aaron Green
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Cannabis extraction and manufacturing is big business in California with companies expanding brands into additional states as they grow. This is the second article in a series where we interview leaders in the California extraction and manufacturing industry from some of the biggest and most well-known brands. Click here to see Part 1.

In this week’s article we talk with Matthew Elmes, director of product development at Cannacraft. After cutting his teeth in academic and industry research, Matthew was approached by Cannacraft leadership to bring a new perspective to their product development efforts. The interview with Matthew was conducted on July 22, 2020.

Next week, we’ll interview Joaquin Rodriguez, chief operating officer at GenX BioTech. Stay tuned for more!

Aaron Green: Hi Matthew, and thank you for taking the time to chat today, I understand you have a busy schedule!

Matthew Elmes: Thanks – yeah, last week was pretty insane!

Aaron: Well, I’m happy we found a chance to put this together. Let’s start from the beginning. How did you get involved at Cannacraft?

Matthew Elmes, director of product development at Cannacraft

Matthew: I did my Ph.D in biochemistry at Stony Brook University on cannabinoid intracellular transport and metabolism. I then did a post-doc with Artelo Biosciences in endocannabinoid system modulation. While I was doing my post-doctoral research, Dennis Hunter, co-founder of Cannacraft, had learned about my work and reached out to offer me a position.

Aaron: Awesome, that’s a great feeling when people are reaching out to you! The next questions here will be focused on product development and manufacturing. What is your decision process for launching a new product?

Matthew: We do our best to anticipate what the market will want. A lot of our new product development comes from improving our current products. Things like improving stability, shelf-life and reducing bitterness. For brand-new products and technologies, we first get a lot of feedback from the marketing and sales teams and will then go into a planning session to decide what is feasible and what is not prior to moving forward.

Aaron: Do you personally get involved in manufacturing? Tell me about your process there.

Matthew: I do get involved in manufacturing. My main inputs are figuring out how much cannabis oil to use to hit a target potency around the size of a batch. This is the type of thing I do for all our beverage products like HiFi Hops, our Satori line of infused edibles, and the various gummy products sold under our brands Absolute Xtracts and Care By Design.

Aaron: Are you developing new products internally?

Matthew: For the most part we develop everything internally. We are very vertically integrated here at Cannacraft and we extract all of our oil in house. I don’t do the oil extractions myself. Most of our stuff is supercritical carbon dioxide extraction, but we have hydrocarbon and cryoethanol extraction facilities opening soon. For our gummies, we use distillate oils for the best flavor and for our droppers/vapes we use full-spectrum oils for a more sophisticated array of effects.

Aaron: In product development, what does getting stuck look like for you?

Matthew: Getting stuck happens a lot! You know, strict regulations make it challenging to source ingredients. Foods we’d like to source for a product are often too high in pesticides or heavy metals for the cannabis regulations. What’s good enough for the grocery store is very often not good enough to be compliant in the California cannabis industry. Fruits that are totally free from pesticides are hard to find. Our edibles brand Satori Chocolates actually might be the only player in the entire California cannabis industry that uses real whole fruit in our products rather than something artificial or a processed fruit paste. We actually had to source our strawberries from Italy to find ones that were both compliant in metals/pesticides and tasted good enough to meet our high standards! The same sort of challenges apply to sourcing biomass for oils.

Aaron: If you get stuck is it usually the same place? Or is it different each time?

Matthew: We’re so diversified. We have lots of different products. The process for each one can have its own issues. The problems you encounter with cannabis beverages are not the same ones that you’ll encounter with vapes, edibles, topicals or sublinguals, etc. We are one of the oldest players in the California cannabis industry (CannaCraft was founded in 2014, well before regulated recreational cannabis was a thing) so we have the advantage of working on all these issues for years longer than most of our competitors and we have largely figured out all the major ‘kinks’ already. A big part of it is also that we have assembled a great team of food scientists, chemical engineers, chemists, legal and regulatory experts, all with diverse specialties that allows us to quickly address any new ‘stucks’ and be fully confident in all of our products.

Aaron: Feel free to answer the next question however you like. What does your magic helper look like?

Matthew: I would love a magic helper! What would a magic helper look like to me? I think my magic helper is a recent undergrad with lab experience. I would have them take care of a lot of the quality and lab day to day activities. My responsibilities often make me too stuck to the computer screen where I don’t have time to get to all the experiments that I’d like to do…a trained magic helper could physically perform those experiments for me!

Aaron: OK, and now for our final question! What are you following in the market and what do you want to learn about?

Matthew: I am personally really interested in yeast grows and cannabinoid synthesis from biological organisms. We stick to only natural plant-derived cannabinoids for all our products, but it’s a new field that’s just fascinating to me. I also think that minor cannabinoids will have a bigger place in coming years. In particular I have my eye on THCV, ∆8-THC, CBG and THCP. THCP is a phytocannabinoid that was just discovered a year ago and exhibited very potent effects in preclinical models, but no one has been able to produce and purify it in appreciable amounts yet. We already manufacture and sell a ∆8-THC vape cart under our ABX brand, but for the others keep an eye out for new product announcements from us that are on the horizon.

Aaron: Well, that brings us to the end of the interview Matthew, this is all awesome feedback for the industry. Thanks so much for your time and insights into product development in the cannabis industry.

Matthew: Thanks, take care!

Why Organic Should be the Future of CBD

By Josh Epstein
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The hemp industry is rapidly growing, but it’s no secret that it suffers from a major legitimacy problem. When manufacturers choose to certify their products and processes under a third-party agency, such as the USDA, it is a way for those companies to gain credibility with new customers.

USDA LogoThe USDA’s organic certification program is a great way to increase transparency and trust with both ingredients and processes used within the hemp industry. Organic certification is a rigorous audit program to review both manufacturing facility design and production process plans with the ultimate goal of increasing supply chain sustainability.

Investing in organic certification is a smart business decision – especially in today’s competitive CBD market. A recent Bloomberg report has shown that COVID-19 has actually accelerated organic food sales in the US due to increased demand for health-conscious foods and drinks. “Sales of organic food and drinks surged 25% during the 17-week period ended June 27,” according to Nielsen Data.

Organic certification is one way to differentiate between the thousands of seemingly identical CBD products being sold in the marketplace today. From a consumer perspective, organic certification provides both supply chain transparency and increases confidence with brands and products they already love. It also provides a form of quality assurance to skeptical consumers, especially those who avidly read product labels prior to making a purchasing decision. Members of this “label reader” demographic will consistently choose organic products for the quality and transparency it provides with pure and natural ingredients.

Not only does certification support ethical practices, it’s also good for business. According to the USDA, “Food labeling can be confusing and misleading, which is why certified organic is an important choice for consumers. Consumers are willing to pay a premium for food that carries the USDA organic seal, or that contains organic ingredients.”

Organic farming and production processes significantly contribute to increasing sustainability within the CBD industry. In general, organic farming is a growing practice for farmers across the US. According to the Pew Research Center, “There were more than 14,000 certified organic farms in the United States in 2016, according to the latest available data from the U.S. Department of Agriculture’s National Agricultural Statistics Service. This represents a 56% increase from 2011, the earliest comparable year.” The USDA has found that organic production practices can improve water quality, conserve energy, increase biodiversity and contribute to soil health. In terms of organic farming, soil ecology and water quality are both protected by farmers committing to working within regulated guidelines.

Organic certification ensures transparency and trust with a consumer-friendly approach to ingredient products. This comes on the heels of research showing that the CBD market lacks credibility. Organic CBD should be the next step all brands should take to ensure they’re adapting to changing consumer preferences.

The Brand Marketing Byte

The Hottest U.S. Cannabis Retail Brands Right Now

By Cannabis Industry Journal Staff
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The Brand Marketing Byte showcases highlights from Pioneer Intelligence’s Cannabis Brand Marketing Snapshots, featuring data-led case studies covering marketing and business development activities of U.S. licensed cannabis companies.

In this week’s Byte, we’re taking a look at the hottest retail U.S. cannabis brands right now. Using a scoring methodology that factors in a wide variety of data sets, Pioneer’s algorithm tracks brand awareness, audience growth and engagement. Using more than 80,000 relevant data points per week, they analyze business activity across social media, earned media and web-related activities.

The brands listed below have the strongest marketing performance indicators, according to Pioneer Intelligence, which includes web activity. Here are a few insights that explain why some of these companies made the cut:

  1. Cookies comes in at the eighth spot on July’s list. The brand does a lot of promotional content on their business development activity, which helps them make the news almost every week. This time around, they announced the debut of a new chain of Sativa-focused dispensaries under the brand name Lemonnade.
  2. Terrapin Care Station took the fifteenth spot in July’s list. Terrapin made headlines this month with their expansion in Michigan. Their newest brick-and-mortar location is the first medical cultivation facility to open in Grand Rapids, Michigan.
  3. Surterra Wellness had a podium finish in July, becoming the third hottest U.S. cannabis retail brand. Back in early July, they received a lot of press for launching its line of tinctures in Texas.

Here are the top 15 hottest U.S. cannabis retail brands for July 2020:

  1. Viola
  2. Stiiizy
  3. Surterra Wellness
  4. Dosist
  5. Grassroots
  6. GrowHealthy
  7. Liberty
  8. Cookies
  9. Serra
  10. gLeaf
  11. Caliva
  12. Sunday Goods
  13. Harvest
  14. Connected Cannabis Co.
  15. Terrapin Care Station
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Need to Improve Your Cannabis Initiatives? Consider Marker-based Augmented Reality

By Amanda Byrd
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Augmented Reality (AR) used to be something us mere humans only dreamt about. Now, AR is the norm and is seen in thousands of apps that people use every day. In fact, the forecast for the AR market is projected to reach up to $75 billion in revenue by 2023.

This is largely in part due to the fact that many smartphone apps now use AR as their default engagement method. And, with more people than ever using their smartphones to shop, the opportunity to engage through AR is easier than ever.

To give you a better idea of just how regularly we engage with AR, think about the popular apps Snapchat and Waze. Both apps utilize AR in some way – Snapchat uses AR to create the app’s infamous filters, and Waze uses AR to offer pop-up coupons and other promos based on the user’s location.

Another popular type of AR is marker-based AR. This form of AR is when a mobile app lets users scan the “marker” or image for a rendered interaction. Marker-based AR can be especially useful to cannabis businesses and offers a relatively low price point and easy execution.

Here are just a few ways marker-based AR can revamp your cannabis business and take you to the next level.

Education

The canna-curious are becoming one of the largest audiences in relation to the sustained growth of the cannabis industry, and it’s more important than ever to provide valuable information to this demographic to encourage their purchasing decision. Considering the fact that 65% of the world is comprised of visual learners, showing a video will have a far greater impact compared to talking them through a product.

By utilizing marker-based AR, a budtender can quickly activate video content from packaging or marketing material to demonstrate how a product works and its most important features. This provides an easy and effective way to quickly educate customers and entice them to make a purchase. 

Engagement

Connecting with customers is more important than ever thanks to the fragmented distribution system in the cannabis industry. Capturing customer information and building relationships is crucial to a brand’s longevity.

AR can support two aspects of the customer journey: in-store and post purchase. Fifty-five percent of shoppers use online videos while they’re in the store making a purchase, and eight out of ten people are more likely to purchase after viewing a brand video.

An AR app that provides customers with support during and after their purchases not only encourages sales but also provides brands with the opportunity to engage with push-notifications and direct marketing, which ultimately encourages additional product purchases. With more people than ever using their smartphones to shop, the opportunity to engage through AR is easier than ever.

Experience

The experience a consumer has with your brand can make or break their brand loyalty. As the Chief Marketing Officer for Philter Labs, Inc., I’m constantly looking for authentic ways to connect with our customers.

We recently partnered with Daily High Club, a monthly subscription box that offers custom glass pieces and must-have smoking accessories inspired by cannabis influencers. For June, Daily High Club featured two fan-favorite influencers: MacDizzle420 and Koala Puffs.

Using marker-based AR, we activated a video montage featuring the influencers that could be viewed directly from their custom piece of glassware. Subscribers were able to engage with the influencers while enjoying the glassware which added a new element to the experience that was both engaging and immersive in a way that was never possible before.

At PHILTER, we’re committed to continue using AR to supplement our marketing strategies. As a proponent of the technology, I truly believe that as brands work to differentiate themselves in the space, leaving a lasting impression will be the catalyst for brands to thrive and grow in an increasingly competitive market while also directly impacting a customer’s lifetime value.

The Brand Marketing Byte

The Hottest U.S. Cannabis Brands Right Now

By Cannabis Industry Journal Staff
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The Brand Marketing Byte showcases highlights from Pioneer Intelligence’s Cannabis Brand Marketing Snapshots, featuring data-led case studies covering marketing and business development activities of U.S. licensed cannabis companies.

In this week’s Byte, we’re taking a look at the hottest non-retail U.S. cannabis brands right now. Using a scoring methodology that factors in a wide variety of data sets, Pioneer’s algorithm tracks brand awareness, audience growth and engagement. Using more than 80,000 relevant data points per week, they analyze business activity across social media, earned media and web-related activities.

Keep in mind though, these brands are not the best in class or the strongest selling. The brands listed below have the strongest marketing performance and web activity, for better or worse. Here are a few insights that explain why some of these companies appear on the list:

  1. Curaleaf closed their acquisition of Grassroots. They also own Select, which is one of the largest wholesale brands in the United States. The official completion of Curaleaf acquiring Grassroots makes them the world’s largest cannabis company by revenue.
  2. Ignite Brands, founded by Instagram playboy and controversial figure Dan Bilzerian, made headlines for all the wrong reasons in early July. The company lost $50 million last year and is still hemorrhaging money. News stories in early July detail his lavish lifestyle funded by the company, including paying $2.4 million in rent per year and paying for dozens of models to travel with him, among other absurd expenses.
  3. Tyson Ranch: The cannabis brand owned by Mike Tyson, generated considerable web activity due to some press the boxer received recently. Tyson announced that he is coming back to boxing, stepping back in the ring to fight Roy Jones Jr. in September.
  4. Baked Bros, an edibles company based in Arizona, grew its social media outreach considerably in the month of July. Through a giveaway contest on Instagram, the company generated 3,584 comments on one post alone. That kind of activity directly increases their audience reach, thus boosting their marketing performance.

Without further ado, here are the top 15 hottest U.S. cannabis brands for July 2020:

  1. Kiva Confections
  2. Wyld
  3. Select
  4. Rove
  5. Ignite
  6. Papa & Barkley
  7. Cresco Labs
  8. Old Pal
  9. Lowell Herb Co
  10. Coda Signature
  11. Tyson Ranch
  12. Baked Bros
  13. 1906
  14. Bloom Farms
  15. Kush Queen

Accelerate Your Business Growth with Great Product Packaging

By Ashlee Brayfield
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The cannabis industry is booming. Just the medical segment of the industry is expected to generate $22 billion in the next four years.

Today, 36 of the 50 states allow patients to use medical cannabis with a prescription. But there’s a lot of competition in the cannabis industry. To succeed, you must stand out from the rest with custom branded packaging for your cannabis and CBD offerings.

In fact, some of the most successful companies in the industry have built multi-billion dollar businesses based on a strong brand identity, including compelling packaging design for their cannabis and CBD products.

Here’s what you should keep in mind when designing packaging for your cannabis or CBD products:

Cannabis packaging should attract your target customers

Compelling and high-quality product packaging plays a big role in a customer choosing one cannabis or CBD product over another.

But, before you can create packaging solutions for your cannabis and CBD products, you must understand your target market, your prospective customers and the experience you want to promote.

Here are a few customer profiles for you to consider:

Luxury cannabis and CBD customers

A product is considered a luxury when the brand status is elevated in the eyes of the customer.

Luxury clients expect top quality products and packaging. And, as far as most customers are concerned, if a product is perceived as better than others – it is.

To aid in this perception, packaging options for premium products should be high quality, clean and minimal or luxe, and over-the-top.

Just some of the many CBD products on the market today.

And, the packaging should always deliver on the implied promises defined by the manufacturer or dispensary. In fact, if you want to start a cannabis dispensary, you should be thinking about the overall experience for your customers and how the products and packaging offered in your dispensary will stand out from others.

When designing packaging options for customers looking for luxury cannabis and CBD products, be sure to consider:

  1. Quality: Luxury consumers expect high-value, designer packaging that functions impeccably.
  2. Sense: Luxury product packaging should provide a heightened, tactile user-experience.
  3. Taste: Luxury product packaging should forgo the typical stereotypes associated with cannabis.

Millennial cannabis and CBD customers

Millennials are drawn to authenticity. They’re burnt out on traditional advertising, coercive marketing and carefully cultivated facades.

But they’re open to trendy design, and unique product uses and experiences. And, they’re generally receptive to following celebrity and influencer endorsements from people they perceive to have values that align with their own.

When designing packaging for Millennials, be sure to consider:

  1. Simplicity: Minimal, unadorned custom branded packaging appears authentic and trustworthy. This type of packaging represents the product within, without frills or facades.
  2. Sustainability: Millennials tend to value environmental consciousness. They value sustainable packaging that offers alternatives to plastics. You’ll get extra points if the packaging is made from renewable or plant-based materials.
  3. Limited Edition: Millennials want something not everyone can have. This is why scarcity marketing via special edition products is wildly popular.

Customers looking for relief

All medical cannabis customers have a medical need for cannabis and CBD products. A recent study found that approximately two-thirds of medical cannabis patients define chronic pain as their chief reason for treatment.

Patients looking for pain relief for medical issues will be drawn to custom branded packaging that promises what they desire, without making unsubstantiated health claims. So, an emphasis on the efficacy of your product and the relief they will enjoy will be very persuasive for that audience.

When designing packaging for customers looking for relief, be sure to consider:

  1. Medical symbols: Packaging design should make it clear that your product delivers health benefits. Some brands choose to do this through logos pairing cannabis leaves with medical symbols. But, with so many medical cannabis brands hitting the market, that concept will be quickly played out and overdone; making it hard for your brand to stand out. So, think of other ways you can convey your product’s medical value to set your brand apart.
  2. Text: Use clear, concise copy describing your product and its benefits. Pain relief should be a focal point of the package messaging.
  3. Simple design: Clean package graphics and labels with ample white space will ensure that consumers can read the product packaging and find the necessary information with ease.

Cannabis packaging should inform

The best custom branded packaging design successfully balances design and information. Custom packaging for any product must include basic product information on a custom printed label – preferably in a design that makes your product look appealing.

Effective packaging design can be simple

The overall design is an important element in the success of your products. As we emphasized in our guide on how to start a business, a strong brand identity is more important today than it has ever been.

But, medical cannabis packaging carries a heavier informational burden. Guidelines, which vary state by state, require that your packaging must include dosing information and instructions for safe use, as well as batch numbers and expiration details.

For reference, here is our handy content checklist for cannabis packaging. It is also important to be sure your packaging solutions meet state laws. If you already have packaging for your cannabis and CBD products but are struggling to increase sales, perhaps it’s time to consider rebranding your company and your packaging.

Cannabis packaging should protect the product

When choosing cannabis packaging materials, consider both appearance and function.

The best marketing and package graphics in the world won’t hold much value if the product inside isn’t properly protected.

Child-resistant packaging can look aesthetically pleasing with the right design

Keep the following protection guidelines in mind when developing your custom packaging:

  1. Proper seal: Packaging for products that are not single-use must be resealable and generally should be smell proof. Containers with lids, adhesive closures, ziplock packaging and boxes with interlocking closures are all options – which is right for your product?
  2. Child safety: Packaging must be difficult for children to open – it must be child-resistant (such as pop-top bottles that require some dexterity to open). Packages must adhere to the Poison Prevention Packaging Act.
  3. Tamper evident: Much like over-the-counter drugs, medical cannabis packaging must be designed in such a way that it is evident if the package has been tampered with.
  4. Sturdy materials: Select packaging that is sturdy enough to protect the product inside. Different products will present differing packaging requirements based on the level of protection they require.
  5. Edibles and beverages: States laws involving medical cannabis and consumable products are not created equal. In the states that do allow edibles and infused beverages, the packaging must be opaque.

With all products, it’s important to remember that the package is the first thing people will see. Great packaging design elevates your product and tells a story about who you are as a company.

But medical cannabis packaging must also work to build trust and confidence in the efficacy of your product. Use these strategies to create the best packaging for your product and cannabis customers will buy over and over again.

Advertising a Cannabis Business Through the Pandemic

By Brett Konen
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For a long time, cannabis marketing didn’t exist. Then suddenly, it did. Fast forward a few years, and this nascent vertical within the modern marketing sphere remains a unique tangle of federal restrictions, state regulations, platform-specific policies and gray-area confusion, complicated by the sudden classification of businesses within it as “essential.”

So, how do today’s cannabis business owners create a marketing strategy that works in 2020? Below, we take a look at how cannabis marketing has evolved over the last few months before diving into one example of a Seattle-area cannabis retailer that’s risen to the challenge, evolving their marketing strategy quickly and successfully to capture an influx of new customers during COVID-19.

Welcome to the Cannabis Industry’s New Normal

The fact that COVID-19 has fully dominated marketing news, along with every other form of coverage, since its inception goes to show just how much it’s changed things. Multinational corporations have paused their entire ad spends; contracts have been backed out of; multi-year marketing plans have been torn up and rewritten, sometimes more than once. Those who were hoping to get back to their previous initiatives within a month or two have seen the error of their ways—and we’re still (though it doesn’t feel like it) less than half a year in.

The biggest change brought on by COVID has been a shift en masse to all things digital. Whereas before most companies met in person, they now meet over Zoom. Thousand-person conferences have become webinars and virtual networking events, while brand activations are now free trial promo codes. Along the way, traditional marketing methods have increasingly been replaced by their digital counterparts. Today, marketers need to meet consumers where they are, and where they are is at home and online.

In most industries, this shift to digital has been happening for many years already. Digital marketing and advertising methods are highly measurable, instantly adjustable and capable of reaching target audiences more directly and efficiently than traditional media. Even before the pandemic hit, cannabis was already playing marketing catchup: For example, while most industries have been using billboards since closer to their inception in the 1830s, the first cannabis billboards post-legalization only cropped up in 2014.

The shift to digital advertising in the cannabis industry has long been stalled by Facebook and Google, both of which reject all cannabis ads and even most CBD ads regardless of the location and legality of the products. Therefore, cannabis brands have evolved their own unique non-digital marketing playbooks. In addition to the prevalence of print ads, physical billboards, sponsored events and in-person pop-ups, many cannabis brands have come to rely heavily on a tactic unique to the industry: budtender education. In the meantime, most cannabis marketers haven’t been leveraging their digital options in full (or, frequently, at all).

Due in large part to COVID-19, the need for this to change has come into sharp relief. In addition to decreased reach for print publications and out-of-home ad space with fewer people spending time in public, events are no longer feasible, and customers are no longer having leisurely chats with their budtenders as they weigh the benefits and drawbacks of different products for sale. Most cannabis stores are minimizing their in-store visitors as well as offering online ordering, curbside pickup services or cannabis delivery. In April Margaret Jackson, a journalist at Marijuana Business Daily, reported on this trend:

“Many marijuana brands have relied on in-store pop-ups and educating budtenders about their products to reach consumers. But as cannabis customers increasingly order products online for delivery or pickup—and with the expectation that these habits will persist after the coronavirus pandemic is under control—marijuana brands should consider more direct ways to reach their audience to ensure sales stay strong, according to industry officials.”

Marketing Isn’t the Budtender’s Job

We don’t know how long COVID-19 may continue unchecked, but as Jackson notes, these shifts in behavior are likely to outlive the circumstances that first necessitated them. Since online shopping, pickup and delivery have quickly become standard in 2020 cannabis sales, a huge marketing gap has been left between consumers—including an influx of new ones—and the brands they’d probably be buying if those brands had been marketing to them before the pandemic.

“I’ve been saying for a long time that the brands we work with need to start marketing themselves directly to consumers,” says Anna Shreeve, managing partner at The Bakeréé. “It’s not the budtender’s job to do that legwork.”

The Bakeréé operates two retail locations in Seattle, one on the north end of the city and the other on the south. Since opening their first store, the team has focused on sourcing products of the highest possible quality at every price point, as well as emphasizing a wide variety of high-CBD options. Shreeve says the store has worked hard over the years to build a knowledgeable clientele that comes in specifically to find new and interesting products. Still, she notes that many customers go directly to the budtenders for suggestions.

Steve Schechterle, director of marketing at Washington’s Fairwinds, which sells both cannabis and CBD products, recently noted the company’s focus on budtender outreach and training in a webinar hosted by the Cannabis Marketing Association. “It’s where we’ve seen the biggest payoff by far,” said Schechterle. “Since we first noticed this, we’ve created an entire program around training Fairwinds-certified budtenders.”

Fairwinds isn’t alone: Many companies come in to meet dispensary employees, offer swag, answer questionsand show off their newest products. That way, when a customer comes in looking for a recommendation, those products are top of mind. For now, that option is largely gone, and Fairwinds (along with a few other early adopters of digital advertising in the industry) has begun advertising online to drive increased consumer demand and avoid having to rely primarily on budtenders in the long term.

Pivoting a Dispensary to Digital Ads

In the past, The Bakeréé—like many retailers in adult-use states—leaned heavily on event-based marketing, including New Years parties, in-store artist showcases, festival sponsorships and more. While they have used digital advertising for their own business, ad campaigns have primarily supported in-person events, such as through ticket sales for the New Years parties. This year, Shreeve had planned to go big on marketing for 4/20, putting together her own concert lineup that included up-and-coming hip-hop names from across the US. She was about to start promoting that concert with digital ads when the pandemic hit.

This ad for The Bakeréé appeared in The New York Times.

By early April, it had become clear that the 4/20 concert was not happening. Shreeve had already lost $20,000 in deposits on artists and the venue, which reduced the budget available for alternate marketing ideas. She decided to run a digital advertising campaign with a single display ad: The goal was to promote online ordering for curbside pickup.

While display ads are not generally known for their conversion rates, they’re a common place to start advertising cannabis due to their price point (impressions generally cost fractions of a cent) and ease of creation. Display ads can be run using programmatic ad tech, the current standard in digital advertising, which accounts for 70% of ads bought and sold in 2020. In most other industries, search and social ads through Google and Facebook are the go-to methods for digital advertising, but since both are closed to cannabis brands, programmatic is the best way for cannabis businesses to advertise digitally.

Starting with one display ad concept, and then adding a second, The Bakeréé ran their ads on a wide variety of mainstream websites, using demographic and geographic targeting to reach potential customers within a specific radius of each store. They also advertised to customers living near the closest competing dispensaries. The ads themselves focused primarily on promoting the ease of curbside pickup as well as offering a 10% discount on all online orders. Sales began to rise almost immediately.

Though April’s increase may have been due in part to 4/20’s impact on sales and a widespread stock-up mindset in the first month of the pandemic, The Bakeréé saw back-to-back-to-back months of YOY revenue growth at both their locations in April, May and June. From display ads on desktop they added mobile to the campaign, and in June added two 30-second video ads to build on the momentum generated by display.

Overall, The Bakeréé has seen a 13-fold return on ad spend, driving $153,000 in revenue from digital ads in the campaign’s first 90 days. The display ads have generated widespread use of the online ordering system, increased basket size to an average of $95.47, and grown online ordering revenue by 389%.

In the second half of the year, Shreeve says she hopes to expand the campaign to include connected TV and digital audio ads, particularly to support the launch of a new website with updated online ordering capabilities in Q3. And she still hopes to see more of the cannabis brands sold by The Bakeréé start advertising on their own, too: To that end, Shreeve is considering working with vendors to run co-branded advertisements that may help them adopt their own digital marketing initiatives sooner and drive more sales for everyone involved.


Suggested Readings

Case Study: The Bakeréé (PrograMetrix)

Programmatic Advertising: A Close Look at Cannabis (IAB)

White Paper: Digital Ads for Cannabis & CBD (PrograMetrix