Marijuana, weed, grass, mary jane, or whatever you want to call it is on the proverbial “come-up,” with celebrities like Snoop Dogg, Willie Nelson, Wiz Khalifa, Melissa Etheridge and more promoting brands of their own, this is the ground floor. The money involved in this burgeoning industry is undeniable, and as Attorney General Jeff Sessions continues his tirade of what many are referring to as “reefer madness,” marijuana marches on.
In the most recent election cycle, five states legalized pot in some form. As it stands, eights states have passed bills to legalize recreational marijuana use, some 23 states and District of Columbia have passed laws that allow some form of medicinal use and another 14 states have taken steps to decriminalize the substance. While the federal government is painting with a broad brush, the tax revenue is making its mark in the places where legal.
Sure, some illegal pot is cheaper, but don’t you want the “good stuff?” For that, there’s a premium, and by premium I mean taxes. For instance, Colorado weed carries a 28 percent tax, Washington (which also happens to be home to the first municipally owned pot shop) 37 percent and in Oregon the rate ranges from 17-20 percent. California, a state that has provided medicinal marijuana for 20 years, brings in nearly $50 million annually in tax revenue from the sale of the sticky green plant. Putting into context the projections in place, there are billions of dollars at stake.
The marijuana industry organization Arcview Group partnered with New Frontier Data to create a market forecast, and the numbers certainly have a bit of a ‘wow’ factor. The projection notes that by 2020, this could be a $21 billion industry. “Can we put the genie back in the bottle? Most people would say no,” said Giadha Aguirre De Carcer, founder and CEO New Frontier Data told CNN.
Using California as an example, the same study sees the state’s annual sales of the substance surpassing $7.5 billion ($4.3 billion recreational / $3.3 billion medical). It’s also important to remember that it’s not just those growing, transporting and selling the plant that profit – all the ancillary industries make money. Like marketing, security, accounting and financial services, for example.
Poll after poll illustrates the growing public support behind this phenomenon, so what’s the hiccup? One of the cannabis industry’s largest hurdles is branding – funny right? A recent piece from Laurie Peterson recounts her experience with some of the industry’s biggest players at a recent conference, where the focus was “getting around the ‘reputational risk’” of being involved in the industry.
The event’s organizer, president and founding partner of Viridian Capital Advisors Scott Greiper, explained, “This is not a normal business. It’s federally illegal…I don’t want my kids thinking I’m a drug dealer.” The solution, per Greiper, is a rebrand. By avoiding the pitfalls of classic stoner culture or even more modern stoner culture, and as an industry taking a more Corporate Social Responsibility (CSR)-centric approach with a focus on the plant’s medical benefits, social change and social justice there’s a real opportunity.
Some of the other branding challenges for the cannabis industry include consistent product— picking just the right memorable imagery and name while marketing in a meaningful way. It’s easy to get caught up in ‘Cheech and Chong’ jokes, but if the industry is to be taken seriously, it must take a serious approach.
Former Mars CEO Don Robinson, now CEO of Oregon-based Golden Leaf Holdings, told Media Post, “We are manufacturing in an FDA-controlled environment, even though it’s not required…Our competitive strategy is all about brands … economies of scale and R&D…R&D is coming into the category like a tidal wave.”
It is still early stages here, but this market will not take long to mature, and then we can avoid a new generation of childish 4/20 munchies jokes. Though legalization on the federal level is still a ways out, the industry has much room to grow. From a branding perspective, the time is now to stake your claim. A number of brands have planted flags, and are expected to do big things, but for all intents and purposes this industry remains wide open. Branding one’s business appropriately can help in a big way.
Happy 4/20. Celebrate responsibly. :)
Any questions or comments? Let’s keep the cannabis branding back and forth flowing, join the fray below…