Tag Archives: marketing

December 10, 2015

G FarmaLabs Brand Poised for Expansion, Recreational Sales

By Aaron G. Biros

Patients in California have had access to medical marijuana since it was legalized in 1996. Two decades of legal medical marijuana in California, the world’s eight largest economy, has formed a thriving market of producers, processors and dispensaries. Propositions on the state’s ballot for 2016, such as the Control, Regulate and Tax Adult Use of Marijuana Act, promise measures to introduce the recreational market into the state regulatory system.

G FarmaLabs, a family-owned and operated business, has been operating in California since November of 2013, when they launched at a Marijuana Business Conference in Seattle that year. Ata Gonzalez, founder of G FarmaBrands and chief executive officer of G FarmaLabs, has been in the cannabis industry since 2009, cultivating in California and operating marijuana dispensaries, when he took notice of the changing industry and consumer trends shifting toward consumption of edibles and concentrates.

Ata Gonzalez, CEO of G FarmaLabs and founder of GFarmaBrands

“Once the Cole Memo hit in August of 2013, the cannabis industry took off and so did we through a combination of great timing and well thought out regular market packaging and marketing,” says Gonzalez. “With our background in cultivation, we use quality flower as the foundation of our brand, and our proprietary cannabis oil formulations are the backbone of the brand, we use that oil to infuse all regular market edibles products.” They are vertically integrated, beginning with their cultivation of seven strains, so they monitor every blend going into their products and test for potency and pesticides in a consistent manner.

Another key ingredient in their brand recognition seems to come through great product diversity. G FarmaLabs has twenty flavors of infused chocolate bars, a variety of chocolate truffles, pretzels, brittle, chocolate covered cherries, teas, lemonades and other forms of infused edibles. They manufacture a variety of cannabis oil concentrates that come in a syringe to refill cartridges or put on your dry flower or joint but they also sell pre-filled vape cartridges, and pre rolled cannabis cigarettes called G Stiks.

The G FarmaLabs logo, an integral part of their branding, is emblazoned on their packaging.

Luigi De Dominicis, chief technology officer of G FarmaBrands, says their extraction process is another essential factor in the brand’s success. They run their raw plant material through supercritical fluid extraction (SFE) with CO2. “We do not use solvents like butane to extract our oil because CO2 is proven to be safe for both the operator and end user; we pride ourselves in putting out a safe and quality product,” says De Dominicis. “The same product that goes into our cartridges and syringes goes into our edibles with a different refinement process, which are all tested for potency, microbials and pesticides to ensure consistency, safety and quality.”

In building a successful recreational brand, their expansion model will play a crucial role in keeping their reputation for quality and consistency. David Kotler, Esq., regulatory counsel for global territories at G FarmaBrands, cites their licensing model as the primary distinction between G FarmaBrands and other large marijuana brands looking to expand across state lines. “We are trying to own and control every operation and keep it consistent with production and manufacturing versus giving up control via the licensing process and giving it to others,” says Kotler. This distinction means that G FarmaLabs producers and processors in different states will all operate under the same best practices regardless of location, ensuring consistency from one state to the next.

A glimpse into the new G FarmaLabs facility: The site plan in the city of Desert Hot Springs w3here they are applying for a permit — A glimpse into the new G FarmaLabs facility: The site plan in the city of Desert Hot Springs where they are applying for a permit

“While most states have some form of residency requirements, we are planning to grow organically and self contained, ideally expanding to areas where G FarmaBrands can hold licenses,” adds Kotler. For example, Maryland does not have a residency requirement in their licensing application so that is one of the states they are actively pursuing.

Moving forward, G FarmaBrands is positioning itself for national recognition. “It is difficult in this current regulatory state to state structure to have a national brand, but national recognition is certainly attainable through our great in-house marketing team,” says Kotler.

Running an expansion model of keeping everything very internal, along with their dedication to safety and quality, G FarmaBrands is very well-positioned to be the premier cannabis brand for the state of California, and possibly the nation. They recently harvested a crop in Washington State and in 2016, their products will come to market there. As GFarmaBrands attempts to expand into Maryland for manufacturing, cultivating and operating a retail dispensary, Gonzales keeps his mind set on sustainable growth through 2016 and beyond.

December 4, 2015

U.S. Postal Service Memo Implications for Cannabis Marketing

By Aaron G. Biros

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The U.S. Postal Service sent a memo to print publications in the Northwest this week reminding them of federal law regarding advertisements for Schedule I controlled substances. This comes as less of a directive and more of a reminder for many magazines and newspapers that ads for marijuana in print publications delivered via the postal service are not compliant with federal law.

While nothing has changed in the legislation, it produces some confusion for small cannabis business owners and publications alike that are in compliance with state and local laws when running ads involving cannabis. The Washington State Liquor and Cannabis Board’s frequently asked questions page on their website explicitly contradicts federal law.

One of the questions on that webpage asks: “May I use direct mail to households and inserts delivered via the Seattle Times and other publications?” And the answer provided by the Washington State Liquor and Cannabis Board states: “Yes, inserts may not contain coupons.” This statement is clearly contradictory to federal law and to the memo sent by the U.S. Postal Service.

According to David Paleschuck, director of licensing and brand partnerships at DOPE Magazine, thinks this confusion will effect mainly small businesses. “As a business owner this tells me that it is OK to publish in newspapers like the Seattle Times which we all know is not directly delivered using the USPS.”

The memo does not directly affect DOPE Magazine’s distribution because it is not subscription-based. “We distribute via retail through dispensaries and recreational stores so it is not mailed directly to our readers,” Paleschuck says. “This will however affect many of our advertisers that are featured in subscription-based publications; Those companies and brands will not be able to advertise in publications sent through the postal service and thus non-subscription-based publications will pick up the slack.”

“States like Washington have very vague guidelines for marketing cannabis,” says Paleschuck. “There needs to more clarity for state and federal guidelines on marketing for cannabis businesses.” Moving forward, regulators will have to clarify these guidelines to determine how cannabis businesses can stay compliant.

Dawn Roberts, marketing executive at O.penVAPE, believes the memo will have a number of implications for her marketing strategies. O.penVAPE operates in nine states, manufacturing and selling oil cartridges and vape pens. “We are responsible for booking the advertising for all of our licensees to identify the best opportunities and provide support and direction for advertising and promoting their business,” says Roberts. “This [the U.S. Postal Service memo] affects our considerations for developing marketing strategies for all of the nine states we are in with regard to print publications.”

Looking at how the effects will impact their business development, Roberts needs to revisit every print publication they advertise in and check to see if it is subscription-based. “As a marketer for a brand that has a national footprint, I need to reevaluate my strategies for 2016 and look into certain publications that are subscription based,” Roberts adds. “We need to figure out how this will affect our marketing strategies for 2016.”

While this confusion gets sorted out, dispensaries and other cannabis businesses need to reevaluate their advertising and promotional strategies to stay compliant with federal and state laws.

December 3, 2015

Consumer Trends: Analyzing Oregon’s Dynamic Markets

By Aaron G. Biros

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Oregon was the second state to legalize medical marijuana in 1998 behind California that introduced legislation measures two years earlier in 1996. In the past two decades, Oregon has grown its medical market, treating more patients and producing exponentially more cannabis. Since October 1^st of 2015, Oregon’s recreational sales have been made legal, creating potential opportunities for dispensaries to target this emerging market.

In that first week of recreational sales alone, dispensaries in Oregon made over $11 million in revenue. That figure is more than double what Colorado made in its first week and significantly larger than Washington’s figures posted.

puregreenpdx — The exterior storefront of PureGreen in Northeast Portland, Oregon

Matt Walstatter, president and founder of PureGreen, a dispensary located in Northeast Portland, Oregon, says that while recreational customers are limited to seven grams of flower per day (no concentrates or edibles yet), they have noticed an uptick in sales of certain strains.

“Up until October 1^st of this year, our sales percentages have been very consistent with about 66% to 72% flower sales since we opened and around 20% concentrates and 10% edibles, with the remainder consisting of topicals and non-medicated products,” says Walstatter. “Now we have an influx of a new type of customer so we do around 80% of sales in flower since the introduction of recreational sales on October 1^st.”

When analyzing the top-selling strains, Walstatter’s figures show an inclination of customers and patients to prefer high-THC strains when buying flower. Girl Scout Cookies, a very high THC, low CBD strain, consistently sells the most at over 2000 grams per month. “People that smoke flower generally want high-THC strains, while people that seek CBD overwhelmingly do not smoke as much and prefer ingesting edibles, tinctures, capsules or other products with low THC content,” adds Walstatter.

PureGreen keeps a select few high-CBD strains on their shelves, including Cannatonic, which is known for its approximate 1:1 ratio of THC to CBD. “Out of twenty five strains on my shelves, I usually keep two or three high-CBD strains because they have their niche, even if they are less sought after, it is certainly worthwhile to carry them,” says Walstatter.

“Because Oregon has such a well established cannabis culture with less novice customers than other markets, our more popular strains are consistent over multiple months so we built a brand around knowledge and education,” Walstatter says. “Our budtenders usually come from a background involving the plant whether they were involved in cultivation, trimming or processing, and then they go through extensive training to be able to recommend certain strains for different ailments or preferences.”

Walstatter offered some tips for dispensary owners and employees at the Las Vegas Marijuana Business Conference in November where he sat on a panel with other industry experts called What Patients and Consumers Want: Strain Trends, Product Mix & CBD vs. THC. “Understanding your customer’s needs and their buying habits plus properly managing your inventory is the key to success,” says Walstatter. “We have a couple of exclusive growers that went through an extensive review process, they tend to rotate through different strains while we have some grower-specialists that grow only one strain very consistently.”

Walstatter prides himself in his team’s exceptional customer service. “People do business with people they know, like and trust, so authenticity is very important to us,” he adds. “Over delivering on value in the form of knowledge, expertise and service is crucial to growing your brand and business.” Having a high quality product mix, knowledgeable staff and inviting atmosphere are a few of the ingredients to running a successful dispensary.

“It can take up to six months or longer to bring a new strain from seed to sale, so if it is a popular strain, it is very important to have a backup grower,” Walstatter adds. He likens his dispensary to a farm-to-table restaurant where the menu is constantly changing: “This time of year, there are some greenhouse and outdoor crops that do well on the shelves but strains can go in and out of season.”

While edibles and concentrates are not yet available for recreational sales, state regulators are closely monitoring other state’s rules and progress to map out a timeline for their introduction. This would effectively create another new emerging market, opening up potential opportunities for dispensaries in Oregon to diversify.

October 29, 2015

Women & Leadership in the Cannabis Industry

By Aaron G. Biros

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

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

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

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

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

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

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

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

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

October 19, 2015

A Dispensary’s Road to Success

By Aaron G. Biros

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The Herbery, a dispensary with two locations in Vancouver, Washington, is currently awaiting medical endorsements from the state for both locations. The two co-founders, Jim Mullen and Rick Zahler, found a credit union to work with them, Salal Credit Union in Seattle. “There are five dispensaries in the Western part of Vancouver, so it is quite a saturated market,” says Jim Mullen. “But we have drawn considerable business and are very happy with the success of our two locations.”

It has not always been like that, says Mullen. There are several key ingredients that go into launching and operating a successful dispensary, all of which pose significant barriers to entry in an extremely competitive retail market. Rick Zahler won the second and third positions in Vancouver for the state i502 retail licensing lottery. Zahler has more than 40 years of experience in franchising restaurants, a background that gives him a competitive advantage in scaling up his business.

Mullen and Zahler formed a partnership in early 2014 and by that summer they had finalized their lease agreement, converting an old restaurant into their flagship store. They hired local architects, contractors, and CPA’s and began looking for staff. “We set out to find the best people who could provide a level of customer service that this industry needs to be recognized as a mainstream business,” adds Mullen.

“We are changing the perception that you have to go into some back alley store to buy your pot,” he says. “We have a very attractive, well-lit storefront; we get complimented on the look of our stores all the time, one woman called us the Nordstrom’s of dispensaries.”

Before the doors opened, Mullen and Zahler worked long and hard to find growers, manufacturers and processors that met their standards. “We wanted to fill our display cases and shelves with premium cannabis, so we found really high-quality indoor, outdoor and greenhouse grows across the state,” says Mullen. “We go out and do site visits to see firsthand what nutrients they use, along with their standards and practices, to really size up our suppliers and verify they are giving us safe and high-quality products.”

budtenderpic — A bud tender helping customers at the dispensary

The Herbery hit some early obstacles as the market in Vancouver became highly saturated with dispensaries like New Vansterdam and Main Street Marijuana grossing well over $1 million each in revenue in May 2015.

“Our competition received a lot of media coverage and brand recognition early on. We had to side-step that with heavy guerilla marketing including handing out cards and flyers on street corners,” says Mullen. “We continued to push our social media marketing campaigns, slowly building a clientele with quality products, affordable prices and good customer service.”

Of all the roadblocks they hit, Mullen said the toughest aspect of getting started has been simply “letting people know that we opened and where we are.”

“There are fairly strict marketing rules, and staying compliant is difficult when you are trying to get your name out there,” Mullen adds. “We have been doing what we can with billboards and ads in magazines, but really word of mouth has gotten us far.”

budtenderpicdispensary — A bud tender can give recommendations on different strains or advice on consuming edibles

Looking forward, Mullen wants the ability to market in a manner that is similar to other mainstream businesses. He is also excited to get endorsed to sell medical cannabis. “With so many people seeking high-CBD products for a variety of conditions like fibromyalgia, chronic pain, anxiety, and more, we want to help patients get access to the medicine they need.”

As cannabis continues to be studied for its true benefits, Mullen anticipates significant advances in knowledge to occur within a very short timeframe.