The Cannabis World Just Changed.
April 2024 might go down as one of the most pivotal months in cannabis industry's short history.
We’re back after a couple of busy weeks, so buckle up for a longer and more in-depth CannabisCMO.
Reflections on 4/20
I don’t know about you, but I was still recovering (and very much still catching up!) from 4/20 week when last week’s news dropped from the DEA.
I’ll get into a little bit more about that in a minute, but let’s start with some reflections on the busiest 4/20 we’ve seen as an industry.
Despite it being the busiest week of the year for many operators (we’ll get into that shortly as well), I was actually in Washington D.C. lobbying on behalf of an equitable cannabis industry with members of the Marijuana Justice Coalition as well as many other advocacy organizations during Last Prisoner Project’s 420 Unity Day of Action and the National Cannabis Festival.
We even got a chance to meet Majority Leader Chuck Schumer (D-NY) in his Capitol office directly across from the Senate floor to talk about the reintroduction of the Cannabis Administration & Opportunity Act (CAOA), which is a bill that would de-schedule cannabis at the federal level and begin to repair some of the harms done to black and brown communities over the course of 90 years of prohibition.
In addition to getting a chance to lobby some congressional offices to join on as co-sponsors of the CAOA, I also attended a super powerful and inspiring candlelight vigil that was held in front of the White House in honor of those who remain locked up for cannabis while so many of us are spending our days trying to figure out how to sell more legal weed.
At the vigil we heard from folks like Kyle Page and Donte West both whom had been previously incarcerated for marijuana, as they shared stories of hardship as well as triumph and redemption from the stage as a crowd gathered around in Lafayette Park.
In the midst of a few flight delays on my way home to my girls, I was able to stop and reflect on this inspiring trip and how it helped to remind me of why it I got into this movement in the first place — to end cannabis prohibition once and for all so that our friends and family are no longer considered criminals.
I think it’s critical for marketers to take time to regularly immerse themselves in cannabis advocacy.
There's a familiar refrain that "marketers ruin everything," a cautionary statement that underscores the impact of commercialization on authentic cultural symbols.
As 4/20 becomes increasingly mainstream, there's a genuine risk that its rebellious, countercultural roots could be overshadowed by sheer commercial greed. This day, pivotal in symbolizing freedom and resistance against unjust drug laws, must not be diluted into merely another consumer-driven event.
As marketers in the cannabis industry, we have a crucial role to play.
We must consciously steer our strategies to avoid stripping 4/20 (and cannabis culture) of its significance and spirit. This involves crafting campaigns that do more than drive sales; they should educate, engage, and inspire activism. It's essential that our marketing not only respects but amplifies the foundational ethos of 4/20—standing against the establishment, advocating for those still impacted by prohibition, and fostering a community that values justice as much as it does profit.
Let's not be the ones who ruin 4/20 by detaching it from its roots.
Instead, let us be the stewards who use our skills to further enrich and enliven its story and significance.
Record Breaking Sales Day
As we digest the numbers from this year’s 4/20, it’s evident that our industry is not just growing—it's thriving in ways that exceed expectations (and that’s before an upcoming move to Schedule III).
Both COVA and Leafly, have released comprehensive reports that shed light on the sales dynamics of the most significant day in the cannabis sales calendar.
These reports offer a deep dive into the sales numbers and consumer trends this 4/20, providing us with invaluable insights. They are both worth your time to check out.
Here are the standout highlights from each, which not only illustrate the day's financial success but also the shifting preferences of our consumer base:
From the COVA report, here are five key highlights that stood out:
Missouri's Market Boom: Missouri dispensaries led the charge with the highest average sales per store, recording a remarkable $42,401 in revenue, reflecting a 19% increase from the previous year.
Impressive Transaction Volume: COVA-powered stores processed a total of 282,572 transactions on 4/20, marking a substantial increase and highlighting the efficiency and reliability of their POS systems during peak demand.
Canadian Sales Surge: In Canada, Newfoundland outshined other provinces by achieving the highest sales per store, with a 3% increase from the previous year, showcasing the expanding market reach.
Record High Transaction: The highest single-sale transaction recorded was a $3,325 purchase at a medical dispensary in Colorado, illustrating the high spending capacity of some consumers during this key holiday.
Robust System Performance: COVA was sure to boast about their 100% uptime, a critical factor in their POS system's ability to handle the surge in transactions without any disruptions, contrasting with competitors who struggled.
From the Leafly sale analysis, we gleaned these intriguing data points:
Beverage Category Explosion: Cannabis-infused beverages saw an astonishing 206% growth in unit sales, indicating a burgeoning interest in alternative consumption methods.
Floral Dominance: Despite new products entering the market, flower remains the top-selling category, underscoring its enduring popularity.
Vape Pens Dip: Surprisingly, vape pens saw the lowest increase in sales, suggesting a possible shift in consumer preferences or market saturation.
Edibles Pricing Dynamics: Edibles experienced the biggest percentage decrease in average item price due to aggressive discounting, yet they ranked in the bottom three for sales growth, pointing to a complex pricing strategy.
Market Adaptability: The Leafly report highlighted how retailers adjusted discounts and promotions to navigate consumer expectations and maximize revenue, demonstrating a strategic response to market demands.
The coolest thing about the Leafly report was this timelapse video of real-time sales on 4/20:
Dutchie Goes Down…Again 🙄
However, despite the historic sales day, it was not without its technological hurdles.
If you felt like you needed to do a double take when you saw this headline from MJBizDaily, don’t worry — you weren’t the only one.
For at least the second (I saw some say the third) year in a row, Dutchie went down on the busiest sales day of the year. In 2023, they also had a high profile outage after a “series of cascading failures”.
The recurring issues with Dutchie's POS systems, which suffered outages during crucial sales hours this year, caused significant disruptions for many dispensaries. Retailers reported extensive losses, with some estimating up to $80,000 in missed revenue due to these outages.
Such technical failures not only impact the bottom line but also risk damaging the trust and loyalty of consumers who expect seamless transactions during high-traffic periods like 4/20 — leaving a lot of dispensary owners upset and unable to do much of anything to make their customers happy in the moment.
Just a quick cruise through LinkedIN after Dutchie’s epic failure revealed that their brand is quickly becoming known for not being able to hold up under pressure:
One thing is for sure — Dutchie’s competitors smell blood in the water and it will be interesting to see if they are able to retain their market dominance after repeated failures and recently being forced to raise money earlier this year at an 89% discount from their previous valuation.
What does Schedule III mean for marketers?
Last week’s news from the DEA that they are taking HHS’s recommendation to move cannabis to Schedule III is objectively the biggest shift in federal cannabis policy in our lifetimes.
As someone who has spent most of my waking hours devoted to ending federal, state and local cannabis prohibition since 2011, I can’t help but feel the gravity of this decision by the Biden administration.
That being said, there are a lot of reasons that Schedule III is not even close to enough for those who care about more than just making money in this industry.
I won’t go into detail in this newsletter, but if you’re interested in hearing my thoughts, I recorded a podcast with my good friend Cat Packer of Drug Policy Alliance.
I also put out this quote as part of the Marijuana Justice Coalition and will be writing more about this in my other newsletter KalikoVision which you can sign up for below:
“While today’s proposed change to the federal status of cannabis marks a significant shift in the federal government’s approach to marijuana policy and will have positive effects for small businesses who have been paying a discriminatory tax rate, it falls out of alignment with science and a majority of the American people who believe that cannabis should be treated more in line with tobacco and alcohol — and most importantly, that no person should be locked in a cage for possessing a plant.” - Board Member, Better Opportunity to Win Legalization (BOWL) Kaliko Castille
Aside from the discussion that Schedule III will not stop any arrest for marijuana possession or distribution, the biggest news for the cannabis industry (and for cannabis marketers) is that this reclassification would automatically do away with 280e, an arcane 1980’s tax law created to stop cocaine dealers from writing off their yachts on their taxes but most recently applied to dispensary owners stopping them from writing off normal business expenses like marketing.
This means that marketing budgets are likely to increase in the coming months (after an official scheduling change) as dispensary owners start to figure out how to take advantage of this new free cash flow.
One estimate from the Cannabis Marketing Association last year, said that cannabis companies allocate between 0.5% and 1.5% of their overall annual revenue to marketing — compared to a Gartner report that showed mainstream industries allocate closer to 9%.
While we may not see that full 500% increase immediately, but it’s pretty eye opening to think about how much growth there is yet to be seen on the marketing side of the cannabis industry after a scheduling change.
A Call to Action.
As we close this edition of CannabisCMO, I’m personally thrilled to be part of such a pivotal moment in cannabis history.
The records shattered this 4/20 are not just numbers; they're a testament to the growing influence and normalization of cannabis in our society. However, with this progress comes profound responsibility.
We stand at the crossroads of writing the final chapters to over 90 years of cannabis prohibition—a policy that has disproportionately devastated communities of color.
Now, more than ever, we need to ensure that as we move forward, we do so with a commitment to fairness and equality. This isn't just about business; it's about correcting past wrongs and ensuring that the future of cannabis reflects the diversity and resilience of those who suffered most under those racist laws.
Soon the DEA will open up the public comment period on their proposed rule change. This is a chance for all of us to make our voices heard. I hope that you will take this opportunity to say that “Rescheduling is not enough and that descheduling is the only answer that is both in line with science and majority of the American people who believe that no one should be in jail for possessing a plant.”
My good friends and I are organizing under the banner United for Marijuana Decriminalization and will be putting out a tool to make it easier for folks to submit their comments, so please make sure you are ready to submit yours.
Let's use our influence to foster an industry that uplifts all, not just a privileged few. Together, we can build a legacy that we're proud to pass down—a market that is as just as it is profitable.
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NBA Legend Carmelo Anthony Launches Cannabis Brand And Agency - Forbes
NBA star Carmelo Anthony has launched his own cannabis brand, StayMe7o, and a new agency, Grand National, aiming to redefine cannabis branding and marketing. Set to hit the shelves in Oregon initially, Anthony's venture, in collaboration with Lowd Cannabis CEO Jesce Horton and creative director Brandon Drew Jordan Pierce, brings together expertise from cannabis cultivation to creative advertising. The agency will focus on crafting unique brand identities and strategies in the highly competitive cannabis market, emphasizing quality and innovation. Anthony, a long-time advocate for cannabis education and benefits, is also committed to supporting minority-owned cannabis businesses and contributing to social causes related to the War on Drugs through partnerships and community engagement.
My thoughts:
For anyone who has been following the career of Jesce Horton, the CEO and Founder of LOWD and the founding President of Minority Cannabis Business Association (MCBA), it’s not surprise that he landed such a high profile partnership with NBA legend and former Portland Trail Blazer Carmelo Anthony.
As an Oregonian, I’m a big fan of what Jesce has put together over at LOWD, including the top-shelf flower his team produces out of their Portland warehouse. I’ve been fortunate enough to personally visit the facilities and see his team working on their craft and it is clear that Jesce has laid out a vision that his team buys into.
LOWD has a lot of creative and unique ways of marketing their premium flower that allows for them to maintain as much value at the point of sale as possible. One of the campaigns that I’m a big fan of is their Smoke Like A Grower campaign. It gives consumers an opportunity to smoke head stash quality weed but only if they are signed up for the newsletter, rush out to one of a handful of dispensaries stocked up with the latest drop and say the secret password provided in the exclusive email. The best part? Your flower comes in a high-quality, opaque glass jar so that it stays protected from the harmful UVs that will break down your cannabis over time.
The news about the launching of Jesce’s Grand National agency is actually something I’m really excited about. We need more people who understand the culture around this plant helping to advise and build the brands of the future. I’m working on getting Jesce on the podcast to talk more about their plans. So stay tuned.
Legacy to legitimate: Moja Life poised to be Trenton’s first legal marijuana dispensary - Trentonian
John Dockery, the CEO and founder of Moja Life, is transitioning from underground cannabis sales to leading Trenton's first legal marijuana dispensary, Moja Life, set to open on Warren Street. With over two decades of experience in the field, Dockery leverages his deep understanding of cannabis quality, aiming to set his dispensary apart from corporate competitors with a personal touch and community focus. Emphasizing his local roots and community connections, Dockery is determined to enhance downtown Trenton's appeal and contribute positively beyond the cannabis industry. Moja Life also represents a commitment to "one life," inspiring a better lifestyle for the community.
My thoughts:
This story is truly inspiring and with Moja Life being one of my clients at ThndrStrm Strategies, I’m particularly humbled to be able to watch this story unfold in real time.
I’ve spent the last 6 years working on social equity policy and John’s story is exactly the type that we want to see when it comes to helping communities who were most affected by cannabis prohibition get a chance to benefit from the legal marketplace.
Last fall I had a chance to travel out to Trenton for MCBA’s Equity Workshop Tour and it just happened to be around the block from Moja Life. In just the short couple of days I was around, I watched as countless people honked their horn or pulled over to say hello to John as he was outside the shop or walking me around the neighborhood. It was clear that he is already a staple in the community and that once his shop is open that the town is really ready to support him.
We’ve been quietly building out the Moja Life Instagram and posting behind the scenes videos as we prepare to open so make sure you follow along as we open up the very first licensed (social equity or not) dispensary in Trenton, NJ!
Cannabis Industry Blogs + More Headlines:
Brands rolled out the green carpet for 4/20 this year - Marketing Brew
The Cannabis Market Is Booming in Japan - High Times
Inside Grön's Marijuana Edibles Factory - Benzinga
New Florida cannabis market projections show massive recreational potential - Green Market Report
Cannabis industry celebrates strong 4/20 – despite software challenges for some - Green Market Report
New York’s Illicit Cannabis Market Could Finally Be Brought Down As Sweeping New Powers Introduced - Business of Cannabis
Brands And Advocacy Groups—From ACLU To KFC—Launch 4/20 Promotions To Mark The Marijuana Holiday - Marijuana Moment
How CannaCribs' Creator Is Shaping Social Media With Influencer Marketing - Benzinga
Wrap Up:
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