Brands and Companies Positioning Themselves for Potential Cannabis Market

With cannabis cleared for recreational use in a growing number of U.S. states and expected federal approval in Canada, many companies are positioning themselves as lifestyle brands in a bid to reach a broader market outside the cannabis industry, executives said during a Licensing University panel discussion at Licensing Expo.

That broader reach could be tied to celebrities or outdoor sports – vaporizer pen supplier Grenko Science has partnered with rapper Snoop Dogg and snowboard manufacturer Burton – or iconic events such as MedReleaf’s recent agreement to sell Woodstock-branded marijuana in Canada.

“There are probably a half dozen brands with some resonance outside the cannabis industry” such as Bob Marley, Snoop Dog, Tommy Chong and Willie Nelson, said David Schnider, partner at legal firm Nolan Heimann. “After them, if you are outside the cannabis industry you don’t understand why they exist or what the relevance is in the first place. The key thing is to be less concerned about being relevant inside the cannabis industry and more concerned about being relevant and transcending cannabis in the outside world. Those are the brands that are going to win.”

For example, retailer MedMen has nearly a dozen locations in California, New York State and Nevada, featuring an Apple Store-like design and advertising that seeks to attract a broader market.
“MedMen doesn’t run ads that say ‘come shop at MedMen’”, Schnider said. “They run ads that say ‘here is our vision of what the world looks like and what the role of cannabis plays in that world. By planting that flag you start being a brand that is going to live and outlast everyone else and that is the critical piece.”

To achieve that critical piece of becoming a lifestyle brand, a licensing deal cannot always be viewed as major source of revenue, but rather a means for establishing your company’s identity, said Chris Fulkerts of Grenco Science. For example, Grenko licensed artist Phil Frost to create designs for Burton snowboards, but also used them for vaporizer pens, luggage and apparel. And in the case of Snoop Dogg, Grenko in one promotion paired the purchase of a Snoop Dogg G Pen vaporizer pen with a free download of the rapper’s Bush album. Grenko purchased about 25,000 albums from the rapper’s Doggy Style Records label, but only 3% of those who bought the vaporizer pen downloaded the music, Fulkerts said.

“Now we are much more strategic, and doing collaborations is about something that is more meaningful and impactful in terms of reaching your target audience,” Fulkerts said. “The crossover we were able to achieve to becoming a lifestyle brand was not just taking Burton’s name and putting it on our pen, but really standing behind something.”

Yet the approach cannabis licensing can vary by region and country. In the U.S., recreational use has been approved in nine states, while 29 states permit it for medical purposes. And in Canada recreational use will be legal on a federal level in June. But the new Canadian law bars the use of celebrity or youth-focused marketing to promote the products. MedReleaf licensed the Woodstock brand in Canada to quickly gain brand recognition and comply with the marketing restrictions, said the company’s Darren Karasiuk during the Licensing University panel.

In the U.S., with the approval for recreational use in California, some companies are weighing entering the cannabis market via licensing as a precursor to eventual federal approval, cannabis industry executives said.
Indeed, Lionsgate is preparing a licensing program for the “Weeds” brand, which was a TV series starring Mary-Louise Parker that ran on Starz from 2005-2012, says Shelia Clarke of Lionsgate. Weeds is being positioned for cannabis and accessory products.
“The legalization in California is what triggered it and we think the brand has some good applications in the cannabis industry,” says Clarke.

Contacts:

Grenco Science, Chris Fulkerts, Founder, 800-948-7480
Lionsgate Entertainment, Shelia Clarke, VP, sclarke@lionsgate.com
MedReleaf, Darren Karasiuk, VP and General Mgr. Recreational, 416-580- 8768, dkarasiuk@medreleaf.com.
Nolan Heimann, David Schnider, Partner, 818-474-5710

 

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