Branding Bud: The Commercialization of Cannabis

INTRODUCTION

OVERVIEW, PURPOSE AND OBJECTIVES

Branding Bud: The Commercialization of Cannabis was created with several objectives in mind. While seeking to learn more about a new category of cannabis-infused consumer packaged goods, I was also curious to see how products were packaged (and how that varied across States), as well as what were the inspirations and who are the people behind these new brands.

In seeking to find the answers to the above questions, I was also concerned about product safety and consistency; issues surrounding responsible use and education; and most importantly, assuring our children and society as a whole is protected.

To delve a bit deeper into the book’s objectives, I relied on the following pillars:

Present a critical overview of legal cannabis products and their packaging

Promote the awareness and responsible use of cannabis

Support safe, consistent cannabis products, programs and policies

Raise the industry bar through standards and best practices

Educate and protect the safety of our children

While seeking to sort through the overwhelming lack of and/or conflicting evidence on cannabis consumption, efficacy, possible dangers, and addictive qualities—my intent was to be fair and objective in presenting the historical and political aspects of cannabis, in order to set the stage for a critical review of the current State legal cannabis products in the U.S. market today.

PRESENT A CRITICAL OVERVIEW OF LEGAL CANNABIS BRANDS

Branding Bud is focused on the branding and packaging aspects of the newly developed legal U.S. cannabis products segment. Designed to review the brands’ inspirations, areas of expertise and core competencies, as well as their respective founders’ backgrounds, the book seeks to:

Present a cursory review of the past and present political and historical state of cannabis.

Briefly touch upon the types of cannabis, their chemical components, and typical efficacy.

Contextualize cannabis use from the 18th century to its influence on today’s pop culture.

Delineate various cannabis form factors, means of processing, and ways of consuming.

Cohesively layout the current state of legal U.S. cannabis and cannabis-infused products.

Create industry standards that bring this segment in line with other CPG industries.

This book will not:

Discuss the efficacy of cannabis products.

Compare and contrast any particular products.

Create a rating system in which any specific products are promoted above others.

Denigrate or disrespect any products, categories, and/or brand owners.

While the book is focused on branding and packaging—and utilizes materials from the brands describing their products—the book also contains objective information from various testing labs and reports from credible associations, journals, and research firms designed to objectively inform the reader about the products reviewed.

PROMOTE THE AWARENESS AND RESPONSIBLE USE OF CANNABIS

We hope to eliminate the stigma attached to consuming cannabis, by promoting general awareness, responsible use and public safety education. To that end, there is a list of resources and contacts included at the end of the book.

SUPPORT SAFE, CONSISTENT CANNABIS PRODUCTS, PROGRAMS AND POLICIES

While public opinion is changing, as denoted throughout this book, there is concern from lawmakers and consumers alike on the dosing and consistency of the cannabis products currently in the market. The Journal of American Medicine (JAMA), published an article in June 2015 titled, Cannabinoid Dose and Label Accuracy in Edible Medical Cannabis Products, and summarized that Edible products from three major metropolitan cities including Seattle, San Francisco and Los Angeles—(oddly, Denver was not included)—though unregulated, failed to meet basic label accuracy standards for pharmaceuticals.¹

Such products may not produce the desired efficacy and/or relief required. Other products contained significantly more THC than labeled, placing consumers at risk of experiencing adverse effects. Because medical cannabis is recommended for specific health conditions, regulation, consistency, and quality assurance are required. As medical and recreational markets continue to grow, it will take large amounts of outside scrutiny and self-regulation of cannabis products and their labeling, packaging, dosing, and consistency. This will be critical to the growing acceptability among lawmakers and consumers alike.

RAISE THE INDUSTRY BAR THROUGH STANDARDS AND BEST PRACTICES

Typical business practices suggest looking for deep expertise in one’s own industry to solve a problem. As business models transform and evolve, organizations can learn from other industries and businesses regardless of the business they are in. Cannabis entrepreneurs should not recreate the wheel. Rather, they should look outward toward other industries to select the best practices and standards to ensure quality and consistency.

EDUCATE AND PROTECT THE SAFETY OF OUR CHILDREN

Every parent should have a conversation with their children about what cannabis is and what it isn’t. Children need to know that unless they are medical cannabis patients, they must not use cannabis. If you have older children at home, they need to know they can get in legal trouble for possessing, selling, or giving away cannabis.

The Federal Government’s 2013 Cole Memorandum² listed, Preventing the distribution of cannabis to minors,, as one of its enforcement priorities in allowing state cannabis programs. Locally, many zoning laws requiring medical cannabis dispensaries and recreational stores to be a specific distance away from schools, parks, and child-care centers.

Smoking cannabis near children exposes them to secondhand smoke and its physical and mental effects. Consuming cannabis-infused edibles also has its risks. No matter where or in what form the cannabis is consumed, a parent must never become unable to provide the required care for and proper supervision of their children. A State may consider a parent’s incapacitation from cannabis to be a danger to children in the home and could take measures against the parent.

Parents who use cannabis should store any cannabis or cannabis-infused edibles under lock and key away from minors. Many edible cannabis products will appeal to children, and if you allow edibles to be easily obtained by children, you might have your parenting skills and ability questioned by authorities.

It is with this focus that this book was created. I hope you take away insight, value, and context to be utilized personally and/or shared with others you know. If there’s one certain thing, you either are or know a cannabis consumer. Now it’s time to educate on awareness, acceptance, and responsibility.

CHAPTER ONE

FROM DIME BAGS TO DOSED PORTIONS

Long gone are the days of illegally purchasing nickel and dime bags of weed on the street corner. In fact, today in at least 28 states, a legally licensed patient can purchase medicinal cannabis or a consumer over the age of 21 can purchase cannabis and cannabis-infused products legally at many recreational stores in states such as Colorado, Washington, Oregon; and voters in Washington, D.C., who approved an initiative to allow recreational use.

For some, it’s a way to relax or relieve pain; for others, it’s a dangerous and addictive drug. Whatever your thoughts on cannabis, it’s hard to deny the impact it has had on American culture and history. In this book, I’ll take a brief look at the politics and laws that played a role in shaping marijuana’s image in the minds of Americans. I’ll seek to inform in a simple, clear manner how people consume cannabis, which companies currently create products and brands that may likely become trusted household names in the future.

By way of example, a new Harris Poll¹ finds that the growing acceptability of cannabis among state lawmakers reflects attitudinal shifts among U.S. residents in the last few years. Support for the legalization of cannabis for both medical treatment and recreational use has increased by 7% in the past four years. The results come from 2,221 U.S. adults surveyed online between February 11th and 17th, 2015.

According to the poll, four in five adults (81%) favor legalizing cannabis for medical use, up from 2011, when three-quarters of Americans indicated the same. Meanwhile, according to Harris, half of Americans are supportive of legalizing cannabis for recreational use (49%), up from 42% who felt that way in 2011. Nearly nine in ten Democrats and independents are in favor of legalizing cannabis for medical treatment (87% and 86%, respectively) and more than half support recreational use (58% and 55%).²

About 70% of Republicans support the medicinal use of cannabis, while 23% oppose it. In contrast, 65% of Republicans oppose legalizing the recreational use of cannabis. Only 27% of the Republicans polled support legalizing recreational cannabis.³

About four in five adults say they favor legalizing cannabis for medical use, up from 75% support in 2011

- THE HARRIS POLL (2015)

Cannabis remains illegal on the federal level, but the continuing reform of state marijuana laws is eroding the plant’s outlaw status. According to a Gallup Poll,⁴ 51% of Americans favor legalization.

Among Colorado voters, a Quinnipiac University Poll⁵ found most, Believe it was a good move to legalize recreational marijuana, but few admit to joining the ranks of new ‘imbibers.’ With noticeable gender and age gaps, Colorado voters support legalized recreational marijuana 58% to 38% (males more than females and younger rather than older respondents being more in favor).

Since cannabis still cannot cross state lines—even between states that have both legalized it. Companies are generally, local by nature, for now. All products must be made in state, from seed to sale, so the idea of a multi-state business is first becoming viable. Dixie Elixirs and Mary’s Medicinals two of the most successful cannabis companies in Colorado offer multiple products in different formats and have become a few of the first companies to cross state lines by licensing their brands, formulas, and recipes. This allows them to maintain product consistency and expand their market share, both of which are key for any national brand.

Celebrities and well-heeled investors alike have begun seeking new cannabis-related opportunities. The SEC recently allowed California-based grow equipment company Terra Tech Corp. who operates a grow and a dispensary, to register with the Exchange. The SEC made another step in December when they decided they would not enforce federal laws pertaining to investing in canna-businesses. PayPal co-founder, Peter Thiel, jumped on board with a $75 million investment to the Seattle-based Privateer Holdings, who owns Leafly, a cannabis-focused app and the recently launched line of cannabis products by Marley Natural.

If I were to exemplify one trend in the cannabis market that surpasses all other trends, whether it be, the newest infused food, or delivery system, concentrates or topicals. It would simply be cannabis’s acceptance. This is a movement we cannot allow to diminish, rather we must continue the push for more freedoms, more studies, more education, and more access to those that need it most.

- DAVE INMAN, RADIO HOST, STATE OF CANNABIS

Many other celebrities are seeking to cash in on the canna-business. Melissa Etheridge makes a cannabis-infused wine; B-Real of Cypress Hill owns a dispensary; Snoop Dogg has his own vape pen, and Tommy Chong licenses his name and likeness out to many cannabis ventures. The exposure and instant name recognition that these products are receiving because of the face they are attached to is no doubt good for business—but is that enough?

In recent months, TV comedy and drama series have included references to cannabis more often since medicinal and recreational use became legal in many states. Sure, depictions proliferate on cable: Weeds was a daring first on Showtime; more recently the working women on Showtime’s Episodes share a joint in an upscale Hollywood kitchen; the babes on Comedy Central’s Broad City smoke in the street. The web series High Maintenance centers on a pot dealer known only as The Guy. Weed and weed culture are prevalent in America’s popular culture, albeit just under the surface.

Brand marketing and new product development play major roles in the creation of new products and their launch into the market. Most of today’s larger players in the industry started growing in their basements or opening medical cannabis dispensaries years ago. Of course, with a market as promising as the cannabis industry there will be lots of money exchanged and invested, and many will become wealthier from it. However, a strong majority of the successful business owners started as grassroots cooperatives and helped to bring cannabis out of the closet and into the mainstream with smart policy reform and advocacy.

Only recently have big names started to attach themselves to a once-taboo product, as there is now little risk of federal prosecution. Without years of hands-on experience managing the plant directly, it seems hard to believe that new growers and investors could be successful, but then again, a consortium of growers, rappers, and/or Rasta legends with world-class investment would have to succeed, right?

One thing is for sure: with the popularity of cannabis and the many new ways to consume it, there will never be a monopoly on any one aspect of legal cannabis. No single brand could ever control the whole market, leaving much room for healthy competition.

Nothing is set in stone, and with so many people dreaming of being the Steve Jobs of cannabis, it will be exciting to see what brands can set themselves apart as consistent, high quality and trusted in the years to come.

- DAVID TRAN, CO-FOUNDER, DOPE MAGAZINE, FAIRCHILD EVENTS

By any reasonable definition, marijuana has currently accepted medical use in treatment in the United States. Eight states have officially legalized its medical use. The widespread and growing popularity of medical marijuana and its potential for treating a wide range of conditions indicate a growing role in American medicine. These facts refute marijuana’s current Schedule I misclassification as a drug lacking currently accepted medical use⁶ (Gieringer 2002).

A considerable number of organizations representing healthcare professionals, the medical community, and the general public support granting greater access to medical cannabis for patients in need and recognizing explicitly marijuana’s medical use both in the United States and in the international community.

While public perception has been a major motivator in this shift, Americans believe marijuana should be legal. Between the need for additional revenue at the state level to help reduce or close budget gaps, and providing solutions to people with serious medical conditions, marijuana’s momentum is undeniable.

I’d be remiss, though, if I didn’t also state that many questions remain, such as whether or not the government will change its stance on cannabis as a Schedule I drug, and if cannabis’s benefits outweigh its risks. The last question is particularly hard to answer as we have very limited long-term data, and what we do have was primarily focused on the risks of cannabis rather than the benefits.

The DEA may move to reschedule cannabis to a lesser schedule, keeping it within the purview of the Controlled Substances Act (CSA) means that it would still be illegal, even for medical use in the absence of FDA approval. Even with FDA approval, a years-long process, it would still require a prescription to obtain, which would do nothing to address legal adult cannabis sales, production, or possession in the states. Removing it from the CSA, or de-scheduling, is what consumers and the industry are calling for, but that is the unlikeliest outcome, even though that’s how the US deals with the two most commonly used recreational drugs, alcohol, and tobacco.

CHAPTER TWO

A CANNABIS PRIMER

THC IS THE PRIMARY PSYCHOTROPIC INGREDIENT

That said, THC (tetrahydrocannabinol) also has a wide range of medical benefits and is commonly reported to relieve pain, nausea, and depression, among many other things. Yet its status as an illegal drug has made information about this cannabis compound hard to come by. Here are a few facts worth noting about THC:

THC Was Discovered In 1964

THC was first isolated and synthesized from the cannabis plant by a scientist in Israel named Dr. Raphael Mechoulam. As a postdoctoral student in the early 1960s, Dr. Mechoulam noticed that the active compounds in morphine and cocaine had been isolated, but no one had isolated the active ingredient in cannabis. The scientist was the first to isolate THC in 1964, marking the start of a long career dedicated to cannabis research.

THC Is One Of More Than 60 Active Ingredients In Cannabis

Despite being the most recognized ingredient in cannabis, THC is just one of many compounds in the plant with known medical uses. THC belongs to a unique class of compounds called cannabinoids. Since Dr. Mechoulam’s discovery,