We're all drinking weed now.
We're all drinking weed now.
The news & access to a past dispatch.
The Broccoli Report
Monday, August 9, 2021
Time to read: 6 minutes, 1 second. 1204 words.
Good morning!
It’s been a while since we unlocked a Friday post, so this week we’re making a recent favorite available to all subscribers: Weed's Most & Least Successful Marketing Moments. In it, five brands across the THC, CBD, and accessory spectrums answer two simple questions: What single marketing moment was the most worthwhile for your brand? What campaign just didn’t land?
Enjoy, and remember to sign up for a paid subscription to receive every Friday dispatch.
This Friday the 13th, get ready for some scary stories. Recently, some disturbing headlines have sent ominous ripples through the cannabis news-sphere. Could they threaten the trajectories of cannabis and hemp businesses everywhere? I’ll attempt to separate fact from fear-mongering and explore whether these stories point to crucial issues the industry must address or are just the latest iteration of anti-drug propaganda.
One-Hitters: Cannabis News at a Glance
The LA Business Journal answers one of my lingering questions: What’s going on with MedMen? Last I checked, the founders were buried under a slew of lawsuits—the company would have declared bankruptcy if cannabis businesses legally could. The LABJ’s reporting reveals that the company is in an ever-deepening financial hole; the fact that a private lender is charging MedMen a 15.5% interest rate on $77 million in loans isn’t helping, and the only solution may be to sell the company. In an attempt to bring in more revenue, the company plans to open stores in Boston and San Francisco. Tom Lynch, MedMen’s latest CEO, is an executive fixer experienced with righting troubled companies like the flailing lingerie retailer Frederick’s of Hollywood. Lynch has a daunting task ahead, but Medmen’s dangling him a decent carrot. When Lynch was appointed permanent CEO on July 15, MedMen and Lynch’s firm entered into an agreement that stipulates an award of up to $750,000 if he stays in his post long enough and manages to “navigate the sale of MedMen before June 1, 2022.”
Oof, Canada. An MJ Biz Daily data report shows Canadian cannabis producers have sold less than 20% of their output since the country launched adult-use sales in October 2018. This means that more than three-quarters the cannabis produced in Canada over the past two years is sitting in inventory or had to be destroyed upon expiration. This number is just an estimate—the outlet got this data by polling every provincial wholesaler on sales and cross-referencing numbers from Health Canada, which end in October of 2019 (though Headset helped with data for Saskatchewan). Even so, it's clear that weed is not selling anywhere near to the rate it's being produced. According to one Nova Scotia-based cultivator interviewed, producers’ initial impetus was to grow as much as possible, rather than the best product possible. A potent reminder that talented growers are a vital part of legal cannabis succeeding—consumers won’t leave the legacy market if it means smoking inferior bud.
In other (likely related) news from the north, Houseplant and Canopy Growth Corp. are going their separate ways. Rogen’s cannabis company launched in Canada in partnership with Canopy in March of 2019, but come September, Houseplant will only be available in the U.S. market. The company says it plans to relaunch in Canada at a later, unspecified date, with products “more consistent with its U.S. offerings.”
The CEO of BLT Restaurant Group (BLT Steak; Casa Nonna) announced a hopeful collaboration with Colorado CBD brand Toast to partner on consumption-friendly cannabis lounges that would serve CBD-infused food—if NYC laws allow.
Big drama in a little California town: In a plea deal, a Santa Maria cannabis business owner acknowledged guilt in bribery and tax evasion charges. Helios Dayspring reportedly paid $32,000 for positive votes on cannabis regulations to a San Luis Obispo supervisor, offered $100,000 to the mayor of Grover Beach in exchange for two dispensary permits, and “lowballed his income to the IRS by about $5.2 million in 2018 alone.”
Smell that teen spirit? Jones Soda is getting into the weed beverage game.
On that bubbly note, I really enjoyed this deep dive into the evolution of wellness beverages and Big Beverage in general by Melinda Fakuade for Vox. It follows the consumer trends and marketing approaches through the decades, from soda to Vitamin Water to kombucha and CBD-adaptogenic blends, highlighting how blind consumer faith that these drinks can somehow make us better people fuels this industry.
The Brightfield Group shared data on the average Delta-8 consumer. They are 34 years old, the majority are women (53%), and it’s predominantly people who also consume THC and CBD. They found that 17% of consumers are just curious about what it feels like.
Billionaire Charles Koch believes in the federal legalization of cannabis, and he just announced he’s putting $25 million towards making it happen. Don’t get it twisted—he’s not on our side. He’s probably just positioning to own a sector of the weed game.
The state of Colorado launched a Cannabis Business Office within its Business Support and Rural Prosperity division, offering tools like technical help to cannabis businesses, business loans, and grants to social equity licensees for seed capital and ongoing business expenses. It’s really cool to see entities like this emerge, allowing for additional systemic support without the lengthy process of amending regulations. No one regulatory agency can be everything it needs to be for an entire state’s cannabis industry, and it’s paying for itself—the CBO is funded by cannabis tax revenue.
The International Cannabis Business Conference is slated for August 25-27th in Berlin. Although this particular series of gatherings skews expensive and doesn’t exactly seem worthwhile, I’d totally attend if they had an affordable virtual ticketing option that gave limited access to the event. But it’s Berlin or bust, at $700 per ticket. It seems like leaving money on the table not to set up a few Zoom feeds for those of us willing to pay to tune into keynotes and panels.
Flowhub—the popular compliance and retail management software used in hundreds of dispensaries—launched a social equity initiative to support newly licensed equity operators. Eligible business owners will receive highly-discounted Flowhub POS software ($4.20/yr for up to 3 years), two Nug Pro mobile hardware devices, and free installation. Apply here.
Allume’s Chill Box is back. Last time I spoke with founder Camille Chacra, it was for a Report on the potential of monthly box models for CBD and THC brands and why Allume pressed pause. The Summer Daze Edition ($99) celebrates the return of these curated kits with $180 worth of goodies, like the brand’s vegan suede stash bag, a Studio A-OK “Microdose Reality” rolling tray, Veil odour-eliminating room spray, a cute bandana, and Broccoli’s botanical postcards.
A novel way to incorporate crystals and medicinal herbs in cannabis rituals: via your ashtray. Almost Consulting collaborated with Sagittarius Rise Resin on this set of beautiful pieces that bridge functional and spiritual art in an interesting way.
I knew more weed jewelry was coming! These sparkly, dangly Flower Drop earrings in Sundae School’s latest collab with Flan look like something straight out of a prom photo circa 2002, and I bet they are already sold out.
ttyl :p,
Lauren Yoshiko