CannabisCMO Week 4
Flow Kana ceases operations, Out-of-state brands are entering New York, and interstate commerce might be coming sooner than later...plus, what would you do with $7 million?
Aloha and Happy Monday!
$7 million.
That’s the going rate for 30-seconds of air time during the Super Bowl game between the Kansas City Chiefs and the Philadelphia Eagles this weekend.
Last year, a record 112 million people tuned in to watch the big game with that number likely to increase this year.
As the number of viewers has increased each year, so has the price of a 30-second ad spot.
In 1967, during Super Bowl I, the price of a 30-second ad was $42,500.
This weekend, it will cost every brand that wants to be the center of attention $233,333 PER SECOND.
That’s more than the cost of five Super Bowl I commercials — per second.
There are varying opinions about the effectiveness of this ad buy but it is generally accepted in pop culture that buying an ad during the Super Bowl will definitely help you gain brand awareness.
With 100 million+ people watching how could it not?
I mean, there is a reason why Budweiser advertises every year — as this article from Stanford Business lays out:
For example, the researchers estimated that Budweiser earns an extra $96 million from their ads, receiving a return on their advertising investment of 172 percent. Anheuser-Busch — the producer of Budweiser beer — has held exclusive rights to national beer commercials in the Super Bowl for more than 20 years.
However, another study from 2017 showed that 80% of Super Bowl ads fail to change consumer opinions/intentions and only 10% of consumers remember the average Super Bowl ad and know the brand being advertised.
For the sake of argument, let’s contrast that with other comparable (in reach) digital brand activation opportunities.
Enter, Mr. Beast.
If you don’t know who Mr. Beast is, he is a YouTuber, philanthropist, and internet personality known for giving away huge sums of money on his channel through stunts and games.
His YouTube channel has 132 million subscribers, making it the largest channel on the platform.
Last year, he spent $3.5 million recreating scenes from the popular Netflix series Squid Games, where contestants competed for cash prizes — a video that currently has over 359 million views.
And just over a week ago, he released his latest video where he paid for 1,000 people suffering from blindness to have corrective surgeries done to restore their sight. In just 8 days, it already has 91 million views.
So when I saw his tweet response to the historical breakdown of Super Bowl ad rates, it made me think.
If I was in charge of a brand that has $7 million to spend, would I blow it all on a Super Bowl ad that potentially only 10% of people who actually saw it will be able to recall?
Or would I find a digital personality like Mr. Beast who could not only expand your initial reach but keep you relevant for years to come?
As a direct comparison, he spent $3.5 million to drive 359 million views of one of his videos.
That’s half the cost of this year’s Super Bowl ad rate for 3x the impressions (if the Super Bowl ad had 100% viewing rate, which it doesn’t).
Of course, neither the Super Bowl nor Mr. Beast will likely be promoting cannabis brands any time soon, but it’s important to use this as an example of how marketers need to always be thinking strategically and creatively rather than chasing vanity opportunities.
However, as long as people are spending money on Super Bowl ads, I’ll be watching them!
Now let’s get into this week’s #CannabisCMO.
Top Headlines:
#1: Celebrity Star Power Has So Far Had Limited Impact on Cannabis - Bloomberg
Celebrities, such as Jay-Z, Justin Bieber, Gwyneth Paltrow and Rosario Dawson, are trying to enter the cannabis market with high-profile product launches and collaborations. However, their products are facing challenges such as a crowded market, tumbling prices, a thriving legacy market, and a complex patchwork of rules that vary from state to state. Additionally, the cannabis market is highly fragmented, and many retailers have reported that celebrity-backed brands are struggling to compete with bigger labels.
My thoughts:
I’ve lost track of how many celebrities have gotten into the cannabis industry over the last decade but you can count on one hand how many of them have been successful.
The truth is, celebrity brands (and any others for that matter) are only as good as who they are partnering with and what they’re putting out. It’s not like Iron Mike is tending to the garden every day.
I remember when Marley Natural hit the scene a handful of years ago and it was criticized for less than stellar quality. It quickly tarnished a name that most directly associate with cannabis — has anyone actually tried any lately?
Some of the best examples of well thought out celebrity brands are ones that don’t actually carry the celebrities name or likeness like Viola (Al Harrington), Houseplant (Seth Rogen), and Cookies (Berner) which goes to show that successful businesses are not purely vanity plays.
#2: Former California industry leader Flow Cannabis Co. ‘mothballed’ as it seeks to ‘survive’ - MJ Biz Daily
California-based cannabis operator Flow Cannabis, often referred to as Flow Kana, has suspended operations after running out of cash. The company burned through $24m in 2021 and reported sales of $11m, according to investor updates. Flow has leased some licensed facilities to other companies and is attempting to sell real estate, and could eventually be sold or merged with another company, said board member Kevin Albert. The company was once one of the leading cannabis businesses in the state, but faced difficulty in the market with difficult conditions, high taxes and product oversupply.
My thoughts:
This is a dramatic turn of events for a company that once was trying to position itself as a the “Whole Foods of cannabis” based on a business model they said was inspired by the way that Sunkist had organized a cooperative of orange growers in Florida.
At one point, Flow Kana was the talk of the industry and I was a regular customer. I enjoyed all of the small farmers that they were helping get to market.
I feel bad for all of the craft growers who were brought into the Flow Kana ecosystem with big hopes only to be let down.
Grower cooperatives may still be a viable option to make sure that craft growers are able to thrive in the marketplace, but there is no doubt that any negative experiences with Flow Kana may put a damper on folks’ enthusiasm.
#3: Out-of-State Brands Already Entering New York Cannabis Market - Green Market Report
New York’s recreational cannabis market, which has only just begun, is already seeing competition from outside the state. According to a report from the Green Market Report, two of the 12 marijuana product brands available at the state's two operational adult-use retailers (Housing Works and Smacked Village) are from out of state, entering via intellectual property licensing deals with one or more of the state’s 40 processors. Some 280 licensed farmers have also reported being approached by out-of-state brands, which could result in a saturation of the New York market with national brands and create far more competition for local brands.
My thoughts:
An interesting look at how many “national” brands have managed to gain such a large footprint so quickly. By licensing out their brand intellectual property to local partners.
This is something that you see across the country due to the patchwork of laws and is why some brands can be in multiple states without owning any licensed facilities.
New York has always had the best of intentions when it comes to giving first dibs to social equity licenses and small businesses from New York, but as someone wiser than me once said, “money is like water” — it always finds a way through the cracks.
From a social equity standpoint, this isn’t a great thing — but it goes to show how tough it is to set up an equitable market when so much money is at stake.
#4: California Officials Take Key Step Toward Interstate Marijuana Commerce, Requesting Legal Opinion On Federal Risk - Marijuana Moment
The Department of Cannabis Control (DCC) in California is seeking guidance from the state's attorney general’s office on the possibility of allowing interstate marijuana commerce, as this could put the state at risk of federal enforcement action. The request is a key step that could trigger a law signed by Governor Gavin Newsom last year which authorizes him to enter into agreements with other legal states for import and export of marijuana products. DCC's letter to the attorney general contains an analysis that shows the state would likely avoid federal legal issues by clearing the way for such commerce across state borders.
My thoughts:
With the likelihood of federal cannabis prohibition ending during this Congress being slimmer than the chances I’ll never consume cannabis again, the conversation around interstate commerce is going to pick up steam in 2023.
Oregon was the first state to pass a bill clearing the way for interstate commerce in 2019. Last year, California passed a similar bill. Since then, we’ve seen a Senate Committee in Washington state approve a bill and the Senate President in New Jersey introduce a bill along the same lines.
It is very clear that this idea is picking up momentum among advocates and more importantly — state legislators that see their industries struggle.
This will be an important conversation to watch as we prepare for the future of our brands and whether a national cannabis market might come sooner than later if the states apply external pressure through their own compacts.
Cannabis Industry Blogs + More Headlines:
Got a marketing blog you’d like us to highlight? You can submit them here.
Is Your Cannabis Business Ready for Google Analytics 4? - Grasslands
The Power of PR in a Downturn: Why Your Cannabis Business Needs It Now More Than Ever - Greenlane Communication
Celebrity brands can learn a thing or two about authenticity from JuJu Royal’s Michigan launch - MJ Brand Insights
Gold Flora Expands Jetfuel Cannabis Brand in California - Highly Capitalized
A Very Bad Joke Ends - New Cannabis Ventures
Ultimate Guide to B2B Email Marketing in the Cannabis Industry - CannaBiz Media
Maximizing Sales, Trulieve's Gina Collins Unveils Tips On Understanding Cannabis Buyer Personas - Benzinga
Brady Cobb Wants Sunburn to Become Florida's De Facto Cannabis Brand - Green Market Report
Mainstream Marketing Chatter:
Budget woes getting marketers down? Make the most of it, experts say - Marketing Brew
What CEOs and CMOs want from each other, how to bridge the trust gap - CMO Alliance
Why digital clutter is driving brands to rethink the value of newspapers advertising - Digiday
The Fast and Easy Way to Generate Leads on LinkedIn - Social Media Examiner
Elon Musk says that Twitter will start sharing ad revenue with creators ‘today’ - Tech Crunch
Marketing Jobs:
2023 Events:
Got an event we should list? Submit it here.
Future of Cannabis Marketing - February 7 (Virtual)
Revelry Winter Conference - February 25th (New York)
New England Cannabis Convention - March 10 - 12 (Boston)
Cannabis Science Conference - April 19 - 21 (Portland)
MJUnpacked - April 26 - 28 (New York)
Hall of Flowers - May 3 -4 (Santa Rosa)
Vermont Cannabis Convention - May 6 - 7 (Burlington)
Connecticut Cannabis and Hemp Convention - May 20 - 21 (Hartford)
Hall of Flowers - May 31 - June 1 (Toronto)
CWCBExpo - June 1 - 3 (New York City)
Cannabis Conference - August 15 - 17 (Las Vegas)
MJBizCon - November 28 - December 1 (Las Vegas)
Junk Drawer:
Cann goes to Harvard
Cann co-founder Luke Anderson recently posted on his LinkedIN about how they were actually featured in a case study in the Harvard Business Review! You can download the case study, Cann: High Hopes for Cannabis Infused Beverages here.
Seth Rogen credits wife for success of Houseplant
In a recent interview with People Magazine, Rogen talks about how his wife helped get him into pottery and how Houseplant “might not exist” without her encouragement.
Gridiron Greats come together for celebrity golf class on Super Bowl weekend
The charity tournament will benefit The Gridiron Greats Assistance Fund, a national nonprofit with a mission to assist retired NFL players and their families in dire need situations.
Judge: Banning guns for marijuana users unconstitutional
From ABC News: “A federal judge in Oklahoma has ruled that a federal law prohibiting people who use marijuana from owning firearms is unconstitutional, the latest challenge to firearms regulations after the U.S. Supreme Court’s conservative majority set new standards for reviewing the nation’s gun laws.”
Wrap Up:
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