How cannabis brands are connecting to customers at events where they can't sample

Getting high on experiential Shut out from big traditional ad buys, cannabis marketers are turning to event-based marketing—but pot remains plagued by legal pitfalls at every level By E.J. Schultz Published on March 9, 2020 Karli Warner and Erin Gore are putting a new spin on garden parties that has nothing to do with potted plants—and everything to do with pot. The Northern California duo, who formed a cannabis company called Garden Society four years ago, are spreading the word about their startup via small, all-female gatherings dubbed “garden parties.” The events, held at private homes, provide a non-threatening atmosphere to educate potential consumers about their products, which include everything from cannabis- infused chocolates to pre-rolled joints branded Rosettes with one strain that promises to “bring a sense of calm and focus to even your most hectic day.” Karli Warner and Erin Gore are putting a new spin on garden parties that has nothing to do with potted plants—and everything to do with pot. The Northern California duo, who formed a cannabis company called Garden Society four years ago, are spreading the word about their startup via small, all-female gatherings dubbed “garden parties.” The events, held at private homes, provide a non-threatening atmosphere to educate potential consumers about their products, which include everything from cannabis- infused chocolates to pre-rolled joints branded Rosettes with one strain that promises to “bring a sense of calm and focus to even your most hectic day.” “It’s like a Tupperware party, but for cannabis,” says Warner, who has publicized the events by tapping into social networks such as mom’s clubs. “A lot of these women are looking for a connection that they won’t get in a typical retail experience.” The intimate events are typical of the kind of experiential marketing deployed in the cannabis industry, as brands seek attention in a sector still riddled with legal pitfalls. Despite growing acceptance—recreational pot is now permissible in 11 states and the District of Columbia—brands remain shut out from traditional forms of advertising, like national TV and digital buys on platforms such as Twitter and Facebook, which prohibit ads for high-inducing cannabis products. This puts pressure on brands to craft breakthrough experiential programs or risk falling behind in an industry that is under rising pressure. Consumer demand remains strong: Retail sales of cannabis products in the U.S. grew an estimated 24 percent to $14.4 billion last year, according to market research firm Packaged Facts, whose figures include hemp. But companies have struggled to deliver profits and their performance has fallen short of Wall Street’s once lofty expectations. “Experiential is a huge part of any marketing mix for brands in general. But in the cannabis space it takes on even more weight because of the limitations you have in the other parts of the marketing mix,” says Kevin George, a longtime packaged goods marketer who recently finished a stint as chief marketing officer of Harvest Health and Recreation, one of the largest vertically integrated cannabis companies in the U.S. Fitness freaks and socialites But like most things in the cannabis business, experiential is not easy. Because it is still a “gray market”—legal in some states but still illegal federally—brands face a thicket of regulations. For instance, while marketers can publicize their products at events, sampling or selling actual cannabis on-site is generally prohibited with a few rare exceptions. “It is fraught with compliance and laws and regulations at every level—from the city, to the municipality, to the county, to the state, to the federal government,” George says. “If you are going to do it, you better have a really good compliance team who understands what’s allowed and what is not allowed in order to protect yourself.” “In some ways you feel like you are operating in 2008 marketing. There is no social advertising, there are no basic six-second pre-roll [ads] on a lot of sites,” says Cory Rothchild, senior VP of brand marketing for Cresco Labs, which owns cannabis brands and dispensaries in 11 states. Cannabis brands are relying on various experiential venues to gain attention, from health clubs to pride parades. Transparency The restrictions force pot marketers to get creative, like striking partnerships with non-cannabis brands to target desired audiences. Increasingly, the target consumers are not stereotypical potheads popularized by Hollywood. Instead, a growing number of brands are putting a premium on wellness- minded buyers, who are more likely to be found at a yoga or spinning class than a music festival. For instance, Dosist, which specializes in dose-controlled cannabis products, struck a deal with fitness chain Barry’s Bootcamp to become its “global cannabis partner.” Dosist does “class takeovers” where it covers user fees in exchange for publicizing its products after class and at Barry’s smoothie and juice bar. Barry’s “really wanted to stay modern with the cannabis influx, but do it in a way that was controlled and about the wellness side of it,” says Dosist Chief Marketing Officer Anne-Marie Dacyshyn. The marketer’s products include one dosing pen branded “Relief” aimed at easing aches and pains. Dosist has a similar deal with SoHo House, the swanky members-only social club. Dosist CEO Gunner Winston recently gave a talk at SoHo’s downtown Los Angeles venue that was billed as an “intimate conversation.” Of course, sampling was prohibited at both venues, forcing Dosist to talk about its wares without giving real-life demonstrations. Executives insist that is not a problem. “More than sampling, people are really looking for information and they want to know what is behind these brands,” says Jason DeLand, Dosist co-founder and a partner at ad agency Anomaly, adding, “we have really straight-up conversations about it, so when they try the product they know what to expect.” Chicago-based Cresco targets foodies with one of its edibles brands called Mindy’s, named for Mindy Segal, a James Beard award-winning pastry chef who operates a Chicago restaurant named Mindy’s Hot Chocolate. Cresco recently held an invitation-only event called the “Flavor Trip” at the restaurant for retail buyers and influencers in Chicago’s arts community. “The point of the event was to showcase the desserts that inspired the flavors behind our line of gummies,” says Rothchild, who joined Cresco in 2018 from PepsiCo’s Gatorade, where he was director of consumer engagement. “You could actually taste the honey melon sorbet that we sat down and tasted with Mindy in our restaurant many months ago that now expresses itself in the form of the best-tasting edible.” Of course, per Illinois law, the dishes could not include intoxicating cannabis, unlike the line of “artisanal edibles” that Cresco sells under the Mindy’s name, including gummies, fruit chews, hard sweets and chocolates that contain varying levels of THC. Sunday Goods, a Scottsdale, Arizona-based cannabis marketer with sales in California, gets around the sampling restrictions by running co-promotions with nearby dispensaries when it does experiential marketing, in hopes of driving near-immediate purchase, says Corey Kelly, who recently finished a stint as the marketer’s senior director of brand strategy. “That was a way for us to track the ROI,” he says. At the LA Pride Parade and Festival in West Hollywood, Sunday Goods wrapped a car in branding and handed out hats and T-shirts. While it had to distribute empty boxes of product, it directed people to the nearby Sweet Flower dispensary. That is where patrons could buy its actual pot, which on its website is promoted as providing “relief from pain” or a “pathway to creativity.” Still, Kelly concedes that event marketing without on-site sampling risks leaving people unfulfilled—and “you end up having an even more negative effect.” Hello, budtender The problem is there are very few places where public cannabis consumption is permitted. Buyers are not even allowed to sample products on-site at dispensaries. Cannabis goods must be kept in child-proof containers, which prevents someone even opening a box to take a whiff, as they might do at a department store with a bottle of perfume, notes Kelly Fair, U.S. general counsel at Canopy Growth Corp., a cannabis company based in Canada. This is why brands put a huge emphasis on getting in good with “budtenders,” the on-site workers at dispensaries whose advice to consumers can make or break a brand. Buyers can “often be persuaded by a particular budtender just because there is such a lack of education for most consumers,” Kelly says. “That is really where I think brands win and lose.” Sunday Goods, he said, has taken budtenders to dinner or a ball game, pushing subtle points like the oblong shape of its vape pens that keep them from rolling off a desk. Some states allow for on-site cannabis consumption at so-called cannabis lounges—which could open up new opportunities for experiential—but adoption has been sporadic because licenses are typically handled at the municipal level. The first one in California opened last fall in West Hollywood; it now goes by the name of Original Cannabis Cafe. Berkeley, California, recently approved on-site smoking at lounges, but the East Bay Express, which reported on the news, estimated that it could be a year before the first one opens due to red tape. Show Sidebar Agencies are cautious on cannabis Even as cannabis demand grows, agencies have yet to profit in a major way. The general rule of thumb, according to multiple cannabis brands, is that publicly traded media and agency companies shy away from opportunities because top executives don’t think the payoff is worth the risk of working in a sector that remains illegal federally. “There is a real need for brand-building [but] it is hard to find partners,” says Greg Butler, a former MillerCoors marketer who recently joined cannabis company Cresco Labs as its first chief commercial officer. The company was able to lure MDC Partners-owned 72andSunny Los Angeles to work on a campaign late last year targeting California called “Excellent Everyday Cannabis.” Chicago-based Centro handled programmatic media buying. An MDC Partners spokeswoman did not respond to a question about the company’s cannabis policy by press time. Of the major holding companies, Dentsu has among the most liberal policies. Mike Russell, U.S. chief growth officer for Dentsu Aegis Network, told Ad Age last year that “our doors are open to the rapidly growing cannabis category.” A Dentsu spokesman reaffirmed that view last week. But other holding companies are more cautious. An Omnicom spokeswoman stated: “We would theoretically consider a cannabis account that is consumer-facing if it were legal on both the federal and state level, but we also take several other factors beyond legality (e.g., reputation, credit insurance, and banking considerations) into account when making these decisions.” An Interpublic spokesman stated: “In theory an agency could work on some services for cannabis in the U.S., but we would have to be confident that we can do so lawfully at both the state and federal level.” Publicis Groupe said it is “open to business opportunities for hemp-based products, including some types of CBD, where legal at both a federal and state level.” A WPP spokesman declined to comment. —EJS Going to Grass Lands Large-scale festivals have also been slow to accept pot consumption. But marijuana advocates see promise in last year’s approval of cannabis use at the Outside Lands music festival, a three-day event held annually in San Francisco’s Golden Gate Park that in 2019 was headlined by Paul Simon, Childish Gambino and Twenty One Pilots. Organizers, who won approval from the state’s Bureau of Cannabis Control and the city of San Francisco, allowed on-site sale and consumption in a fenced-off area limited to people 21 years and older that is branded Grass Lands. Most festivals were open to having a cannabis-related company at their festival, but none of them were open to actually having cannabis consumed.” Peter Brown, G7 Entertainment Marketing “It’s like a beer garden but with weed,” says Peter Brown, general manager at G7 Entertainment Marketing, which ran an experiential marketing program for Pax Labs, which makes vaporizers. (Pax was formed in 2017 as a spinoff from Juul.) G7 Entertainment reached out to multiple festivals in other states where pot is legal. “Most festivals were open to having a cannabis-related company at their festival, but none of them were open to actually having cannabis consumed,” Brown says. Fair described Grass Lands as “kind of a test drive,” noting that law enforcement reaction to the pot consumption was “not adverse,” which she suggests bodes well for other festivals to follow suit. Outside Lands, which is run by Another Planet Entertainment, Superfly and Starr Hill Presents, lured 28 brands to Grass Lands last year, according to a list published on its website. Sponsors included craft brewer Lagunitas, which plugged its Hi-Fi Hops—an “IPA-inspired” sparkling water infused with THC—at a booth branded “Hi-Fi-Dration Station.” Eel River Organics, which sells “dry-farmed” cannabis grown along the Eel River in Humboldt County, erected a tent branded “The Escape” that included an interactive photo booth. The tent lured 3,000 visitors, according to a video posted on the company’s Facebook page. Pax Labs’ booth included machinery where visitors could customize vaporizers with laser engravings. Cresco seized on Grass Lands by putting up a greenhouse where it invited attendees to “rise, refresh, and rest” with professional chair massages, interactive GIF photo booths and a station where people could make flower headbands. The greenhouse was also next to a “consumption deck” where people could smoke cannabis they bought at the greenhouse. But for Cresco, the mere presence at a large-scale festival was just as important as ringing up sales. The company, Rothchild says, targets events “where we can show up and normalize the existence and experience of cannabis—just by being there.” Web production by Corey Holmes. Graphics by Max Sternlicht. Photographs courtesy of Outside Lands Festival, Sunday Goods and Dosist. Grass Lands photographs courtesy of Michael Rosati.

How cannabis brands are connecting to customers at events where they can't sample

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