Pot. Weed. Reefer. Jazz cabbage. Cannabis was called everything - except legal. Keep the stoner jokes to yourself though, because the times they are a-changing. Today in over 30 states cannabis is not only legal, it’s big business. Inspired by 4/20 - the annual unofficial celebration of cannabis - Thomas Stirling is rolling out a special episode of Brand2Brand and taking a closer look at the growing cannabis business. Thomas is sitting down with Jesse Channon, Chief Growth Officer of Columbia Care, one of the largest fully integrated operators in the global cannabis industry. Together, they’re discussing the increased demand for cannabis products during the pandemic, technology’s role in cannabis go-to-market strategies, and how the industry navigates a vast maze of marketing rules and regulations.

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TRANSCRIPTION FROM AUDIO PODCAST:

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Veronica&nbsp;&nbsp;

You're listening to Brand2Brand. A not-so-serious marketing show for serious marketers with your host, Thomas Stirling.

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Thomas

Welcome, everyone. Today on the show we have a very special bonus episode - and also a bonus atmosphere in terms of the studios. I want to say it's special and I also just want to say our film crew didn't show up because it's 4/20.&nbsp;

Veronica

They're celebrating - as they should!

Somebody didn't make it to the office today.

We're coming to you live from what looks like news anchor positions, which I'm kind of into.

Yeah, I like it too. It's nice. The chair's a lot more comfortable if I'm being honest. For those of you that are listening - sorry for wasting the last 30 seconds of your day.

Hey, if you're celebrating 4/20, you probably have time to kill today.

That's true. Or you're paranoid. Special day today - 4/20. I don't know, 4/20 has a special moment for you, Veronica?

I can honestly say once they come out with a weed for people who don't like smoking weed, I will be celebrating this holiday.

You'll be first in line.

Yeah, I walk into a dispensary and I'm like, "Do you have pot for people that don't like smoking pot?" They're just like, "Get out!"

Yeah, you're not a target customer. But today on the show, we are super excited to be joined by Jesse Channon, the Chief Growth Officer of Columbia Care, which is one of the absolute largest brands in the cannabis space in the US. And, I think we actually have breaking news -

This just in: After this interview with our dear friend Jesse Channon, Columbia Care was actually acquired by Cresco Labs - now making Cresco Labs, with Columbia Care in their portfolio, the largest cannabis company in the United States. With the recent news of the acquisition, it'll be interesting to see if some of the brands that Jesse talks about in this interview that he's created. Are they going to continue? Are they going to change? Is the overall brand structure of Columbia Care going to go away? Will that stay the same? So we are kind of at the forefront of watching how fast this industry is evolving? And - how you market around that.

100%. When you're dealing with a brand and a whole host of in-house products, you’re really dealing with this concept of "House of Brands" versus "Branded House". I mean, there are just so many awesome takeaways. And with that, let's get into it.&nbsp; Jesse, how are you doing today?

Jesse Channon

I'm doing well. Thanks so much for having me on.

No, thank you. We're so excited to sit down and get a chance to hear a little bit about what you got going on. I think - such an interesting space, so much evolution, and so many things happening. Would love before we just jump in, you're a technology and a marketing guy. Do you mind sharing just a little bit of your background before we get into it?

Yeah, sure. I think the short version is, that I had the opportunity to work in social and digital pretty early on. I was part of a founding team for a Y combinator company, (speaker cuts out here) Page Lever that eventually sold to an ad tech firm in New York. I spent about seven years on Madison Avenue, building technology and tools for some of the world's biggest brands and agencies to ultimately deploy capital into all of the social ecosystems from an ad tech point of view. Then we also ran a big services business - sort of a full-service agency for media buying across digital and social. From there, spend some time in programmatic content and influencer and then landed in the wacky world of selling cannabis. So, that's sort of the short version there.

You've really had a chance to touch on so many different things and been exposed to so many things. But I think one of the things that had been so fascinating for me was hearing you actually put your background to work and built a proprietary app designed and geared around simplifying the experience. Do you want to talk a little bit about how that unfolded?

Yeah, I was very fortunate when I joined Columbia Care, we were at a really interesting inflection point as an organization. Columbia Care built a reputation as a medical-focused provider building a lot of trust in the quality and consistency of the products and the pharmacy experiences that we offered. We were at that critical path where we were starting to serve more and more markets that had either recently converted to or were converting to, adult-use sales and there are unique challenges that come with that. And I think one of the biggest challenges is in education, and finding a way to make cannabis something that's more accessible to more people that are trying to integrate it into their life. When I joined, we already had a Chief Data Officer who's incredible - Guy Hussussian - and so we had the beginnings of a tech practice. We looked around and said, "Okay, we're going to simplify our stack, if you will. So we're going to move to a smaller number of third-party partners, but we're gonna dive in really deeply." The industry is incredibly nascent and so is the technology, and we wanted to focus on building really deep relationships with those partners to try to co-develop interesting features we thought would give us an advantage. We noticed the gap almost right away. There's a lot of stuff out there that will help you buy it (like a point-of-sale) or track it (like a seed-to-sale system) or even find it or buy it like an online menu. But there's not a whole lot of technology out there or services really focused on helping to bring newer users into the space, and make recommendations for the products that they should integrate into their life.&nbsp;

That's tremendous. I think one of the challenges with cannabis is there's such a sea of options. People for the first time who are entering a dispensary - there can be a lot of intimidation around just simply how many different potential products are available. What was so interesting to me about actually getting a chance to go to the website and play around with it, it connects the human element, the feel, what you're looking for, right? Are you looking for a certain type of experience? Also, I loved that as part of the process it asks, "Well, where are you going? Are you going to a music venue? Or are you hanging out in the outdoors?" It really helps leverage what people are looking for. I've heard you speak before - I've heard you talk about how the health and wellness market is really just simply starting to grow and there's so much opportunity there

It's interesting. I think the thing that makes it feel more human - to your point -&nbsp; those contextual questions are built in a way that follows a very logical flow of how a conversation would go with a friend if you were trying to ask them "What are you looking for?" It really all maps back to the time I spent sitting in dispensaries and engaging with experts in the space, where I would listen to them speak to potential patients or customers. For me, it all came back to this one lowest common denominator question, which was the entire backbone of the architecture for the system, which is: How do you want to feel today? That's what it all comes back to, because cannabis, whether you're integrating into your life, because you have something that is really bothering you, or you're just trying to enjoy a night or relax, or sleep more, or my knee hurts, or whatever it may be. There's obviously a wide spectrum of use cases that we serve as an industry. At the end of the day, it really comes down to how are you trying to feel? When you think about that flow, right, when you look at application development, you start to think about the customer journey. You think "What is that click track going to look like?" For us, it was always this has to feel like a very casual conversation, and the "wow" moment has to come when the prediction is as accurate as possible. Those contextual questions take you down that path of "How do you want to feel today? You start there. "Do you want to dial in that feeling? How are you? What are you going to be using it for? Where are you going to be using it? Is it a special occasion? Something like that?" Then, "What are the forms that you're comfortable with?" And believe it or not, from those questions, we can actually get to an incredible level of granularity of, "These are the products that are going to best match what it is how you're looking to feel."

Shifting gears a little bit, you are in the midst of a rebrand of sorts. Is that right? Columbia Care is shifting and you're changing the name of some of your retail locations. Could you expand on that?

Yeah, this one was a fun one. When I joined the company everything was Columbia Care. The name on the door, the name on the bottle, right? Everything was Columbia Care. Again, I sat back and watched and listened to what people were saying and how people were engaging. I realized there were two things that we needed: one, we needed product brands. This was going to ultimately become a game of brands, no question. We're still very early in that game. But that's where you saw the launch of Seed &amp; Strain, Triple Seven, Amber, and Classics, and all of these product brands that we have. The other thing that we had to do is change the name on the door. There were two reasons for it. I firmly believed that you had to create a brand that stood on its own that would never be a product. So that it could be a safe place where you could curate all of the best products in the state. Your products and others - third-party and first-party products - bring the most curated, best selection of products possible into a retail ecosystem. And you knew when you were going in there that there was never going to be a product called "whatever was the name on the door" right? We know now that name is Cannabist but whatever that name was going to be, it couldn't also be a product brand. With the exception of Florida, where regulations are we have to put that name on the packaging, there are no Cannabist-brand products anywhere else in the country. The other thing that was very apparent to me and I talk about this a lot, but I took a trip to Florida. Florida is an incredibly restrictive market when it comes to regulations for advertising and things like that. It's a medical market. We were driving down the road and I'll never forget, it was a divided highway (as often is the case in Florida) and you're driving down, you have to make a U-turn and come back at something. We drove in this direction and we passed one of our dispensaries. I looked over and it just said Columbia Care. There's no other signage that could be outside, it was just the name. I remember at that moment I turned to our COO, David Hart, who was on the trip with me. I said, "Man, I gotta be honest with you. There's a lot of stuff we could do. That could be a retirement home, that could be auto insurance. There are a lot of things Columbia Care could be. But I'll tell you what they don't do: they don't sell weed. There is no way that Columbia Care sells weed." We were laughing and we went to the dispensary where we were talking with the team about it. That was really a moment where I knew that the brand had to be very literal. We went through a lot of exercises, we looked at a lot of names, and very early on our CEO Nick Vita said, "You know, for better or worse, everybody says they want to be the Apple of something. But the one thing that I love about an Apple Store is it's got a Genius Bar. I love that there's somewhere you can go and get educated." I said, "No problem. We'll build education bars in. What do we want to call the people behind the bar?" We had a couple of different naming conventions that we're looking at. But the one that we all loved was a Cannabist. It's like a name that already exists in the space, like a sommelier of weed. We said, "We're gonna call the people Cannabists behind the bar." From there we said, "Well, let's just name the whole thing Cannabist." It's super obvious. You drive down the street, and you see "Cannabist". Yeah. Which is cannabis - with a T. And it's like, "I know exactly what those guys sell."

Absolutely. It's just such a beautiful-looking brand package. You obviously spent some time thinking about how you wanted to position it, where you wanted to position it in the marketplace, it really has some strong elements associated with it. What exactly were you guys thinking about a new brand moniker - a logo element? You could have gone clean, simple, etc. It has a very, very nice feel to it. Could you expand a little bit on that process?

Any great marketer will tell you at this moment - or they should tell you - we had great partners. That's what makes a brand like this come alive, right? We had incredible partners on the agency side that we worked with 22Squared - based out of Atlanta and Tampa - they were our go-to on the creative side. They're a super talented team. So we got very lucky there. Then our internal team was very, very strong. We're very fortunate to have the team members that we do. When we were going through the exercise we knew we wanted to do blue, because Columbia Care was already synonymous with this cyan blue. I knew I didn't want to do cyan, but we wanted to do blue as an homage back to Columbia Care, and it was also something that had a lot of breathing space in our industry. I mean, everybody does green, right? And if you're not doing green, then you go the opposite direction to like super loud, yellow, or orange. So it feels like there's a lot of room here for a really pretty blue as a primary execution. We went down that road, we did blue. I wanted to do Art Deco. We're a New York City-based MSL, and there is nothing more Art Deco to me than New York City. Roaring twenties, Empire State Building, Chrysler Building. I just felt like it was such an iconic visual identity that no one was in. No one was building dispensaries with Art Deco themes, right? I said to myself, "Well, what's something that would feel really different?" I want the spaces to feel very elevated. I want them to feel very comfortable. Almost like when you walk into a West Elm or a Pottery Barn where you just want to sit on everything, right? I wanted them to be very comfortable but feel almost like that weird juxtaposition of like, "I'm buying weed. But this place is like super nice. This is like a really nice, well-designed space." And, I wanted it to naturally bleed into a time when consumption lounges become more and more normalized. I want the brand that had the Speakeasy. So I planted a flag and said, "We're going Art Deco and we're going to make the inside of this thing look so obvious that if you bolted a speakeasy onto the side of it, it would be like no brainer." Like literally just put in a door behind a painting and that's it, you're going into a consumption lounge. That's absolutely what happened. We just came together as a team, we collaborated, and we said, "This is the direction that we want to go." From there, I mean, the rest is history. They just took off and ran with it.

I think you're a tremendously humble guy because it sounds like you've identified the name didn't necessarily properly bring you guys forward, that it was confusing. I think for you guys to go Apple Store-feel down to "How do we make this lounge of the future where people would actually want to come and sit down?" As you transition from, what is a retail experience to an experience where people are almost extending their stay and consuming the product on site. That'll be tremendous. Obviously thinking about the future and thinking about, what these lounges might look like, but also thinking about maybe drawing inspiration. Are you following any other emerging software markets industry? We talk on the show about crypto and Metaverse and all sorts of things that are coming down the line. What are you keeping in your orbit in terms of things you're watching as you continue to hope for future legislation that allows for continued growth?

I will say, I definitely keep an eye on a lot of the things that you just mentioned. If you're asking me, "Is there a world in a not so distant future, where someone immerses themselves into a digital experience and engages with a virtual dispensary in the Metaverse to be able to pick products, buy them in real-time leveraging a cryptocurrency, and then has it delivered to their door in less than two hours?" Yeah, that's a no brainer, right? It's going to happen, the trains left the station, whether we like it or not. I have a young son, and I don't like it. But I think it's inevitable that you're going to see just a continued ubiquity with regards to digitally immersive experiences. So whether that's VR, AR, the Metaverse, all of these things which are just the internet, you're going to continue to see that spread. For us as an industry, people that look in crystal balls usually end up eating glass. So, I'll be pretty careful about what I say here. I think there's very little that this country agrees on. But 68 or 69% of the country agrees that there should be national federal change to the regulatory environment with regards to marijuana. Something like 9 out of 10 surveyed or likely voters say there should be some sort of change, whether it's medical or adult use, to the states in which they live. That's bananas. We don't agree on anything. I'm sure that Disney World at this point doesn't have a 68% approval rating. It is like pizza. Maybe pizza is the only thing that this country agrees on over 70%. Pizza is good. So normalization, from a federal regulatory as well as the state regulatory is inevitable? It's a matter of timing. And it's also a matter of how it happens. What does it look like when it happens? I think we as an industry have to recognize - whether everyone does or not - that we are legally selling a product that has disproportionately affected communities of color, the inner cities. There are people serving prison terms all over the country right now, for doing what we do every day. We're doing it quasi-legal, because it's still federally illegal. I think about how those changes happen, and how they happen in a way that does the best that it can to serve those communities, to bring people into this ecosystem. I think that's the development that we're all watching. New York - the big news out of New York - Governor Hochul came out and said that the first 100 I think licenses for retail are going to go to social equity applicants that have either been convicted of a non-violent marijuana offense or their family has been directly affected by it, I believe is the way that it was written. I think that all these changes will happen. The support is there from the American people. And it's only growing.

With each election cycle, we see more states coming on board and at some point, there's a tipping point. This stuff doesn't necessarily happen in ones and twos. It’ll be an exponential change. While we're in this tough world of regulation, each state has its own way and its own approach to how they want to handle it. I guess what I'm curious about is, how you're balancing your tone and your messaging around recreational versus medical? How is that playing out in all of the different markets you're in?

I think you have to be careful. There are very clearly providers - I think specifically when you look at markets like California or Colorado, especially California, in LA, where you have operators that are, "We're just adult-use recreational in the sense that we sell the best flower" and that's their messaging when you go into the retail experiences. These are very narrowly focused platforms. We cannot do that, as an operator. One, we've built an enormous following and a lot of trust in medical. We serve a lot of patients and have no desire whatsoever to alienate those patients. We also recognize there's an incredible opportunity for adult use and recreational users. I think for us, it comes down to something pretty simple, which is whether you're using this as medicine, or you're using this as something recreational. Quality is one thing, quality and consistency are something that never goes out of sight. Everybody can agree on that. If you're standing in line and someone is treating a chronic neuropathy, and someone else is saying, "I'm literally going to a concert in two hours" they can both agree they want the safest, highest quality, most consistent experience products possible, because it's going in their bodies. Whether you're a patient or a customer, we want to focus on education to make sure you're getting the right products, so that you have the best possible experiences, and then from a cultivation and manufacturing point of view. Again, whether it's medicinal or recreational, we are focusing on quality and consistency. What you think you're going to get is exactly what you're going to get. And, it's going to be in the safest, highest quality form possible when you consume it.

One of the things I heard in one of your interviews is typically when you're first getting into a market, as part of market activation you do a lot of out-of-home, then programmatic. Out-of-home in one case, a billboard of yours had messaging saying said "We paid for this billboard with weed."

We played with that one a little bit. I will tell you the one out-of-home that we've become most famous for and the one that everybody always talks about, is around the holidays. We did a campaign that says you've got in-laws, and we've got cannabis. We had arrows pointing out the dispensaries in every market. It's worked really well. We’ve had people - I've had people - send me emails. I've had people send me direct messages on LinkedIn, standing on the street in front of that in-law thing being like, "You got me ready for my crazy uncle at Thanksgiving." The world is crazy right now - I would absolutely run an out-of-home campaign right now that was like "What the world needs is a lot more happy, hungry, and sleepy." But, we're living in crazy times and I think what we saw with the meteoric adoption and rise of the industry during the pandemic, is everybody's just looking for a way to calm down a little bit. Having products that you can legally go buy in these markets that are interchangeable with a glass of wine for many people at the end of the night - get a great night's sleep and wake up with no hangover. Not a sales pitch, but it's true.

To your point to it's getting easier and easier. I mean, now with seltzers and all sorts of other interesting products, it is something that can be swapped in for that glass of wine at the end of the night, or, or who knows what. I think that's in some ways changing the game. I did hear in one of your discussions about how widely your target customer - the personas you work with in each state - vary so widely. It really was amazing, in New York City versus somewhere rural. How do you keep tabs on that customer as the market is just continuing to evolve and as the stigma fades or other reasons that bring new customers that have never experienced the brand or retail cannabis before?

Exactly what you just said. I gave a talk a year and a half ago, and it was one of those moments that people keep coming back to. It was specifically about the customer set in New York City. I talked about "Hey, all of you can probably take a guess who our average customer is in a state like California, or Colorado, or Arizona, right? But what if I was to tell you that the average consumer for Columbia Care right now in Manhattan is a 55-to-64 year old female with an incredibly affluent high net worth, who is using it as health and wellness and medicine?" Everyone just sort of paused and was like "Yeah." That's continued to change, as we've seen an expansion of the medical program, introduction of Flowr, that customer changes. That's why cannabis has to be something that feels comfortable for as many people as possible, and has to be a curated brand at the retail level. We have to build product brands that speak specifically to each of those. But you know, you talk about that broad spectrum of people that we serve, I'll tell a quick story about when I moved down here. I relocated from New York to Georgia during the pandemic, we live just north of Atlanta. Probably about six months after moving in here, it's the pandemic, so you don't meet a lot of your neighbors. But I met the people who live right across the street - and I'm not going to out anybody - but this person is a older gentleman, we'll put them in the bracket of 55 to 64, and lives across the street-ish from me. We had met at a couple of get-togethers for the neighborhood or whatever. I was playing golf with some friends, probably about three, four months after that, and we ran into him. He was actually playing in the Club Championship, so him and a bunch of his buddies were all there. I saw him inside at the tournament, I was getting a hotdog or something, and he said, "Oh, hey, what's going on?" I called him Isaiah, "Hey, it's great to see you." He said, "Hey, come outside, I got to introduce you to some of my friends." Why does this guy want to introduce me to his friends? Okay, sounds good. I walk outside, it's a table of a dozen 50-67-year-old men, and they're all sitting there drinking beer. They're already done with their rounds. This guy says, "Oh, I want to introduce you guys to my neighbor, Jesse." And they all look up at me and say "Hi" and then went to get back to their beers. And he said, "No, no, the neighbor." And every one of them were like, "Oh, my God, I've got so much to ask you about, there's so much I want to know about what you do." I came home and I told my wife that I literally just spent 20 minutes getting behind on our tee time trying to explain the difference between CBD and THC to a table of a dozen 65-year-old retired men out there playing golf. But I feel like that's where we are at an inflection point, right now. We serve an incredibly wide spectrum of consumers across medical and adult-use, so you can't build campaign architectures that speak too narrowly, with assumptions of who it is that you're going to serve. The other thing, the other stat that I'll leave you with - which is terrifying as a marketer - we're about a 20-some-odd billion-dollar market right now, depending on what publication you buy into and I think they're all being very conservative. This is an $80 billion-plus market in the next three-to-five years. That means we don't know 75% of our customers. The indexes of what those customer segments look like and the type of messages and products that resonate with the people that we serve today are not at all going to be what's going to exist in three to five years.

I gotta imagine that a tremendous amount of this is staying in touch, seeing and monitoring who's actually entering the dispensaries to actually get a pulse on that because it is shifting so quickly. Last question I had for you really was we're seeing celebrities launching pot brands. How are you monitoring that space?&nbsp;

We're engaged in it. I help Mike Tyson launch his Tyson 2.0. As their national cultivation manufacturing partner, we've had conversations with a number of other celebrities throughout the space. I helped with Pitbull launching his CBD line N2P. For me, it's always been about authentic connection. Our customers, especially the customers that we serve today, are very protective of our industry. Many of them look at themselves as early adopters, as sort of pioneers of bringing to light what is now becoming more normalized, but two, three years ago is a very different landscape. So I think that when you talk to our customers, the one thing that they don't want to see is just anyone and everyone throwing their hat in the ring, " I sell weed now." They're kind of like, "That's ridiculous! It doesn't make any sense." When I spoke with Mike Tyson and his team - Adam Wilks, who's the CEO over there, who's the former CEO at one plant, and Chad Bronstein, who's the chairman over there, he runs Philo, one of the biggest technology companies in our space. What I came away from those conversations with them is that Mike is incredibly passionate about what the plant has done for him in his life. He's had obviously incredibly checkered past and has used cannabis as a way to fundamentally change himself as a person. That story - and the fact that he lives that - he smokes every day. He uses it heavily every day, has his own strains, and has his own favorite things from his own perspective. He can walk into a grow and look at plants and know that they're healthy. That level of authenticity is something that is incredible to be around. So for me, the celebrity brands come from celebrities to whom cannabis is a part of their life, and has either done something for them personally or for their family or whatever it may be. These are the things that I want to be a part of, and the stories I want to help tell and amplify. I think Columbia Care as someone who has is one of the oldest MSOs in the country and someone who's synonymous with medical research and working with universities and research partners. We have to stay committed to that. To find authentic use cases for how the plant can make people's lives better.

BONUS EPISODE: CANNABIS MARKETING with Jesse Channon