Big Pot: The marijuana industry learns from wine
I am astounded how rapidly the marijuana industry is growing into a bona fide, full-fledged business. In fact, it’s starting to look a lot like the wine industry
My marijuana days—and they were many—happened when pot was illegal. You could get arrested for possession of a joint; I knew lots of people who were. We used to try and guess which would be legalized in the U.S. first, pot or gay marriage. I always figured it would be pot. I was wrong, but not by much.
California began the legalization process of medical marijuana back in 1996, but even today, marijuana is not completely legal, as gay marriage is. However, this November, California voters will probably pass the Control, Regulate and Tax Adult Use of Marijuana Initiative, provided it can get enough signatures to make it onto the ballot, which seems likely. And with billions of dollars at stake, entrepreneurs are lining up to grab their fair share of the profits from an industry that—like wine—offers ordinary people pleasurable respite from their daily toils.
The latest evidence of this is an email I got yesterday. It’s from a high-powered investor relations firm, IRP, with offices in L.A., New York, Miami and Hong Kong. The email (you can read it below) was a press release touting a new company, Kush Bottles, a California company (with whom I have no relationship whatsoever, in case you’re wondering) to help “ease the pain and eliminate the headache of entering this fast-growing, opportunistic market.” Kush “provi[des] cannabis companies across the U.S. with market expertise, proper branding and high-quality packaging that satisfies the stringent requirements of the law.”
What strikes me is how high-level all this activity is. Almost overnight, it seems, we’re talking about the stock market (IRP has a lot of NASDAQ clients, and Kush is listed over-the-counter), and a level of complexity to the pot market that requires wannabe players to hire expert advice. The tone of IRP’s press release is extraordinarily similar to the press releases I get everyday from wineries: professional, articulate, and crafted in the public relations jargon language we’ve come to expect from a press release.
The wine industry discovered years ago that if it wants to play in the Big Leagues, it has to do so with bigtime marketing savvy and media relations professionalism. The marijuana industry, now in its infancy, reminds me of Napa Valley wineries in the 1960s and 1970s, when they were owned by visionary but rather naïve people when it comes to business. Wine took decades to go Big Business. Pot took a couple of years, and the way it sells itself is changing overnight. The day of the mom-and-pop pot cultivator is over. Welcome to Big Pot.
Here’s the full text of the IRP email, if you’re interested.
Dear Steve,
My name is redacted and I am contacting you to arrange one of the first interviews with the CEO of Kush Bottles, Inc. (OTCQB: KSHB) – – a rapidly growing Southern California company that is helping entrepreneurs across the U.S. enter the rapidly growing cannabis industry. Nick Kovacevich, the CEO of Kush Bottles is traveling to New York this week and will be available for any live interviews.
Entrepreneurs all over the nation are eager to enter the legal cannabis market, which could approach $9 billion by the end of 2016, according to massive expansion projections in existing medical marijuana markets, which estimate as much as 99% growth. More states look to implement medical marijuana programs as doctors and researchers continue to uncover the medicinal benefits of cannabis. In addition to the growing medical industry, four states and the District of Columbia have approved recreational/adult-use programs, which further propel the expansion of legal cannabis nationwide.
Unfortunately, cannabis is still one of the most complex industries within the United States. As the laws evolve, new rules are put into place, making it difficult for cannabis businesses to keep up with the challenging regulations that govern legal marijuana. Growers and dispensaries must understand and carefully follow a multitude of laws that govern their business operations. Packaging, branding and labeling represent some of the biggest hurdles that a business must overcome. If any of those elements are mishandled, the business could be fined and/or shut down.
Kush Bottles, a California-based company, publicly-traded under the symbol “KSHB,” on the OTCQB, at approximately $1.35 per share, was founded in 2010 to ease the pain and eliminate the headache of entering this fast-growing, opportunistic market. This forward-thinking startup is a one-stop shop for any business looking to get going in the legal cannabis trade. Using its first-mover advantage, Kush Bottles is providing cannabis companies across the U.S. with market expertise, proper branding and high-quality packaging that satisfies the stringent requirements of the law – all without incurring massive legal fees. In addition to saving clients thousands of dollars in legal expenses by helping them navigate compliance hurdles, the company also allows their clients to bring in more sales by using proven branding and marketing techniques to help make their products stand out to consumers.
Offering high quality innovative packaging solutions while also providing clients with crucial regulatory insight is the magic formula behind Kush Bottles’ success. The company has proven its model by continuously growing revenues and posting net profits, which is rarely seen amongst other cannabis-related companies. Furthermore, as a result of using their regulatory knowledge to help cannabis entrepreneurs achieve compliance, they have built an expansive network of growers, processors, and retailers across the United States. With over 5000 returning customers to date, Kush Bottles is one of the largest suppliers of packaging and ancillary products for the legal cannabis industry.
We would like to offer you one of the first opportunities to interview Nick Kovacevich, the Company’s Co-Founder and CEO. Nick has tremendous insight into the challenges that face the legal cannabis industry. He is always excited to share his vision for helping entrepreneurs overcome these challenges and discuss how Kush Bottles has become the industry-leader in cannabis packaging and branding.
I can be reached via email at psugarman@irpartnersinc.com or via phone at 818-280-6801.
Sincerely,
redacted
Vice President, Media Relations
You are right Steve about the unfortunate similarity between the two industries. The regulations are different in each state and it will just get worst with time. Just another example how the federal government failed again with unnecessary “prohibition” and not willing to learn from mistakes.
With the Tobacco Master Settlement Agreement (circa 1998), the states settled their Medicaid lawsuits against the tobacco industry for recovery of their tobacco-related health-care.
That windfall in monies funded state-supported public service anti-smoking campaigns.
With the decriminalization and regulation of recreational marijuana smoking, will we begin to see an increase in tax monies expended to fund public service anti-marijuana smoking campaigns?
As the American Lung Association asserts, smoking marijuana is not considered healthy. It is linked to chronic bronchitis and suppressed immune systems.
http://www.lung.org/stop-smoking/smoking-facts/marijuana-and-lung-health.html?referrer=https://www.google.com/
Excerpt from the Denver Post
(June 17, 2016):
“Marijuana Skeptics Take Aim at Potency [and Packaging Warnings] in Colorado”
https://www.denverpost.com/2016/06/17/marijuana-potency-limits-colorado/
By the Associated Press
Colorado pot skeptics have been cleared to start work on the most sweeping effort yet to attack legalization of the drug.
A ballot measure [Amendment 139] cleared for petitioning Thursday by the state Supreme Court would set new potency and packaging limits on recreational marijuana.
Under the proposal, packaging would have to include warnings that marijuana carries a risk of “permanent loss of brain abilities.” The measure also includes a new potency limit, meaning that popular forms of marijuana such as vape pens and some edibles would be illegal.
Supporters of the measure say that most marijuana sold today is too strong and that current warning labels are inadequate.
The pot skeptics tried and failed this year to get state lawmakers to limit potency. Lawmakers were sympathetic but resisted the change because the state constitution expressly permits all forms of marijuana. The industry compared the change to regulating the strength of alcohol.
From this weekend’s newspaper . . .
From The Wall Street Journal “Business & Finance” Section
(June 18-19, 2016, Page B12):
“Overheard”
Alternate link: http://canmua.net/colorado/overheard-health-warnings-on-marijuana-943103.html
[No Byline]
This is your brain. This is your brain on warnings.
This year marks the 50th anniversary of U.S. cigarette packages carrying health warnings.
Along with a big increase in the cost of a pack of smokes, the statements about the deleterious effect of lighting up clearly have had the desired effect. That year saw 541 billion cigarettes consumed or 4,287 for each American adult. In 2015, that number was about 1,070 — a huge decline.
Now a group in Colorado is targeting another type of smoking — one on the rise.
The group is taking aim at the state that led the way in legalizing the recreational use of marijuana with a petition to have a ballot measure introduced that would warn users that they risk a “permanent loss of brain abilities.”
That is something for cannabis entrepreneurs to think about — while they still can.