By Jordan Isenstadt
With the recent ballot measure victories on Election Day, a total of 36 states (along with Washington, D.C. and three territories) have some form of legal cannabis on the books. With dollar signs in mind, many are turning their attention to legal cannabis markets, especially states that have recently expanded their cannabis programs from the more restrictive medical markets to the more appealing adult-use markets. This includes states like New Jersey and Arizona, as well as prospective markets such as New York and Pennsylvania.
These states will be a major focus for the industry in 2021 and beyond – from large multi-state retail operators and smaller grower-processors to cannabis construction companies and other ancillary services. However, due to federal prohibition, cannabis laws are a patchwork of regulations that differ wildly from state to state. As a result, it’s not possible to have a simple one-size-fits-all kind of approach when it comes to marketing or business development strategies. Every market is incredibly different with distinct politics, influencers, and regulations. Cannabis companies also cannot engage in many traditional advertising tactics, such as paid digital advertising campaigns on social media, as a result of the federal prohibition of the plant.
For those who are willing to invest the time, effort, and money into growing and developing the market the unique state-by-state marketplaces are a massive advantage. Those who spend the time laying the groundwork will ultimately be better positioned to break through the noise of an increasingly crowded market, especially those in newly legalized states. So, where does one start?
- Make Sure You’re “In The Know”– To jump into a new marketplace, you have to start by doing your homework. It’s critical that you know the history of the state cannabis program and are up to date on all legislative proposals for the recreational to expand program. Familiarize yourself with the major business organizations who represent the industry within your state (usually there is a pro-business group representing the large MSO’s), as well as prominent advocates for legalization and social justice. Get to know the cannabis beat reporters at outlets throughout the state and subscribe to relevant cannabis newsletters, such as MJBizDaily, Marijuana Moment and Cannabis Business Executive. Finally, follow local and state regulators, elected officials, business leaders, and advocates on social media to ensure you’re always in the know.
- Expand Your Network– For newly legalized states, it will take around a year to enact solid legislation, award licenses, and enact infrastructure, giving you time to start making friends and allies throughout your state or localities industry. Introduce yourself to business leaders, advocates, regulators, and elected officials and arrange time to learn more about them, their organizations, and their goals for the state. Engage with key stakeholders via social media. Sign up for virtual networking events and webinars. Depending on your business, you may want to start building some ties to specific communities and join local chambers of commerce. If you’re more of an ancillary service provider, you’ll need to get familiar with all of your prospective clients.
- Share Your Story– Aside from a desire to make money, you must be able to clearly communicate why you are looking to get in on the green rush. What are your other motivations? Are you motivated by personal experience? Do you know a veteran who fell victim to post-traumatic stress or, perhaps, did a relative with cancer or epilepsy find comfort through cannabis treatment? Do you want to right the wrongs of the war on drugs? Whatever the reason, you must identify your “why” in order to build an authentic brand or offering.
- Localize Your Story – What’s your authentic story or angle and how does it ladder back to the state or locality you’re looking to enter? As mentioned before, every state’s regulations, stakeholders, and cannabis business infrastructure are vastly different from any other market. As a result, it’s necessary for any new entrant or multi-state operator to localize their messaging. Oftentimes, the best move a newcomer can make is to hire a local who already has strong connections to relevant players and can hit the ground running. Commit to your community – by investing in them, they will invest in you. Not only will this continue to build your authentic local story, but you’ll simultaneously build strong relationships that will solidify your place in the market.
- Be the Expert– Whether it’s an expertise in retail, supply chain, construction, cultivation, processing, or wellness, position yourself as a thought leader in the sector within the media and among your peers. This can take the shape of bylines, owned website content, sponsored content, spots on panels and thought leadership. The more you show your expertise and become a known name throughout the state or region, the sooner you will be able to make valuable connections and get to business.
- Prepare for Launch– Now that you’ve laid the groundwork, built your network, established your why, and shown your expertise, it’s time to officially launch your company. Depending on your slice of the industry and your business development approach, a launch can take many forms. Regardless, you need to let your audience of potential clients, state regulators, or the general public know that you’re available and open for business. This can include digital tactics, such as SEO, organic social media, paid advertising campaigns, owned blog content, and sponsored content. Or maybe you’ll integrate earned media tactics including press releases, media events (remote for now), and creative storytelling to media.
It’s tempting for some CEOs and entrepreneurs to hold off on tackling messaging and public relations until a later point in the company lifecycle, especially in a highly-regulated and complicated industry, but this is a dangerous and possibly perilous decision. Engaging in proactive storytelling and brand building from the outset can make the difference between a robust, well-executed launch (resulting in sales or partnerships) and a failure to launch.