In the latest issue of Time Special Edition, "Marijuana Goes Mainstreet", Bruce Barcott, author of the book "Weed the People", takes an in-depth look at the current state of the marijuana business, and how far it needs to go to win over more than just "potheads".
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In a country where multiple states are updating their marijuana laws, it seems like only a matter of time before marijuana may be at least decriminalized in all fifty states. However, for an industry to thrive it needs to be recognized as just that, an industry. Currently, dispensaries in states where recreational or medical marijuana is legal, such as Washington and Colorado, are acting in a rather haphazard state, at least business-wise. Most of these stores are mom-and-pop pot shops, growing their own product in their home garden. At the moment the legalization or illegalization is at the whim of state governments. The only regulations come from taxation, again, run by local governments. Not even the FDA is involved, as marijuana is still federally illegal. What this industry needs is a way to get off the government hook. What it needs is a proper business structure.
This means investment. The only private investment firm, according to Barcott, Privateer Holdings, was daring enough to enter the weed industry, or as they like to call it "the cannabis space". Privateer Holdings is headed by Brendan Kennedy, Michael Blue, and Christian Groh. They saw an opportunity. To get an idea of how these marijuana companies were run, they headed to a meeting of 200+ of the industries leaders. They were the only ones in suits. "Most people thought we were DEA agents," Kennedy is quoted as saying in the piece. It seemed as if the industry needed a corporate overhaul.
However, they were not able to find venture capital companies that were ready to take the plunge. To solve this, Privateer Holdings used a private-equity firm. A private-equity firm does not invest but instead purchase entire companies and manage them directly. The biggest challenge of entering this "cannabis space", however, is to convince the American public that this is a legitimate, family-friendly product. And the best way to do that, according to Barcott, was advertising.
He points to an interesting case in point: the motorcycle. When companies wanted to take motorcycles mainstream they had a problem. Only hoodlums and criminals rode motorcycles. It took a clever ad campaign to convince middle America that motorcycles were friendly. One advertising company working for Honda came out with the slogan, "You meet the nicest people on a Honda". To make money in this business, you have to lose the bad image of marijuana. You have to rebrand marijuana as something that ordinary people use and why they use it.
Privateer Holdings took this ad-campaign and ran with it, similar to the Honda motorcycle. Ads in magazines demonstrated ordinary people going about their day, such as jogging going home. Little text boxes explained why these people used marijuana-based products, to help battle cancer, to relieve MS symptoms. And the tagline, "What's your strain?", beautifully made the product seem much more inclusive. It was produced as a pharmaceutical ad, ordinary people using marijuana to address their health issues.
The following video is an interview with the author Bruce Barcott. Note that this TIME Special Edition is a re-release from 2015.
Video credit: YouTube.com
