We had a chance to catch up with David Paleschuck, author of Branding Bud: The Commercialization of Cannabis.
The first-of-its-kind book breaks new territory, offering a comprehensive overview and contextualization of this new segment, examining the multitude of emerging brands, their creative assets, and the strategies behind them. In addition, “Branding Bud” touches upon the political and legal history of cannabis, consumer segments, and means of consumption, and how that has informed the legal cannabis brand landscape developing today.
(edited for publication)
What makes a cannabis brand successful? What techniques do companies use to brand and market their products? What segments have been established? In Branding Bud: The Commercialization of Cannabis, David Paleschuck answers these questions, digging deep into this evolving industry to uncover what both small companies and large corporations are doing to introduce their products to the hearts and minds of cannabis consumers. The results of his exploration may surprise you. Branding Bud showcases the exciting range of products that cannabis consumers will be able to buy in a local dispensary once legalization comes to their state.
The book offers a comprehensive overview and contextualization of this new segment, examining the multitude of emerging brands, their creative assets, the strategies behind them, and the political, legal, and cultural aspects of cannabis that inform the brand landscape of today. This book is a must-read for entrepreneurs, investors, marketers, designers, and anyone interested in the rapidly growing cannabis industry.
Good morning and welcome to CannaList. I am your host, Patrick Doherty, and we are talking with author David Palachuk about his new book, The Commercialization of Cannabis. How are you?
I’m doing well. Thank you.
What led you to write a book?
Well, that’s a great question. As you know, I entered the cannabis industry 11 years ago, and I realized that I had more questions than answers were being given; and I thought the best way to search out the answers was to speak to folks in the industry that knew the most. And over time, I started to capture that information, and then I went to work at Dope Magazine as the vice president of brand partnerships and licensing. And as I helped them reshape the magazine, I started to write for the magazine. Also, my background for years at American Express, MasterCard, Pepsi, and Microsoft has always been in marketing and brand building. So, I started to look at brands created in the cannabis space. I began to write an article every month; a three-page article called “Branding Bud,” and, essentially, after 28 months of writing three-page articles, I realized I had enough content where I could start to roll that up into something that might capture what was happening in the market in the cannabis space; in the developing brand landscape of the cannabis industry. And it seemed like there were many people interested in that, so I created a book, and it’s taken a long time. And because things changed so fast, I had to re-rewrite that book several times, but fortunately, I got it out, and it’s on its way. It’s got a life of its own now.
My understanding is, and you can fill this in for me, but you’re number one in the category of branding, and you’re number one in the category of green on Amazon. Is that correct?
Yeah. The book was released on 420, and for the last year, yeah. Exactly. The book has been number one in logo and branding logo design for the last five weeks. And green business on Amazon. It’s pretty amazing and, so, one of the interesting things that recently occurred is that it’s now moved the product into high tech.
What do you think of that? Where somebody traditionally known as a publishing brand is now moving into product. What does that tell you about the industry?
Well, so, I have strong opinions on that. The first thing is I’ll comment on is when I went to work for Dope Magazine years ago, this was probably seven or eight years ago, they were coming out with their product line as well at the time and, so, coming in and working with the five founders, my first comment to them was: “Do you guys realize you’re competing with your advertisers?” which they didn’t realize. So, the Dope pen, which was Dope Magazine’s “vape” pen, was a full-page ad on page four, but their highest-paid advert paying advertiser, who had a vape pen, was on page 44 with a full-page app and, so, that started to catch up to them. So, hence, there were cartridges; there was even the dope pack and, so, my suggestion to them was, and what we eventually did, was say, “you guys should not be developing products, but rather you can put your name on a product if you take the approach of wine spectator or cigar aficionado, where you are more of the purveyors of fine quality products and producer processors within different states. And, so, you’re bringing them to the fore, and you’re overlaying your name and working with them to call out the best product within each of the legal states.”
So, that’s how we created and took that program, but relative to where High Times is, yes, I just got to do emails this morning in my Inbox for High Times CBD products. So, I don’t think that’s a smart strategy. But, again, I believe they are competing against their potential advertisers. And, on a side note, I don’t often say things like this; I think High Times has other things to focus on, like going public, which they’ve tried to do many times and have not successfully done so. So, this may be their Plan B: come up with a line of products. But I don’t think it’s a smart strategy for a publication to develop a line of products that competes with their advertisers.
I mean, I think the challenge is that being a publication is tough, right? That market, in general, is tough. So, they just might be trying to diversify because that is such a challenging industry.
And even further, they used to do the High Times cannabis cups, and both for rules and regulations, mismanagement of the events, and a pandemic overlaid on that. So, the pandemic was just the nail in the coffin for the events. So, if you don’t have events and you’re in the publishing world, you’re trying to go public… There have been many missteps. So, creating a CBD product or potentially even a delta-8 product, or something like that, might be the way to go because that’s what’s selling now.
And from a branding perspective, I’d like to sort of talk about CBD a little bit and about the fact that the market was overridden by companies making claims that they should not legitimately be making, right? Where touting what this product could do without scientific evidence to support that. Can you speak to that a little bit? How are your branding and the idea of being able to trust a brand?
Well, I mean, trust is everything, right? I mean, at its core, a brand is a promise and the ability to fulfill that promise consistently. That’s what a brand is. So, I mean, let’s just talk about the industry for a moment. Many people are coming into the industry, both on the THC and CBD sides. Many of the folks that came into the CBD industry were the THC companies that rushed into their states but then realized there was a lot of competition, a lot of taxation, and many limitations. And a lot of capital is needed to build a national brand. So, these THC companies were doing that, and all of a sudden realized like: “wow. This isn’t going as fast as we thought. We’re not making as much money. Federal legalization isn’t happening. So, if I want to move to another state, I have to build new facilities in that state, partner with somebody, or license my brand.
So, I think what happened is after the farm bill passed, I believe many THC companies said: “hey. Why don’t we get into the CBD business.” And so you had a lot of small companies that were underfunded trying to get into the national business. And those folks, quite frankly, don’t know very much about what the FDA expects or demands from products in the market with different constituent components. So, I think there were just many people who didn’t know how to play fairly. And I also think the FDA was caught a little off guard in terms of “wow. How do we manage this?
There are so many brands in the market. They’re selling everywhere. How is this happening? And, so, there’s the FDA who has sent out a number of I’ll call them “cease and desist letters” basically, as well as in terms of false claims and things like that. So, there’s been a real reorganizing of the industry, and I think I’m speaking on the 12th at the USA CBD Expo in Atlanta, the largest CBD show in the U.S., which is sold out. So, I think everybody is finally coming back, and everybody’s ready to get on board again, but there’s been a lot going on in the CBD space; not only on the brand level but also on the manufacturing level, and sort of the big blood in hemp here in the U.S. But coming back to your question, it’s difficult for brands to consistently deliver a promise when rules and regulations are changing and when they’re perhaps not the right companies to be delivering a product in a way that consumers have always been used to receiving a product.
I mean, you could almost say that across the industry, beyond CBD, even in Canada, because [of what] we saw in the green rush was a lot of people assumed that they would make a lot of money. So, they chased after business with little or no experience in the cannabis industry, without an awareness of the tax implications of running this type of business, the penalties, the compliance issues, those types of things. So, this idea of all these companies rushed into this space, assuming there was this green rush with little or no real understanding of the industry.
That’s true, so I see that in two directions. First, you have entrepreneurs coming into the industry with no clue about the culture, the product, the rules, and the regulation, and then you also have legacy growers that have been growing for decades. They’ve never had to brand their product. They’ve never had to market their product. They’ve never had to package their product other than in a baggie. They’ve never had to transport their product in ways they need to now. And they never dealt with compliance.
That’s right. The racing and tracking and the seat [receipt] of sale. So, two groups are working both ends against the middle, trying to figure out how to create an industry, and it’s been really… I hate to use the word disruptive, but [the industry has been disrupted,] but the internal industry components of the industry have been battles between suits and stoners, and hedge funds and the like, in terms of how to develop brands. What brands are meaningful to cannabis consumers? Who are cannabis consumers? All these things are taking place now. Conversations that are taking place as the industry develops. It’s just intriguing, which leads me to one thing that I often share in the middle of conversations when they tend to get heated about cannabis. Often in the conversations I participate in, people talk about the plant, and typically they are a legacy, cultivators. So, they talk about a plant in a way that there’s so much love, and there’s so much passion, and then, on the other side of the table, there’s an investor and that investor saying: “but what about the beverages? And what about the transdermal patches? And what about the sublingual slips?” And what about the edibles? And what about all the other things?”
And that’s where I kind of come in and say: “hey, there will always be a place in the industry for the plant.” And in many ways, let’s even call that a craft industry. There’ll always be that, but once THC, CBD, CBG, CBN, all the other cannabinoids are extracted from the plant and become distillates, isolates, or essentially an ingredient that goes into another product, that’s a whole further conversation. I feel that that will be a different market if you will. And in some ways, maybe even different industries, if you will. THC or cannabinoids will only be an ingredient in those products, but it will just be completely different. It will be another industry.
So, I believe there’ll be an industry based on “flower,” and then there’ll be an industry based on cannabinoids. And the industry based on cannabinoids will be multiple industries using cannabinoids as an ingredient in their products. And, so, I think that’s how it will start. For example, let’s say Pabst Blue Ribbon was already in the cannabis-infused beverage game in California; they’re not having the same conversations that a flower producer, farmer, or cultivator is having. They get their product; it’s sourced, pump it into their product, carbonate it, and ship it out. And when it becomes federally legal, they’re going to sell their Pabst Blue Ribbon cannabis-infused sparkling seltzer in 7-elevens, other convenience stores, and gas stations, right? Next to the other VR will be a different channel and a different type of product than flower. So, my opinion is, as things further develop, there really will be a bifurcation of cannabis flower versus all the other types of products; or form factors that contain cannabinoids in them as an ingredient.
But couldn’t you also say that about the flower itself? Because what we have is we have a medicinal market, and we have a recreational market, and those are considerably different, right? I’m assuming you’re the branding expert, but the way you brand to a medicinal client or the doctors is substantially different from looking at a recreational product.
It is. So, the differentiation would be for me the way I look at it. If you will, I have a couple of different spectrums that I look at brands. So, I have a spectrum, which is additive and subtractive in this case. So, the additive is: will this product enhance my experience? It often tends to be more aspirational and recreational than a type of product, which is subtractive. I need to alleviate the pain in my back or my joints. That tends to be more medicinal and, so, I often sort of look at brands on that spectrum, as well to sort of determining how to market, and how to build the content around that, and the messaging, and the tone, but at the end of the day, yeah, you’re right. There will be medicinal consumers that consume “flower,” and there will be recreational consumers that consume “flower,” and even though that’s the flower side, they will have different messages; pumped to them, so to speak, or pushed to them, because it’s flower.
There will still be some basic similarities in what we talk about. So, that would be terpene. Well, it would be THC levels, right? It would be terpenes. It would be all the other things you talk about when you talk about flower, and I think those translate to recreational or adult use; your consumer versus a medical patient. I think those are similar conversations. They might vary because this particular strain helps me with my particular ailment. In contrast, a recreational or adult user might say this particular stream helps me focus and allows me to write, paint, be more creative, or perform better at certain things.
So, I think there are conversations, both medical and recreational, with flower. But still, I think they are very different conversations when they start to break, and cannabis is an ingredient. And then I think, over time, that ingredient will also be mixed with other ingredients, of course, and other health and wellness ingredients, for example. So, maybe it’s cannabinoids and cardamom or turmeric or other things. But, still, a friend of mine who’s in the industry, and has developed many well-known products here in the U.S., recently said to me the entourage effect doesn’t stop at cannabis. The entourage effect, something that we live with every day, if we know different things affect us in different ways and, if we have those affecting at the same time, then you know there’s a compound, or it’s not just “one plus the one equals two.” It’s one plus one equals three because there is this entourage effect.
So, it’s interesting to see that people are now looking into other things, like other health and wellness components or ingredients that they could start to mix with cannabinoids, like mushrooms, for example. That’s something huge right now. Looking at mushrooms and seeing when, I say, that not necessarily psychotropic mushrooms, but just being mushrooms and the study of mycology mixed in with cannabinoids seems to be a big trend right now, but that too is the entourage effect and how these components work with one another within our body.
One of the things that come to mind is from a brandy perspective. If you talked about a cannabis user ten years ago, you had a stereotype of that person’s appearance, right? And today, we have seniors using it for pain relief. We have health and wellness. There are CBD products for people going to the gym and enhancing. And, as you said, there are some entourage effects for some of the other things. So, our user personae have changed. Have they not?
Absolutely and, it’s funny, you just said a moment ago cannabis users over the years have changed, and now I don’t even use the word “use.” But, still, I use the word “consume” and “consumers” instead of “users” because even that, in many ways, is a stereotype. But, still, a new study came out about customer segmentation within the cannabis consumer, and that was intriguing to see how people are consuming and how newer consumers are consuming different than older, long-term consumers. And how as people pass through different generations, they too are consuming differently.
Some of the older generations, who tend to smoke cannabis, are now moving away from using tinctures, pills, capsules, sublingual slips, or bombs or topicals to alleviate and relieve some of their pain. And at the same time, they are changing form factors, but they’re also dropping some of the other medications non-cannabis medications that they’ve been taking along the way. And they’re looking for substitutes, and these new persons require a different way to look at branding. Do they not?
It’s interesting. I sort of have my model, which I look at Cannabis consumers. But I think about it in six concentric circles, right? The way I have, I’ve got the canon core in the middle. The canon core is the group that consumes almost every day. They eat, sleep and drink cannabis. They’re most likely in the industry. They’re aficionados. They’re connoisseurs or canna sorts in this case. The next ring out of that is the kind of comfortable. They consume every so often and have friends that consume often. And so they’re not taken aback by it. They’re not threatened by it. They don’t mind the smell of it or the effects of it. And then there’s the next ring out. The kind of casual, which is just a little bit further out again. They may have some experience. Maybe they consumed in the past, but they don’t currently consume. Now they’re still looking into it a little bit.
Then the next ring out from that I call the canon confused. And those are the folks that can’t figure out if CBD is psychotropic. They don’t know if they want to jump into the pool. They’re not even quite sure if they’re going to put a toe in the pool. They’re interested. They’re going to get high from CBD. That’s right. Then after that, there’s a kind of neutral. They just don’t care about it, and then the furthest ring out is the canna contra. They’re just against it, so, now, if you start to look at that on a high meta-level, you know you can break it down, and you can say, “Well, how do I talk to these people? The canna contra?” Maybe I don’t bother with that person or educate that person. The outer rings are more about educating. The inner rings and the core are more about engaging in conversations because the level of knowledge is there.
So, I kind of look at consumers at their most basic level. On that level, those concentric rings, but then when you start to get into the persona, you can have a curious person that’s a soccer mom, or you can have a curious person suffering from arthritis. You could have many different personalities and personas so let’s even break that down. Often where I start, and regardless of the ring they’re sorted into, is: are they a discrete consumer, or an indiscreet consumer, and what that will tell me is their needs, state their ritual patterns, and a whole bunch of other things. And by that, if they’re a discrete consumer, let’s just say they’re a soccer mom, they want to consume more likely than not. They are either alleviating, let’s say, stress or pain or anxiety. They’ll be most likely micro-dose to control these ailments if they consume throughout the day. Then I get into the discrete versus non-discrete. If they’re a soccer mom, they’re not going to light up a joint.
Or if there’s somebody sensitive to the smell?
That’s right. Or they’re not going to go out at lunch and smoke a joint and come back in so they smell; like a weed. And everybody says, “dude, what’d you do at lunch?” So there are these different needs within their needs states and the rituals they typically surround themselves with. So, in the case of a soccer mom, and again I’m creating a stereotype here, but so if the soccer mom is dealing with anxiety, she might want to micro-dose, and she might want to micro-dose discreetly. So, maybe that’s a mint where she could take a two milligram or five-milligram mint every couple of hours, and she’s fine, and nobody knows the difference. So, that might be a lot easier than even having a vape pen for her, or she could use a sublingual slip and put it under her tongue, or maybe she would put a transdermal patch on and keep it on all day. It looks like a band-aid to everybody else, but she’s correctly getting her dosage, and she’s managing her pain and anxiety.
So, that’s really how I see different personas, figuring out how best to consume both the form fact. It starts with discrete and indiscreet, but it gets into the form factor. Once you start to think about the form factor, you can get into the bioavailability and uptake means; meaning, am I smoking it? Am I eating it? Am I drinking it? Am I rubbing it on my skin? And then, you can start to get a handle on the uptake in bioavailability. Therefore, your dosing: the number of times you take it to benefit or alleviate the issues you’re looking to alleviate.
So there is a directional course for people to figure out the best way to consume cannabis, even more so because we’re talking about branding. There is a way for brands to develop meaningful products that are correctly dosed in the right form factors; that have the right messaging for the particular consumer and overlaid with a brand archetype and a style that appeals to that consumer so that the consumer not only gets the product they need, but it’s delivered in the form factor they want in a message, and tone, and look and feel and language that they understand and, as long as the brand can consistently deliver on that, then they’ll have a loyal customer.
And what do you think about when we think of examples where branding has gone bad, or people have used branding. The thing that is sort of popping into my head in the recent weeks is there’s been a lot of lawsuits [that] are just general pushback from large candy companies where some of these cannabis companies are making knockoff type products based on the candy structure, right? And you know there’s been a considerable pushback. What’s your response to companies that do that?
What’s my response? Well, because we’re being recorded right now, I can’t give you my true response, but don’t tone it down slightly, okay? So, let’s just start with basic business, right? Let me even back up, I understand the trend in the cannabis industry to move toward strains that have had different, either candy-related names or dessert related names, or sweet pastry type names that stem from Scherbinski, and gelato, and mochi, and all the other strains that have a wedding cake and all the other things that have come about on top of that. Some strains have been named after candy skittles. In particular, it is, I believe, what you’re referring to, and in the past, there have been things with gorilla glue, as well. So, this is not the first time this has happened. This is why I react—the way I do. I’m appalled at the absolute poor business judgment by any business owner, cannabis or non-cannabis, to create a product that infringes upon somebody else’s trademark. So, let’s just start there. It’s just bad business. Secondly, it’s dumb you’re going to invest in a name and packaging and all these other things that it’s just a matter of time, and it was before Mars Wrigley comes in and says, “Hey, here’s your cease and desist. You are not going to use our name. Oh, and by the way, in this case, Mars Wrigley is not only advocating for that, but they want possession of Terphogz, the company that’s being sued; they want possession of the skittles website domain. That Terphogz is currently using, which I believe a z in front of it, or one letter that differentiates it, but now what’s interesting here is that Mars Wrigley and Beau Wrigley have just created a parallel company and, so, they’re into the cannabis industry too. So, you know a lot of the cannabis industry folks are saying, “Oh. They’re just doing this because they’re getting into the cannabis industry.”
Well, that might be true, but the truth is they’re protecting their brand; infringement is ruining their assets.
Yeah. That’s right. So, it might be. Additionally, they happen to be getting into the cannabis industry, but as a brand owner. By the way, just a newsflash, I just got a High Times product email come in, but the point here is that they should not be doing this. They should not have started a brand. It’s trademark infringement, and you, quite frankly, whatever they get, they deserve and shame on them for not creating a brand that speaks to consumers, their consumers, in a way that they could have protected it and just built their brand now. They have to start over, right? Or they’re done? But it makes it all, and I hope this acts as a lesson to other brands. We saw gorilla, the strain gorilla glue, go from gorilla glue to gg. So, there are a lot of gg strains in the market now because of. So, it’s interesting, and trademarks will only become more and more of an issue, as you know, as more brands come on, and brands become federally legal and, from a branding perspective,
What’s the biggest challenge that most cannabis companies are is facing?
Well, from a branding perspective, I almost want to say: Number one, brands don’t necessarily know who their cannabis consumers are, but they’ve taken shots in the dark and said, “hey. Our brand stands for this. So, we’re generating a brand and coming back if you resonate with it. Be our customer.” And some brands have done that well. I mean, the cookies brand is a great example of that. It started with burner and rap music and doing genetics behind the scene. And now has grown into both a multi-platform brand with stores and bigger power lines that they sell in their stores and other major um chains. So, they’ve connected with their consumers in a way that other brands have not, but I think the biggest branding hurdle I would say is when you go into so when you startup.
Let’s just use an example. I’m going to use the 420 bar as an example. The 420 bar was developed in California in the legacy market by Marco Hoffman. He brought that to market through the Venice cookie company. Then he started Evergreen Herbal in Washington State, and he quickly realized that the dosing requirements, the packaging requirements, the labeling requirements from California to Washington were very different. So then he had success in Washington with the brand, and I came in and started to help him license that brand to other states.
So, we licensed that 420 bar to Alaska, we licensed it to Massachusetts, licensed it to Arizona, and a few others, but let me give you an example, which is why it’s difficult. So, the 420 bar in Washington has a ceiling of a hundred megs of THC. Each serving has a cap of 10 megs of THC. So, what you have in Washington State is basically a bag of chocolates with ten pieces individually wrapped. They have ten megs in each of those pieces with a cap of the total bag at 100 milligrams of THC. That’s the “rules and regs” in Washington State. Now, we license that to Arizona. Arizona has a different rule. You have different rules for dosing. So, their rules are 50 megs per dose with a cap of 300 in the total package and so, what we ended up doing, is we transformed our bag of 10-10 meg pieces into Arizona as a bag of six 50 meg pieces. Now, what that starts to do is change the molds. So, the dosing has already changed. The molds for the chocolate have all changed the packaging that it goes in, plus the different child-resistant packaging and wrapping.
So, when you start to roll through, this product was this in this state, but now the dosing has changed the number of tranches or pieces within a bag or within a bar demarcated has changed the mold has changed then the packaging it goes in all of the call outs. All of the rules and regulations, and I could keep going, but you get the idea, which happens within each state. You move your brand into, and not only that, you can pretty much almost assume that with every state, every six months, they’re going to have some sort of re-up on the rules and regulations. So, if you bought too much packaging, you’ve lost your packaging if they start to change. So, you have to play it. You almost have to do just-in-time inventory. You have to manage the different states. You have to see economies of scale and differences, but there’s another problem. And that was you led with. Branding is about consistency.
So, if I travel and buy this product in different states, I’m not getting the same product.
You’re exactly right.
Yeah. And that doesn’t undermine the brand because experience differs.
Well, so, yes, and I’ll use this analogy. Does it differentiate the experience from state to state? Wherever is that brand? Absolutely. And I could even go even deeper. Let’s talk about flower for a moment. The top 10 strains in Seattle are not the top 10 strains in Los Angeles nor San Diego and, because I had worked in the beverage industry for many years, one of the things that became clear is [Music] the sweeter the beverage [is], it typically appeals to either a lower socio-economic demographic or one that’s closer to the equator. So you say you just go. I was going to say, “going south, the sweeter the beverage.
The further south you’re going, right?
That’s right and so, let’s take Coca-Cola, for example; in Mexican Coke, which is cane sugar, I prefer it over American coke, but those nuances are a killer buzz, isn’t it? You’re going to [get a ] sugar buzz. That’s right. Yeah. So, it’s just different. It’s a different experience, yet I’ve always collected coke cans from around the world and coke bottles. So, I’ve always been interested in those nuances, but you’re right. Your experience of the 420 bar in Seattle or Los Angeles will not be the same as your experience in Arizona, and so, that’s where the brands right now have to be mindful of. What can they make consistent, right? How much of these moving parts can they make consistent, and so? One perfect example was as the brand manager for the 420 bar.
When it was licensed into Arizona, and they were starting to launch it, I went down to Arizona for the launch, and everything went well. I came back to Arizona about three months later to look at how they were manufacturing, making sure that they followed the sops again, leading toward this consistent delivery of a brand promise. And what I noticed were the pouches that they were selling the chocolate in. We had mandated the pouches, but what they did was we have labels, front and back, two labels in Washington and California. Two separate labels. What Arizona did was they took one label, and they wrapped it over the top. They said, “look at us. What we did. We’re so smart. We saved 50 on labels. We’re saving 50 on labels because we only have one label instead of two. And I said, “good for you, but that’s not in line with our brand, and you have changed the brand packaging, and I slapped them on the wrist, and I explained to them that that is not permitted in our brand license for them to change things that the concept is to keep things consistent and similar, and to the extent that we have all these other moving parts, like dosing and packaging regulations in different states, we need to keep whatever we can consistent. As consistent as we can, because we need to get to the point where, upon federal legalization, that experience of a 420 bar in Seattle is the same as it is in Phoenix as the same in Los Angeles, but that is rolled up into the ability to create a consistent experience, which is a brand.
And when you wrote the book, what were the takeaways that you were hoping that the reader would get or come away with?
Well, there are several different takeaways. So, I think first and foremost is, this is a plant, and it’s been completely misunderstood. That’s number one. Number two is the absolute baggage surrounding the plant. When it came to Harry Anslinger, the connections between Harry Anslinger and her newspapers and the Weyerhaeuser Family, and how hemp and paper pulp competed against each other during prohibition. There are many reasons why cannabis and hemp were prohibited, and it has nothing to do with cannabinoids. It has everything to do with the competition between hemp and paper and the newspaper companies, Hearst in particular, and Weyerhaeuser and how they all schemed to put hemp out of business.
So, I think that’s probably the first is it’s a very misunderstood plant. Second, it is about prohibition and why cannabis has been made illegal. Because once people start to understand that, they realize and do not often subscribe to conspiracies, but there were so many connections between Harry Anslinger and his wife and her family and so on. So, I think that, but what that did prohibition then created stereotypes and those stereotypes started in the 20s with cannabis in the fringe. Cannabis stands up in Harlem jazz.
When did reefer madness come out? I believe I want to say either in the early 20s or the late 1910s or early 20s. But, I mean, that’s propaganda, right?
Absolutely, and that was also part of Harry Anslinger’s propaganda. So, this all came out, and it was racist.
When black men smoke cannabis, they rape white women. There were unbelievable things that were said during that time. All were coming out of Harry Anslinger’s office, which was the former precursor to what the DEA is today, but this created the stereotypes around jazz, moving from jazz into moving further later what became of hippies. The beginning of Chichen Chang following things that sort of came out of that, whether it was fast times at Ridgemont High, Up in Smoke, Pineapple Express, the Vietnam War, say no to drugs. I could keep going, but it was just this onslaught of falsehoods about the plant, about the people that consume the plant, and what absolute garbage and derelicts they were.
So, with that, you know I wanted to change that. So, that was a big part of it. Once I kind of got through that, I also talked about cannabinoids. The basics of THC and CBD and how they affect us. How do they come into play? The entourage effect. Then I talk about form factors helping people know that there are different form factors. Not only is their flower. There are all the extracted cannabinoids, which come in waxes and butters, and oils that can be vaped or smoked. Then we get into edibles and beverages, even innovative products like sublingual slips and transdermal patches, topicals and lotions, pills. So, I talked about the form factors and how the body takes them in; means of uptake and then the bioavailability and then, finally, after that’s all laid out, I then talk about brands and I talk about the 14 cannabis brand archetypes, which appeal to customers, which I then get into in the 14 cannabis brand archetypes. They’re not mutually exclusive, but they can overlap with its fundamental, foodie brands, health and wellness brands, counter-culture brands, charity brands, gender brands, novelty brands.
There are all types of ways that brands appeal to consumers. And then I break it down into who are cannabis consumers, and I try to break down, finally, the stereotypes, because I think it’s important for people to realize when they’re reading the book that there are many types of consumers. But, again, as we discussed earlier, some are patients and use medicinal cannabis. Others use adult-use recreational cannabis, but they’re wide and varied, just like if you asked: who drinks beverages and what type of beverages? It can be anything from milk to alcohol. But, still, it was that overall picture that I was trying to create for people that were new to the industry, for people that was even already in the industry, for people that are interested in cannabis, for investors that want to know more as a grounding and a foundation, and then get a sense of who [which] some of these brands are, some of the leading brands, and why they’re successful.
That’s a long way of saying, of giving you, the multiple reasons I wrote the book, but I felt there was a need for it at this time, and, in the end, the book turned out to be the first book on cannabis branding ever written. So, I think there is a lot of interest in branding, in general, and certainly now in cannabis. So, I think the time is right, and I guess its position on Amazon is witness to that.
And what do you see looking forward to? How will this continue to evolve?
As we move closer toward federal legalization, which, I believe, will happen, we move closer to normalization. As we move closer to normalization, big larger consumer product goods companies come in and start to incorporate and use cannabinoids in their products. Whether they are specifically cannabis products or other products that have cannabinoids in them, Procter Gamble comes out with a crest toothpaste that suddenly has CBD in it will start to normalize over time. Banking for all these companies will be normalized, and the companies will start to grow; big corporations will support it. There’ll be insurance for people that work at these companies. All the things will normalize, and a new industry will develop out of this. It will become part of what I believe will be the existing CPG industry. Some of those companies will invest. Some new companies will come about. There will be aggregation like there always is, but I believe we’re on the road to normalization, and cannabis will be both something for recreational use and medical use. And we’ll see that manifest in those ways that we expect to.
I mean, to be a little bit of a devil’s advocate, one of the things that we are concerned about is, as these big players begin to move into space, they will change the nature of the industry, right? This idea of a mom-and-pop dispensary; will be in jeopardy because tobacco decides it wants to be in the industry, right? They will go in big. They’ll have economies of scale when pharma chooses to come in. Do you know what I mean? So, one of the challenges is as it normalizes its risks being taken over by big corporations.
That’s true. There is a risk, and I’m one [who will] say it outright: it will happen. I think there will be carve-outs and places where we’re either regulated there are means to keep, I’ll call it, people from the legacy market still in the industry. So, there’ll be rules around that. For example, Colorado now has just increased…Denver has just now increased the number of licenses that they’re allowing, and those licenses are specifically in neighborhoods of lower inequity. I’ll say, yeah, social justice licenses. That’s right. So, they’ll always be that.
There’ll be a place for that, and I think there’ll always be a place for flower. And I think flower will probably play in that world more so, but I believe: look, we live in America. This is the American way. Do I want it to happen? That’s a different question. Do I think it will? Yes, I do think it will happen. This is how America works, and I believe there will be a part of the industry, which will be taken over by alcohol, pharma, and tobacco. Still, I also think there’ll be another part of the industry, whether you want to call it craft or call whatever it ends up being. The industry is mindful enough to keep a place for the legacy players, but there’s no doubt that pharma, alcohol, and tobacco will be challenged. I hope that they can play together and both succeed.
We have a similar belief that it is the craft model where, if you look at craft beers, where people who are willing to pay a premium know it’s organically grown. Knowing where it’s sourced from, that there’s a living wage.
Hopefully, that craft component will allow the legacy element to continue, right? And I truly believe that will happen. But, unfortunately, there are too many people in the industry, both actively participating and at the lobbying level, to just fully allow pharma, alcohol, and tobacco to come in and just level everything that’s been built. So I don’t see that happening, but I see them coming in and taking a piece of it. No doubt.
Yeah. I mean, it’s interesting because, in Europe, we’ve seen big corporate come in and take over, right? So, many Canadian companies came in and secured the licenses for countries so that locals couldn’t participate. So, locals couldn’t compete with that, and then, on top of that, you have, again, economies of scale. So, they can grow bigger, faster, and cheaper ultimately, right? which will impact the deliverable to the market, the price structure, and all that. So, we’ve seen it here.
Interestingly, there have been several conversations that I participated in, or at least listened to, regarding clubhouses where they talk about the quality of flower in Canada. Well, they talk about the flower quality in Canada versus the U.S., and they say there’s no comparison. That all of the big companies do not grow the quality of flower that the U.S. does, but, on top of that, they also talk about how black market growers or legacy growers in Canada are the ones that are growing the quality cannabis. And that this is a big issue for the Canadian market now because those interested in flower and quality flower are still purchasing on the black market and not purchasing through the regulated market. So, there is a movement about the economies of scale, and robo grows that. They’ve been called and so on not producing the quality of product, but it’s interesting. It’s, again, I think that’s the same conversation.
It’s like there are some people that just absolutely are into their craft beer, and they would just never drink a Budweiser because it’s just not up to their taste level, and they cannot believe it, right?
There you go, right? Yeah. So, it’s intriguing, and I think we’ll see the same segmentation across the board, and even further, I mean just in beverages, right? Now you see, which is just killing it in marketing and promoting. Ellen Degeneres just spoke about can[nabis]. She’s an investor. She just talked about it on her show. So, they’re coming in the market at two megs of THC, but then you’ve got other companies, like major, coming in with a hundred bags of THC. So, there are many different types of consumers, and you can even see that just in the product offerings. Why would someone buy a beverage with a hundred megs? And someone would buy a beverage with two. It’s a 50 times difference. It’s just insane, but there are those different types of consumers.
The people who drink monster, right?
Exactly. Not to digress, but the one area that I think we might have skipped over that I’d like to visit before we end this was you brought it up with Ellen is this idea of the cannabis celebrity. I think Martha Stewart has a line; I know that Cheech & Chong has a line, Jay-z’s coming into the business.
Oh, he’s in there.
Yeah. So, I mean the list, the laundry list of celebrities, and Mike Tyson, I think, right? So, what is the celebrity brand, and why is that an attractive factor?
Well, it’s not for me. I’ll say that. And to somebody, right? Because, I mean, otherwise they wouldn’t be doing it. I don’t know how long that’s going to last. I just don’t know. Sure we’ve seen this in the alcohol business, right? George Clooney and so on. Everybody’s got a tequila brand and that sort, which if you’re really into the cannabis industry, you’ll understand who Scherbinski is, but, if you’re not, and Mike Tyson appeals to you, which is why I don’t know, but okay, yeah, if he does, right? Well, and he may appeal to you as a boxer, but how does he appeal to you as a cannabis entrepreneur and cannaseur? I don’t know. Belushi makes that same claim. I could go down the list. They’re all there. This past week, Seth Rogen just came out with house plans and was on the Stephen Colbert show, talking about house plants. So, when you have the late-night show on CBS and Stephen Colbert having his guests talk about his new cannabis company and Ellen speaking about it on her show, we’ve truly arrived at a very new place within the last couple of months.
So, let me speak to this for a moment. I like celebrity brands only because they get celebrities talking about cannabis, which gets the average person interested or on edge; in some way peak their interest. Peaked relative to cannabis. I want to reach people that may not have otherwise been reached.
That’s right. So, all the folks at home watching Ellen Degeneres during the middle of the day. Now she’s talking about, “hey. You’ve got to check this new product out. It’s great. My friend, Chelsea Handler, had a great weekend with my girlfriend or wife, Portia de Rossi, and now, all of a sudden, it’s a big celebrity fest, and they’re all saying you should try this. That makes a difference. So, from my perspective, that helps the industry, but is it really about what brands are? No. I don’t think so. I have never been a fan of endorsements, and I’ve seen endorsements go bad in so many ways. David Beckham endorsed so many products that nobody even remembered what brands he stood for.
I lived in Chicago, and Michael Jordan, if you paid him, he would endorse anything, right?
Exactly. And there’s that. And then I’m just trying to think off the top of my head what celebrity went off the deep end and took a brand with them. Multiple brands have experienced that, so, yeah, where they have [had] to distance themselves from the celebrity who’s created something, right? So tying a brand to one person is just, in my opinion, it’s a very risky business strategy. It may get you eyeballs initially, but at the end of the day, if it’s that person’s, that’s yeah.
I think Tiger Woods would be a good example of this.
There you go. That’s a perfect example. Fortunately for himself, he’s been able to come back, but yeah, that’s exactly right. So, I just think there are other ways to promote brands. Again, many of the archetypes I spoke about earlier. There are charitable brands; I mean there’s a brand called Farmer and the felon, which is made by Cannacraft, the owner, one of the owners of Canacraft, since [he] spent six years in jail, he came out to create the largest cannabis company in California with multiple brands: CBD care by design, Farmer and the felon hi-fi hops, which is a collaboration with Lagunitas, which Heineken owns. So, this guy came out as a felon, is cutting deals with Heineken and Lagunitas, but created a brand that gives back to the last prisoner project that fosters some great things happening in the industry. So, I think some brands can do things like that; very gender-based brands. There are many other ways that brands can sort of really do things other than paying another celebrity half their investment to be the face of their brand. It just seems so unnecessary.
Well, Dave, we very much appreciate your time. Remind us of the title of the book again. The book is called “Branding Bud – the Commercialization of Cannabis. And where can we find it?
You can find it on Amazon, Barnes & Noble, and Books-a-Million.
And if we want to learn more about you, where would we go?
Again we very much appreciate your time. It was an enjoyable conversation. We learned a lot. We recommend you go out and read the book and get a little bit of the history of how we ended up where we are today. We would love to have you back, and we’ll have this conversation in a year, and I guarantee it’ll be completely different.
I agree and look forward to that conversation.
Thank you, David. Thank you for your time.
Thank you, Patrick. I appreciate it.