Tag Archives: marketing

Marguerite Arnold

The Great Cannabis Branding Conundrum in Europe

By Marguerite Arnold
2 Comments
Marguerite Arnold

Cannabranding is buzzy. In the United States and in Canada, it is a vertical that is developing fast along with the multi-billion dollar legitimizing cannabis market. In both the United States and Canada, digital marketing to promote brands is a hot topic.

Social media has firmly rolled over traditional advertising barriers even as it still remains a landmine. And if there were ever a “fun” brand to be associated with, cannabis carries a lot of plusses. Starting with the rapidly fading stigma. According to Adweek, there were 170 advertising and marketing agencies picking up national cannabis business in the United States, with additional firms serving smaller firms or markets at the beginning of the year.

Yet battles that should be dated with the year 2017 in the mirror, are still raging and underway even in these jurisdictions. No matter what or where, advertising remains complicated. Beyond the American hemisphere, the issue of branding is a still-slumbering giant that may yet awake in the second part of the next decade. For the most part, that will have to await the advent of recreational use, at least within Europe.Are there successful brands already established in the world of cannabis? Of course.

How brands enter the market in the EU in fact, based on their social media and internet influence elsewhere, is very much a part of that discussion. So far in Europe, there has been no federal recreational reform. Medical use is still in front of legislatures. As a result, that means that more traditional social media efforts in particular, are verboten when launched in country.

With foreign firms now entering the EU market, the big question is, can such firms establish a brand presence here (or for any of their products?) Or will that too, be launched from abroad?

And how exactly will that fare in Europe, particularly in places like Germany, where the overwhelming pressure is on to treat cannabis just like another narcotic? And in particular, a generic drug.

A Brief History of Advertising in Cannabis

Hard as it is to believe, just four years ago, there was no legal, functioning recreational market anywhere. Weedmaps and Leafly were the only game in town when it came to advertising, along with growing free press coverage, in particular for small companies who were starting to establish market presence in the legalizing cannabis business. In fact Weedmaps and Leafly can be effectively credited, certainly in the United States, with putting cannabis advertising, along with dispensaries and prescribing doctors, on the map.

The impact of a California media industry on this issue, especially with state recreational legalization imminent, cannot be underestimated. However, these days, it is not the only game in town.

Fast forward to 2017, and the world of cannabranding has exploded, no surprise, in the world of social media. “Bud porn” proliferates on Instagram. In fact, an Instagram account, along with YouTube videos, Facebook posts and Twitter pictures are derigeur for pot companies these days as much as they are for anyone else. Free media is still a force.

However even here, the rules and enforcement of the same, at least in the United States, are still shadowed with uncertainty. Federal Schedule I status means that technically, even the big social media giants are in the same boat as traditional advertising mediums (like print or even internet-based media). Section 843 of the Controlled Substances Act specifically prohibits “communications facilities” from advertising Schedule I drugs. However the internet has never really been brought under FCC guidelines – and on many fronts. See “bud porn”, as the first example. Cannabis “advertising” such as it has clearly developed, is absolutely another one.

And into this gap have poured cannabis-branding initiatives galore. One of the most corporately ambitious so far? Netflix, with not only pot-branded entertainment, but its own brands of cannabis. It is far from the only one. Google Adwords also changed its policies with regard to medical advertising this year. The advent of a recreational market in California will absolutely drive this issue globally. But beyond California state borders, how will more local laws be enforced? And by whom? Is anyone at the FCC or Jeff Sessions’ Justice Department considering the national impact of any cannabis branding launched in California, for example? And where would they start? Would corporate advertising that is present at national conferences be targeted too? Along with the growing cannabisHow will such firms establish branding in a world so totally off-limits to “brand” advertising? conference economy itself which is already multi-state? The situation is already slippery. Abroad, could or would BfArM, the German federal agency overseeing the regulation of narcotic drugs (including cannabis), bring suit against Facebook for distributing California-sourced advertising for an Australian firm now doing business in Europe?

Clearly, there are landmines everywhere one looks. And not just for the big guys. The path is still littered with issues and problems for smaller, U.S.-based initiatives. Accounts can be blocked arbitrarily on social media and have been, such as on Facebook. In sum, however, it is also very clear that the preponderance of a tide is shifting. The industry as well as internet-based branding, is winning.

Especially as recreational reform blooms in Canada and California.

Advertising, in a digital world, has no borders. And cannabis branding is about to test exactly how accurate that mantra is. Or at least how much the location of one’s server counts. And it may be that because of this issue, the entire enchilada is about to jump the shark, if not a few international borders.

The Awakening Canadian Giant

North of the American border, the great Canadian recreational cannabis experiment is more than just in the offing. The train is puffing with steam at the station. The impact of a federally legal, recreational market that Canada will become as of next summer, cannot be underestimated from the advertising and branding front.

First, it means that Canadian companies will be able to advertise and promote their brands to at least a domestic audience. Granted, they will undoubtedly face the same issues as liquor companies in some ways. But promoting specific brands and labels has already hit the Canadian social media universe. See the efforts of all the major pot-producing companies with domestic server and corporate presence.

In turn, this has further opened another question. If digital and social media has no boundaries, what does that mean for the rest of the world? Particularly those countries now also watching the larger Canadian corporates establish both growing and distribution presence within their borders, and with strict advertising bans on cannabis domestically. That includes bans on advertising marijuana as medicine.

The Most Compelling Cannabis Brand Remains Legalization

Are there successful brands already established in the world of cannabis? Of course. Think only of the many celebrity-backed brands (even for medical) that you have probably heard of in the last few years. There are likely to be more.

However the reality is that in many jurisdictions, starting with Germany, such branding theoretically at least, stops at the border. The many firms who are establishing presence here on the distribution and potentially cultivation side, do nothing more than promote their company names at industry events.

How will such firms establish branding in a world so totally off-limits to “brand” advertising?

For now, one of those answers is to establish a presence as a serious pharmaceutical company. Another of course, is to become more vocal over the need for further reform and patient access. So far, that issue has remained one mostly vocalized by reform groups on the ground. That could change, particularly with further delays in implementing medical programs in Europe. Celebrity-backed appearances in media on this issue go far.

And for the meantime? Branding specialists will have to hope that advertising campaigns developed off-shore begin to meet targeted European patient groups.

Even if the first message is the concept of cannabis as legitimate medicine.

FDAlogo

FDA Issues Warning To CBD Companies

By Aaron G. Biros
No Comments
FDAlogo

On November 1st, the U.S. Food and Drug Administration (FDA) published a press release addressing warning letters issued to four companies. The warning letters, sent to companies marketing cannabidiol (CBD) products with therapeutic claims, cites unsubstantiated claims about their products’ ability to treat or cure cancer and other diseases.

A snippet of the warning letter issued to Greenroads

According to the press release, the four companies that received warning letters are Greenroads Health, Natural Alchemist, That’s Natural! Marketing and Consulting, and Stanley Brothers Social Enterprises LLC. The press release called their marketing campaigns “deceptive” for “unproven treatments.” Here is the letter they sent to Greenroads Health.

“As part of the U.S. Food and Drug Administration’s ongoing efforts to protect consumers from health fraud, the agency today issued warning letters to four companies illegally selling products online that claim to prevent, diagnose, treat, or cure cancer without evidence to support these outcomes,” reads the FDA statement. “Selling these unapproved products with unsubstantiated therapeutic claims is not only a violation of the Federal Food, Drug and Cosmetic Act, but also can put patients at risk as these products have not been proven to be safe or effective.”

According to the press release, the FDA has issued ninety warning letters in the past ten years, with around twelve this year, to companies making fraudulent claims about cancer therapies. Here are some examples of claims made by companies that the FDA took issue with:

  • “Combats tumor and cancer cells;”
  • “CBD makes cancer cells commit ‘suicide’ without killing other cells;”
  • “CBD … [has] anti-proliferative properties that inhibit cell division and growth in certain types of cancer, not allowing the tumor to grow;” and
  • “Non-psychoactive cannabinoids like CBD (cannabidiol) may be effective in treating tumors from cancer – including breast cancer.”

“Substances that contain components of marijuana will be treated like any other products that make unproven claims to shrink cancer tumors,” says FDA Commissioner Scott Gottlieb, M.D. “We don’t let companies market products that deliberately prey on sick people with baseless claims that their substance can shrink or cure cancer and we’re not going to look the other way on enforcing these principles when it comes to marijuana-containing products. There are a growing number of effective therapies for many cancers. When people are allowed to illegally market agents that deliver no established benefit they may steer patients away from products that have proven, anti-tumor effects that could extend lives.”

 

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.

Massachusetts Lawmakers Reach Compromise on Cannabis Bill

By Aaron G. Biros
No Comments

On Election Day last year, voters in Massachusetts approved a measure to legalize recreational cannabis. With recreational sales beginning in July of 2018, lawmakers have tried to get a bill through the state legislature to settle on, among other things, a tax rate and regulatory framework.

On Wednesday, multiple news outlets reported that the legislature has reached a compromise on a bill that would change the measure that voters passed to allow for lawmakers to implement higher taxes, a strategy on local bans and a regulatory framework, reports The Boston Globe.

mpp logo
MPP logo for the Regulate Marijuana Like Alcohol Campaign in Massachusetts

In a statement to supporters, Matt Schweich, director of state campaigns at Marijuana Policy Project (MPP), the biggest changes are in local control and taxation. “After weeks of persistent advocacy from Massachusetts residents, the Senate and House have reached a compromise that largely respects the will of the people,” says Schweich. “The legislation adjusts the local control policy, allowing local government officials in towns that voted “no” on the 2016 ballot initiative to ban marijuana businesses until December 2019. For towns that voted “yes” in 2016, any bans must be placed on a local ballot for voters to approve.” Therefore if a town wants to ban cannabis sales, they need to bring it to a vote for the people to decide. 72% of the population voted in favor of the ballot initiative. “The maximum tax rate — which depends on whether towns adopt optional local taxes — will increase from 12% to 20%,” says Schweich. “Under the bill, the state tax will be 17%, and the local option will be 3%.” A major push behind increasing the tax rates concerned lawmakers’ worries that the original 12% tax rate would not cover regulatory costs and government expenditures on the industry.

Boston, MA
Photo: Trenton Kelley, Flickr

The ballot initiative created the Cannabis Control Commission, the regulatory body overseeing the industry, with three board members. That agency will remain in the new bill, just with five board members that will write the rules on things like marketing, safety, fines and penalties and fair business practices.

Schweich says the MPP helped orchestrate over 1,000 calls to legislators, urging them to reject the House’s version of the bill, which some have called draconian. “The bill isn’t perfect, and we preferred the original language of the ballot initiative,” says Schweich. “However, given how problematic the House bill was, we are satisfied with the final compromise.”

The bill is expected to pass votes in both the House and Senate on Thursday and Governor Charlie Baker is expected to sign the bill that same day.

Marketing Automation for Dispensaries

By Arnab Mitra
4 Comments

What is Marketing Automation?

Typically when most people think of marketing automation, they imagine a platform that automates activities such as lead scoring, customer segmentation, cross-selling and campaign management. Well that type of automation is primarily for B2B companies, who are looking to reach a mass audience at once. Plus, B2B marketing automation platforms usually only provide one channel, which is email, to reach their customers.

B2C companies are looking to grow their brand and reach their customers through personalized messages. A B2C marketing automation platform helps businesses understand where each individual customer is in their journey and determine what actions need to be taken to move each customer forward. Plus they get the option of multiple channels to reach their customer, including email, text message, IM, push notifications and more.

Why is Marketing Automation Important for Dispensaries?

The first obvious reason why marketing automation is important is for the simple fact that reaching your customers is now automated; you don’t have to send out messages yourself. Thus helping save time and scale your reach at once. But marketing automation is much more important than the simple reason of saving time and scaling your reach. At SailPlay, we believe the automation of these activities helps dispensaries be able to deliver the right message at the right time to the right customer, helping the long-term success of the business.

For example, knowing where each of your customers are in their journey helps you to not only segment them into different groups, but also create specific campaigns per group. Through marketing automation you will know if you have a new lead, repeat customer and loyal customer, helping you tailor a campaign for each group.

New Lead Campaign

Each time a new lead visits your dispensary or your website, run an email or SMS campaign to provide them with a discount code to entice them to make a purchase. And after their first purchase, send a communication one day later to ask them about their experience and the product purchased.

Repeat Customer Campaign

For any repeat customers, you know which products they have purchased in the past. Run campaigns that are specific to the product groups they have purchased before. These customers are more likely to engage in your campaign if they are interested in the product.

Loyal Customer Campaign

For loyal customers, run exclusive campaigns based on their specific past purchases. For example, if John prefers to purchases edibles, run a campaign for John about an exclusive offer on a new edible.

The more personalized your campaigns are for your customers, the more engagement you can expect. According to Experian, there is a 26% increase in engagement with a personalized campaign when compared to a non-personalized campaign.

Plus with more engagement, your chances of increased sales greatly rise. According to a VB Insight study, 80% of businesses that use marketing automation have seen an increase in leads, with the majority being quality leads.

What Dispensaries Should Focus On For Marketing Automation 

With there being so many marketing automation software companies to choose from, we thought we would help you focus on a couple of key features.

B2C Marketing Automation

Be sure to choose a B2C marketing automation platform. When you search for “Marketing Automation” through Google or any search engine, you will find many B2B marketing automation platforms. B2B marketing automation platforms are different because B2B platforms are interested in bulk marketing and messaging, while B2C platforms are focused on the personalization and customer journey. And as an FYI, some B2B platforms will say they have a B2C platform as well, but they will be focusing most of their features to B2B since there are more B2B companies using marketing automation.

Selecting More Than Just an Email Service Provider

If your goal is to just send out emails, then choosing an email service provider is the way for you to go. But if your goal is to go beyond that, then choose a B2C marketing automation platform. With a B2C marketing automation platform you should expect the following:

  • Loyalty Platform: Through a loyalty platform, you can build out a customer loyalty program that will help increase customer retention. Through the loyalty platform, you can create a rewards system, providing your customers for points for various actions, including purchases and social media actions.
  • Communication Platform: Within the communication platform, you can create powerful email, SMS, IM and push notification campaigns to reach each customer with the right message at the right time.
  • CRM Platform: The CRM platform helps you manage your entire customer list from one place. Through the CRM you can create customer segments, dive deep into each customer and more.
  • Analytics Platform: Within the Analytics platform, you can analyze your clients’ actions, their purchases, and socio-demographic data. Plus you can measure the effectiveness of your loyalty program, marketing campaigns, promotions and more to improve future results.

Before it gets too saturated, dispensaries need to invest in marketing automation. As stated, marketing automation can help your dispensary create a personalized experience for each of your customers, leading to higher engagement and ideally more sales.

Protecting Your Innovative Cannabis Strains With a Strong Intellectual Property Strategy: Part 3 – Trademark Protection for New Cannabis Strains

By Dr. Travis Bliss
No Comments

In the first two installments of this three-part series, we explored the reasons why cannabis breeders and growers should adopt a strong IP strategy and discussed the types of patent protection that they should consider. In this final installment, we examine trademark protection for new cannabis varieties and the unique trademark issues currently facing the cannabis industry.

What is a trademark and what does it really get me?

A trademark is a visual feature of some sort, such as a word, phrase, or symbol, which is used to identify a company’s goods and to distinguish those goods from the goods of a competitor. Like a patent, a trademark is effectively an exclusionary right, meaning that it gives the owner the right to exclude others from using the same mark, or a mark that is confusingly similar, in connection with the same type of goods. The test for determining whether a competitor’s mark infringes upon your trademark is whether there is a likelihood of confusion in the mind of consumers over the source of the goods. Put another way, the test is whether a consumer is likely to be confused into believing that your competitor’s goods are actually associated with your company.

How long does this exclusionary right last? So long as certain requirements are met, a trademark can last forever. While a patent that protects a new cannabis variety will expire in 20 years, a trademark that also covers that strain can be maintained forever, which allows patents and trademarks to be used together to offer both stronger and longer lasting protection over a new cannabis variety.

How do I get a trademark?

Trademarks exist under both state and federal law. In many states, to obtain common law trademark protection, one does not need to file anything with a government entity – you simply need to use the mark (e.g., the word or logo) in connection with your company’s goods and use a “TM” in conjunction with the mark. However, the protections afforded by such a common law mark are relatively limited, so it is generally advisable to register the mark with the state and/or federal government in order to strengthen the exclusionary rights. Along the same lines, federal registration offers certain advantages over state registration, such as the right to use the mark nationwide and the right to challenge infringers of the mark in federal court.

To register a trademark, breeders and growers need to file a trademark application with the relevant government entity – the U.S. Patent and Trademark Office (USPTO) for a federal mark or various state government offices for state marks. For both state and federal trademark registrations, an applicant typically must demonstrate that 1) he/she is the first to use and register the mark for the type of goods at issue, 2) that he/she is actually using the mark in commerce or has intent to do so, and 3) that the mark is distinctive. Of these three requirements, proving distinctiveness is often the one that gives applicants the most difficulty.

A mark is “distinctive” if it is capable of identifying the source of a particular good. Because of this requirement, a brand name that is generic or merely describes the goods, such as “Large Bud Cannabis Plants,” is often less desirable because it is less distinctive and thus may be difficult to register. Conversely, a brand name that is “arbitrary” or “fanciful,” such as “Moose Foot Cannabis,” is often more distinctive and therefore may be easier to register, generally making it a more desirable choice as a brand name. This issue of distinctiveness is something that cannabis growers and breeders should keep in mind as they develop a branding strategy for their new varieties.

Unique trademark issues for the cannabis industry

Like almost every aspect in the cannabis industry, there are some unique trademark issues that breeders and growers must contend with. With regard to federal registration, the USPTO will currently not allow registration of any trademark for cannabis products that are illegal under federal law. However, that does not mean that every cannabis-related product cannot obtain any federal trademark protection. The reason for this is that a federal trademark registration is tied to specific types of goods that are being sold under the mark, so the ability to register a desired brand name will depend on what type of goods are covered by the trademark.

To that end, a mark that covers actual cannabis products (like plants or edibles) cannot currently be federally registered even if the mark does not actually include the word cannabis. For example, a breeder likely could not federally register the brand name “River’s Edge Farms” for the sale of cannabis plants and plant parts. However, a mark that covers products that are related to the cannabis industry may be allowable – even if it references cannabis –if the goods being sold under the mark are not themselves illegal under federal law. For example, “Pot Maximizer,” a trademark name for a grow light that is being sold to cannabis growers, could be federally registered since it is not illegal to sell a grow light.

Under current federal law, which prohibits the cultivation and sale of cannabis plants and their parts, a federal trademark registration is certainly not currently available for new cannabis varieties. However, this does not mean that trademark registration for new cannabis varieties is impossible. Most states with legalized cannabis will allow registration of state trademarks for cannabis products (e.g., Washington, Oregon, Colorado).

Further, since branding is a long-term strategy it is important for growers and breeders to keep the requirements for federal registration in mind when adopting a branding strategy to ensure they can obtain federal protection for their current brand names if and when cannabis becomes federally legal.

The bottom line…

Despite the fact that there are currently some unique trademark issues for cannabis growers and breeders, trademark protection can be a very valuable asset that both increases the level of protection and extends it beyond what can be obtained through a patent alone. As such, breeders and growers should adopt a branding strategy for their new varieties that attempt to maximize trademark protections for those varieties, both now and in the future.

Breeders and growers should select brand names that are sufficiently distinctive to meet the requirements of both federal and state trademarks. Right now, they will likely need to focus on state trademark rights by applying for state trademark registrations where available and by making sure that they are treating the mark as a brand name of their company (e.g., using a “TM” after their marks). However, they should also keep a close eye on the status of federal registration laws so that they can apply for federal registration of their marks when it becomes available.

Additionally, as discussed in prior articles, growers and breeders should also be seeking to maximize patent protection for their new cannabis strains so that they can use that protection in addition to trademarks to create a stronger IP position. Cannabis growers and breeders who adopt such a comprehensive strategy now could reap huge rewards down the road, especially if (or when) cannabis becomes federally legal, either at the medical or recreational level.

Legal disclaimer: The material provided in this article is for informational purposes only and not for the purpose of providing legal advice. The opinions expressed herein are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney. The provision of this information and your receipt and/or use of it (1) is not provided in the course of and does not create or constitute an attorney-client relationship, (2) is not intended as a solicitation, (3) is not intended to convey or constitute legal advice, and (4) is not a substitute for obtaining legal advice from a qualified attorney. You should not act upon any such information without first seeking qualified professional counsel on your specific matter.

Organic Cannabis Association & Ethical Cannabis Alliance Announce Merger

By Aaron G. Biros
1 Comment

The Organic Cannabis Association and Ethical Cannabis Alliance announced today they are merging into one organization, the Cannabis Certification Council (CCC), according to a press release. The new third-party certifications include “Organically Grown” and “Fairly Produced”, granting producers a seal for marketing if they achieve the certifications.

Ashley Preece, executive director of the Cannabis Certification Council

According to Ashley Preece of the Ethical Cannabis Alliance, now executive director at CCC, they plan on starting with the “Organically Grown” certification as first certification to market. “We are launching with Organically which will include robust labor standards as well as standards that go beyond [USDA] Organic,” says Preece. “The USDA Organic standard is watered down and we want to expand on proper horticulture practices so it relates directly to cannabis producers.” The process of designing that certification involves using that USDA Organic certification as a building block to draw from but not directly adopt.

“We will start by pulling from Organic and Fair Trade standards, then we will have a technical advisory committee (TAC), made up of multi-stakeholder agricultural industry and cannabis industry professionals to give input and adjust the standard accordingly,” says Preece. “From there we will have a pilot program, engaging with producers abiding by the standards’ requirements. After the pilot phase, we make final adjustments before bringing it to market.” In order to make sure their certification works across the board, Preece says they are engaging with stakeholders around the country and eventually globally. “We need to engage each different community to make sure this is applicable on a national level.” Preece also says they plan staying abreast of other standards, such as ASTM International’s, but those are geared more towards production safety. “We are looking towards more robust Organic and Fair Trade standards, and ‘cannabinizing’ them,” says Preece.

Photo courtesy of L’Eagle Services

David Bronner, a prominent advocate of drug policy reform and CEO of Dr. Bronner’s, a top-selling soap brand in the US market place, will be providing seed funding and a matching grant to the CCC. “We are committed to making socially and environmentally responsible products of the highest value, and we are excited for the CCC to begin driving that ethos in the cannabis industry,” says Bronner. “The Cannabis Certification Council (CCC), with its unique mission, is a perfect vessel for us to support our values in the cannabis space.”

Preece says the “Fairly Produced” labor certification is going to be based off of Fair Trade practices. “That will include living wages per community and taking options of ownership into consideration, including different business models where employees might have shares or partial ownership,” says Preece. “As we know, this industry has come from the illicit market, where we saw a lot of inappropriate working environments, gender relations and pay schedules. So we want to ensure that workers have contracts in place, they are treated fairly just as any other industry and we want to mitigate any strange encounters that might have seeped into this regulated market.” Founding board members include Laura Rivero of Yerba Buena Farms; Amy Andrle of L’Eagle Services Denver; Nick Richards of Dill and Dill and Vicente Sederberg; and Ben Gelt of Par, with Ashley Preece as executive director. “This is a huge step for the cannabis industry,” says Preece. “Our collaboration reflects the priority of the mission ingrained in both parties, and together we will immediately be greater than the sum of our parts.”

Going Beyond POS: Innovations in Dispensary Software

By Aaron G. Biros
No Comments

In a highly competitive market, dispensaries use wide product selections, competitive prices, rewards and loyalty programs to stay relevant and attract new customers. Many of those tools used to make the retail space more efficient require analytics to stay on top of their performance metrics.

At their SE 7th Ave location in Portland, Oregon, Cannabliss & Co. uses Baker software to better connect with their customers and track sales. According to Kevin Mahoney, manager of that dispensary, they use Baker’s software for things like their online menu, online ordering, text alerts and a rewards program.

Cannabliss & Co. SE 7th Ave location
Cannabliss & Co. SE 7th Ave location

Located in an historic firehouse built in 1913, Cannabliss & Co. was Oregon’s very first medical cannabis dispensary. Now that they offer both recreational and medical cannabis, their product inventory has expanded, their sales have grown and they have a wider customer base.

IMG_7545After using Baker’s software platform for almost a year now, Mahoney says he has seen great ROI on text alerts and the analytics. The online ordering and menu features have not only highlighted sales trends, but have made budtender-customer interactions easier. “We don’t want our budtender using the menu as a focal point of the conversation, but this allows for us to highlight particular specials or strains on our menu that gets eye attention right when the customer gets in,” says Mahoney. “Moving past the point of sale, it allows another conversation to happen organically, which keeps the customer engaged.”

On average, Baker sees conversion rates close to a 5% range per campaign. “That check in option is phenomenal; we get to see how many people actually came into the store from any given text alert,” says Mahoney. “In my mind, text alerts are preferable to email alerts; they can’t be marked as spam, it is easy to delete or opt out and takes much less time.”

Kevin Mahoney at his SE 7th Ave location
Kevin Mahoney at his SE 7th Ave location

Mahoney says the online ordering feature that Baker offers is a big selling point too. “Having an ordering service is absolutely terrific,” says Mahoney. “They can come in and out in less than five minutes with their full order by using the online ordering portal.” Mahoney says they see a real draw in this feature because it lets customers treat their dispensary like a takeout window at a restaurant.

Baker just launched a software platform designed for delivery service that a dispensary in Bend, Oregon has been using for two months now. With Portland legalizing cannabis delivery services recently, Mahoney is eyeing Baker’s software for his online ordering and delivery. “When the time comes, that is something we are very interested in pursuing.”

rsz_baker_kitchen_photo_1_of_1
Analytics allow users to track the success of campaigns

In August of 2016, Baker secured $1.6 million in seed funding, led by Former Salesforce Executive Michael Lazerow, according to a press release. “Baker has created a solution that is clean and easy to use and can help dispensary owners engage their shoppers like never before – online, mobile, social and in-store,” says Lazerow. “I witnessed first-hand how Salesforce supercharges its customers’ businesses and I’m inspired to see Baker driving the entire cannabis industry forward with this same intelligent approach.” In 18 months of business, Baker has worked with hundreds of dispensaries, helping them build better connections with over 100,000 customers. At Baker, we believe the cannabis shopping experience should be as comfortable and personalized as it has become in every other retail environment,” says Joel Milton, chief executive officer at Baker. “With expertise in cannabis, data and technology we have created an industry-specific tool that allows dispensaries and brands engage with customers and build brand loyalty through a personalized shopping experience.”

rsz_connect_sms_1
Text alerts are customizable and easy to send out

According to Eli Sklarin, director of marketing at Baker, the number one reason why patients and customers choose a dispensary is because of products on the shelf. “We originally started the platform in 2014 so people could order ahead and wouldn’t have to wait in lines at the dispensary,” says Sklarin. “In 2015, we saw more dispensaries than fast food establishments in many cities. Once inventory started to settle down, we saw a need for the dispensary to better connect with their customers.” The three core products that Baker offers are online ordering, connect SMS & email and the check in & loyalty program.

Their entire suite of software options is specific to the cannabis retail space. “Our customizable program is designed to help dispensaries catch customers and keep them coming back,” says Sklarin. “The software can give a snapshot of who their customers are, insights into the overall health of their dispensary, sales per day of the week, monthly promotions and other basic analytics that help them understand their customers.” Things like strain alerts can help retain customers, allowing dispensaries to notify certain groups of customers when products are back in stock. Whether it’s a customer who prefers a particular brand of edibles or concentrates, these software tools can help dispensaries get the right message to the right customer.

Sustainability for the Cannabis Industry, Part II: The New Cannabis Consumer

By Olivia L. Dubreuil, Esq., Brett Giddings
No Comments

Most readers ought to be well aware that the cannabis industry is rapidly growing. The Arcview Group, an Oakland-based investor network, estimates the retail and wholesale cannabis market will reach $22.8 billion by 2020. That number represents a lot of people consuming cannabis in many different ways.

The average cannabis consumer is changing. A new range of social groups is consuming cannabis-based products. From yoga diehards, to middle-aged men and women, veterans that have ‘tried everything else’ and young professionals looking for a different way to relax, the market is broadening.

This new segment of cannabis consumers are often not looking to get high- they are looking for anti-inflammatories, relaxants and ways of dealing with chronic pains and stress. For these health and wellness seekers, the last thing they want is a product dosed with pesticides, insecticides or butane residues. We can expect to see these consumers to follow broader consumption trends- specifically when it comes to a product like cannabis that people are inevitably placing in or on their bodies.

These consumers come with new sets of expectations, similar to those when they buy fruit, vegetables, coffee or chocolate. They are increasingly curious about the contents of the products they purchase- they are a large part of the reason that the sales of organic produce has ‘ballooned’. They are asking questions like: Does the product contain pesticides? Has the product been cultivated in a way that minimizes negative environmental impacts? How do we know that the supply chain quality controls are rigorous enough to ensure no one has tampered with the product? Who is growing and picking this product and how are those people being treated?

When a curious consumer enters a modern American supermarket, they are guided by a range of messages relating to the contents and supply chain that was part of making each product. Organic, non-GMO, pesticide-free, fair trade, free-range and locally produced are some of the common criteria. The more credible labels are supported by codes and procedures in which the whole supply chain is audited, monitored and approved by the certifying body according to certain standards- for example the USDA certifies organic foods.

Being a Schedule I controlled substance under federal law, cannabis is probably not going to receive USDA organic certification any time soon. However there are organizations out there that are committed to increasing the availability of cannabis grown with organic practices. Certifying bodies like Certified Kind and the Organic Cannabis Growers Society are gaining popularity among growers who see the market evolving in that direction. At the same time, businesses such as Delicious Fog (an ‘organic-focussed’ delivery service in Santa Clara County) and Harvest (an ‘organic’ dispensary in San Francisco)- are specializing in the sale of these ‘organic’ cannabis products.

Just like any sustainability issue- ensuring your cannabis product comes from a well-managed supply chain cannot be a last minute add-on. Whether a business is small, large, mature or emerging, developing a strategic approach to the diverse spread of sustainability challenges is critical.

As a cannabis business what can you do to appeal to the new cannabis consumer?

Year in Review, What’s In Store for 2016: A Q&A with Nic Easley

By Aaron G. Biros
No Comments

With 2015 coming to a close, to understand and start strategizing for the next year, we must look back on the year and gauge the industry’s progress. A lot has happened this year and there is a lot to look forward to in 2016.

Nic Easley presenting at the 2015 High Times Business Summit in Washington, D.C.
Nic Easley presenting at the 2015 High Times Business Summit in Washington, D.C.

Nic Easley, founder and CEO of Comprehensive Cannabis Consulting (3C), gave a presentation at the High Times Business Summit last week, reviewing the cannabis industry’s progress in 2015, and providing some insights on what to look for in 2016. 3C is a national cannabis and hemp consulting firm dedicated to ensuring the highest standards in large-scale, sustainable organic production and product manufacturing. Over the past eight years in Colorado and nationwide, Easley has helped more than 60 clients design, build, start up, and optimize their operations. Easley is an active participant on multiple committees in various industries, non-profit groups, and rule making organizations that are setting the standards and regulations guiding this industry. Through his involvement he is able to promote sustainable, sensible practices and policies that drive cannabis cultivation and industry best practices into new realms of productivity, profitability, and professionalism.

We were able to sit down with Nic Easley after the conference to get some better insights for how the industry performed in 2015 and what is in store for 2016.

 

CannabisIndustryJournal: How do you think Colorado’s year of pesticide recalls will help shape the industry’s future?

Nic Easley: As a member of the Pesticide Advisory Committee with the Colorado Department of Agriculture, I think there is a tangible need for better, more comprehensive regulatory guidance. If we come out with strict pesticide regulations, it will be better for everyone in the industry and consumers, but more importantly it will benefit patients gaining access to safe, laboratory-tested medicine. The regulators will need our help to write the rules. Harder laws are good for us though, because the ethical businesses will always take the route of integrity, as opposed to the businesses that cut corners. Those companies not playing above board will be weeded out and reprimanded in due time. A lot of it comes with the responsibility as a grower and producer to facilitate medical needs, that is a responsibility that requires great integrity. As for the testing regulations, there are too many conflicts of interest and we need to look toward third party testing and accreditation to prevent laboratory shopping, skewed results and other inconsistencies. We need to not allow producers to provide their own samples, sampling and sample preparation needs to be controlled through third party laboratories working above board, as opposed to labs wanting to keep clients instead of providing accurate and consistent test results. Looking forward to 2016, we will continue to see the pesticide issue shape the industry, for better or worse, this is a problem we need to find the right solutions for and that comes through working with regulators, like the Colorado Marijuana Enforcement Division, to write the required regulatory framework.

CIJ: Looking nationally, what major trends were highlighted in 2015 and what would you like to see change for 2016?

Nic: With Oregon going online October 1st, and Maryland’s license application process opening up, we are recognizing some diminishing barriers to entry in markets previously difficult to tap due to things like residency requirements and where the capital came from. Maryland’s infused product and processing licenses are much more readily available as opposed to the cultivation licenses due to stipulations. States like Oregon and Alaska that dragged their feet a little with regard to their regulatory model, are just releasing a lot of barriers to entry for licensing applications. Oregon may have missed some tax revenue in the initial launch of the program, but they are doing it right through diligent research instead of using their citizens as guinea pigs. For businesses looking to get started, you can avoid poor decision making by knowing the rules. New and established businesses alike need to take the responsibility to write the rules to be socially, environmentally and economically responsible. If we want to make money in this industry to help the government’s role in keeping us safe, then doing business in the most socially responsible way possible will lead to profitability. What I would like to see change for 2016 is the expanding list of qualifying conditions. As a military veteran, I would like to see Colorado stop looking at the tax revenue of adult use cannabis, and make PTSD a qualifying condition for medical marijuana. The Bob Hoban lawsuit suggests that Colorado is marginalizing medicine because they will make more tax revenue by blurring the lines of adult use and medicine. All of the studies out there, including Dr. Sue Sisley’s work, suggests PTSD can be treated with medical marijuana. That highlights another trend I would like to see change in 2016: We need clinical research on these conditions, because observational research just is not credible enough. We [businesses in the industry] need to actively promote the need for clinical research to help propel social change and get the information and knowledge out there. With the right information, this industry can make informed decisions that will help all stakeholders.

CIJ: What advice can you offer to cannabis businesses for 2016?

Nic: I tell my clients that, because cannabis is still federally illegal, you must understand the present risk associated with the work you are doing. We need to ask questions like how can we do this responsibly and set a good example so when the time comes, the federal government will look to us as a legitimate industry, working with regulators to write the rules for safety. For new businesses, produce the safest, highest quality, and affordable medicine and work with other businesses and regulators to keep innovating in the area of safety. Focus on the structure of your business: build your foundations and using expert advice, you can avoid major pitfalls and become the leaders in this brand new industry. Look for environmentally sustainable solutions, climate change issues need to be addressed in this industry. Use appropriate technology instead of burning coal to grow marijuana, which increases our carbon footprint. This includes both environmentally sound standard operating procedures and the right technologies, but also social justice. We are presented with a terrific economic opportunity to work on climate change issues, so work to address inefficient practices and innovate to be as sustainable as possible.

CIJ: For the entire cannabis industry in 2016 , what kind of growth do you expect?

Nic: We have reached a point where I foresee a holding pattern beginning to take shape. In 2016, the industry will continue to grow and demand will not be satiated by supply. August of 2015 was the first month when Colorado saw over $100 million in sales. We will increasingly see more price fluctuations as bigger projects come online. Many states in 2016 will focus on problems with their regulatory models and devising solutions for them. Businesses will continue their strategic growth planning, with key states potentially coming online for adult use such as Nevada and California. Nevada is one of the most up and coming markets in America with a 68% approval rating, and they have the ability to grandfather in businesses and previous rules associated with their medical marijuana program. Knowing licensing applications can take eight to eighteen months before you can become operational, we have to place our bets wisely. There is a lot happening in all these states and from the big November votes on, chaos will ensue as regulators tackle big problems with the overhaul. In 2016, the cannabis industry will make a big impact on the United States, and the exciting part is that progress is made through business as usual for us.