Luxury Marijuana Branding

Is Luxury Marijuana Branding the next big thing? Yes we think it is...Visit our services to learn more about how we can help you design branding and packaging for your luxury cannabis line.

"NEW YORK, United States — At a preview of their Pre-Fall 2017 collection, Creatures of the Wind designers Shane Gabier and Chris Peters had plenty to chat about — from new, waist-skimming silhouettes to a fabulous psychedelic print intarsia-ed onto a luxe fur coat — but they quickly homed in on a series of hand-embroidered looks. In particular, the deadstock army jackets and utilitarian shirting decorated with daisies, Victorian hookahs and several different varieties of cannabis plants, culled and redrawn from their “endless” archive of botanical prints. “Every single store is buying it,” Peters said.

Hyperbole or not, the heady days of pot-as-fashion are upon us, with Alexander Wang, Baja East, Jeremy Scott and others working cannabis motifs into their designs. It’s really no surprise, given that, even in the wake of the election of Donald Trump to the office of President of the United States, many leaders in the marijuana community believe that the drug is on the path to federal legalization.

As of November 9, 2016, medical marijuana was legal in 28 states as well as Washington, DC. Marijuana is fully legalised in eight states (and Washington, DC), including California, Massachusetts and Washington. (Although some of these laws will not go into effect immediately.) And, according to an October 2016 Gallup poll, 60 percent of Americans support the legalization of marijuana, up from 36 percent in 2005 and 12 percent in 1969.

And yet, the opportunities for the luxury industry to capitalize on the legalization of marijuana go far beyond incorporating a cannabis leaf into apparel designs. The first, most obvious, foray has been into accessories; vapourisers and pipes are now being reimagined through a high-design lens.

For instance, the e-commerce site Tetra — founded by three fashion and design-industry veterans — has earned accolades for its collection of modern instruments. “We started this because we realized the market didn’t have anything like it,” says Eviana Hartman, who started Tetra with partners Monica Khemsurov and Su Wu. “While there is a lot of innovation in the area, most of the players aren’t driven by aesthetics.”

Tetra, which launched in September 2015, saw a 40 percent increase in sales in October 2016 from the year previous. The retailer’s own collection, which includes a three-pack of rolling papers ($12), a simple pipe designed by New York-based product designer Jamie Wolfond ($65), and a white-bronze fog pin designed by Vancouver-based design studio Knauf and Brown ($36), is stocked at physical stores including ABC Home, Creatures of Comfort and Tenoversix. Other non-Tetra-branded items on the site include a $1,250 geometric table lighter and ashtray set handmade by Brooklyn-based glassblower Andrew O. Hughes and a $550 solid cast bronze seed bowl handmade in Chicago by interdisciplinary designer Steven Haulenbeek. According to Hartman, pipes and lighters remain the best sellers.

Just as flasks and cigarette cases have had designer makeovers in the past, it’s likely that pro-cannabis fashion brands will begin to create paraphernalia of their own (if they haven’t already). But if pot tchotchke is akin to a fashion house’s entry-level accessories, the marijuana itself is equivalent to a cash-cow fragrance. There is, after all, already a variant on the “OG Kush” strain of marijuana called “Gucci OG.”

“This is like fine wine, fine champagnes, fine cigars,” says Cheryl Shuman, a marijuana branding expert and founder of Beverly Hills Cannabis Club, which sells its high-end marijuana for about $700 an ounce. “It’s becoming more chic to talk about it. Like being part of a tribe, if you will.”

To be sure, wine and spirit companies — from Diageo, which owns Bulleit Bourbon and Cîroc, to LVMH, which owns Moët & Chandon and Veuve Clicquot — might look to branded marijuana as a new revenue opportunity in the not so distant future, especially as alcohol sales remain flat or decrease in the west. In 2015, global sales of alcohol increased by 2 percent, but the overall volume of alcohol consumed decreased by 0.7 percent — the first drop since 2001 — according to Euromonitor International.

“The growth trajectory for alcoholic drinks in the west has reached its finite limits and has been declining for a while now,” says Spiros Malandrakis, senior alcoholic drinks analyst at Euromonitor. “In terms of volume, if you look at margins across the west, cannabis could provide an escape route for multinational [conglomerates].

”In November 2016, Constellation Brands chief executive Rob Sands made news when he told Bloomberg that the beverage conglomerate was investigating opportunities in marijuana. “We're looking at it…” he said. "Why wouldn't big business, so to speak, be acutely interested in a category of that magnitude?"

In the US alone, the legal marijuana market is estimated to surpass $22 billion in annual revenue by 2020, according to a report by ArcView Market Research, with about 53 percent of the legal market coming from “adult,” or recreational, sales, not medical sales. In 2015, the legal market in the US reached $5.7 billion — about 8 percent of which came from adult sales — up 24 percent from $4.6 billion in 2014. ArcView projects sales of $7.1 billion for 2016.

Even with marijuana legalized outright in just eight states, there are already brands emerging that could be future prospects for acquisition. The most well known is Marley Natural, launched in February 2016 by Seattle, Washington-headquartered Privateer Holdings, a cannabis-focused private-equity firm that has raised $122 million in funding.

Named after Bob Marley through a 30-year licensing deal, Marley Natural — which, along with marijuana, sells personal care products and accessories — aims to be the Starbucks of marijuana, as some in the industry put it. “I think that comparison is premature, as they are a young company,” argues Katie Shapiro, an Aspen, Colorado-based journalist who covers style, travel and culture for online publication The Cannabist, and is also the digital editor Aspen Sojourner magazine. That being said, “It’s a beautiful line — a lot of their accessories and body care products I personally own and love.”

But if Marley Natural is on the path to becoming the Starbucks — or Heineken — of marijuana, what will be its Krug? Former Yoox Corp. president Clement Kwan is aiming to build just that with the early 2017 launch of low-dose line Beboe, the upscale marijuana brand he founded with tattoo artist Scott Campbell. Beboe, named after Campbell’s grandmother — who baked pot brownies for his mother when she was battling cancer — is just the first of what the duo hope will be several brands that live under the umbrella of For Success Holding, the company they founded in late 2014. Beboe will launch with two products: $25 pastilles infused with 5mg of THC/CBD and a $60 pre-filled vapouriser with low-dosage THC/CBD oil. (THC and CBD stand for tetrahydrocannabinol and cannabidiol, two active ingredients in cannabis.)

“It’s really bringing a level of sophistication and fluidity to this industry,” says Kwan, who spent time working as chief operating officer of Privateer Brands and Marley Natural before beginning work on Beboe. However, Kwan’s experience with marijuana goes back to university; he put himself through UC Berkeley by cultivating and selling product to cannabis clubs, which were the preliminary model for modern dispensaries.

Kwan is now applying his luxury industry knowledge to the making, selling and marketing of marijuana. “It’s putting the customer first as opposed to the product,” says the executive, who also intends to open multi-brand stores in California. “Right now, it’s really product driven, but it’s missing the branded piece and the storefront itself. The retail experience is horrible, choppy. We need to build the experience.”

Kwan plans on building that experience through presentation (including distinctive packaging and experiential retail), customer service and a message that appeals to marijuana aficionados that wouldn't consider themselves “high-dosage stoners.”

Of course, brands like Beboe have more than a few roadblocks ahead of them. During the Obama administration, the path to federalization in the US seemed possible, especially when the House of Representatives passed three amendments in 2015 to slash the Drug Enforcement Administration’s budget by $23 million, indicating that the end of prohibition was within reach.

While many agree that President-elect Trump is unlikely to fight the legalization of marijuana on a state-by-state level, it is less likely that a federal law will be put in place in favour of legalisation during his administration. This means, broadly, that the US Postal Service will continue to be forbidden to ship marijuana products because it is a federal agency.

Marijuana companies are also not typically recognized by banks as legitimate businesses, meaning that the industry, for the most part, remains reliant on cash. That’s because financial institutions must follow federal laws — which ban marijuana — even if a state has legalized it. “The situation is not clear enough for a big multinational to get stuck in at the moment. I don’t expect them to be active for a couple of years until legalization is federalized,” Malandrakis says. “But there is potential in the medium to long term. The way things are looking at the moment, I don’t think [legalisation] is reversible. History tells us that whatever happens in the US tends to slowly happen across the west and from that point, globally.”

And as, Shapiro adds, “There’s also a big boom on the lifestyle side with smoking accessories to enhance the experience.” These products, with stores like Tetra representing the high end, generate millions, potentially billions, of dollars a year in sales. The vapourizer market alone — which also includes products used to smoke tobacco — was valued at $3.5 billion in 2015 by Wells Fargo.

What’s more, the inability to ship product may in turn create a new sort of shopping tourism. Just as a certain contingent of consumers visits Paris to buy Louis Vuitton handbags, others might visit Los Angeles to indulge in their favourite pot product. Companies like For Success Holding also see opportunity in Canada, where the substance will be made legal in the spring of 2017. (It will be the first G7 nation to take this leap.) Globally, several countries — including Israel, Germany, Australia, and Spain — have made strides toward full legalization.

For entrepreneurs like Kwan, the belief is that the momentum is only growing. “When the luxury conglomerates come in, or even people like the wine industry, they’re going to want people who have things that are already built out,” he says. “No one wants to recreate a wheel.”

BY LAUREN SHERMENT, Business of Fashion

 

Branding and Packaging Pot in California - What Next?

Many of us in the cannabis industry are holding our breath for the November 8th elections in California where Proposition 64, which would legalize marijuana for recreational use will be voted on.  While California has allowed for medicinal marijuana use with the use of a medical marijuana card for sometime now, recreational use would thrust California into a whole new ball park. States such as Colorado, Washington and Alaska have already legalized recreational marijuana use but California's economy is so large that sales are estimated to be $1 billion compared to Colorado's $135 million.  

So we ask ourselves...what does this mean for cannabis entrepreneurs? From our perspective the time is now. As soon as the legislation passes thousands of companies will jump into the action trying to stake out a claim. Those that are going to rise to the top and actually be viable are those that are serious about their products. And we don't mean just the highest quality cannabis. Branding and packaging will play a key role in creating professional looking products that stand out in a soon to be very crowded marketplace. Players like Bloom Farms and Kiva Confections are already making a name for themselves with  professionally blog worthy branding and design that measures up to any other product category. Often branding and packaging are an after thought for start up brands and many entrepreneur don't budget enough for design which is what your customers are going to see first. You should estimate anywhere between $2500 and $10,000 for your branding and packaging design depending on what type of product you are selling and how many different products you have. Getting customers to see your product in a store and want to try it are the key functionality of your branding and packaging design and are the drivers for making your product stand out.  

Need help designing awesome branding or packaging for your cannabis products? Second Nature is a fully integrated branding and design agency focused on the cannabis industry.  Contact us here for a consult.

Investing in Cannabis - Mark Cuban Says No

As the green rush continues the discussion about innovators and imitators heats up. Billionaire investor Mark Cuban has some interesting points but we still think there is plenty of room for innovative cannabis brands to define the marketplace.

Pot is big business.

And it's only getting bigger.

In November, nine states will vote on whether to legalize marijuana, reports Business Insider's Ben Gilbert, and five of those votes will include recreational use as well as medicinal: Massachusetts, Maine, California, Arizona, and Nevada.

If those ballots pass along with medicinal marijuana ballot measures in Montana and Florida, reports Business Insider's Melia Robinson, those markets will account for $2.7 billion in additional marijuana sales in 2018. Research by Arcview Market Research, a leading publisher of marijuana market research, and its big-data partner New Frontier projects this number to grow to nearly $8 billion by 2020.

At a late September breakfast in Beverly Hills, Entrepreneur's Kim Lachance Shandrow asked five of the six Shark Tank Sharks how they feel about the growing marijuana industry, and whether they'd invest.

Dallas billionaire Mark Cuban told her he'd keep his money out of it:

"Would I invest in the cannabis industry? No. Not because I have anything against pot. I don't care. But right now it's a gold rush. When everybody's rushing in it's hard to keep track of what everybody's doing because there's a new startup every single day.

"I think the oversaturation of the market creates a very difficult challenge. Plus, Snoop's in it [laughs]. And if Snoop Dogg's in it, it's over for everyone else." 

He went on to highlight the difficulty of getting involved in an industry so hampered by regulations and red tape, and said again he thinks we're late to the game:

"There's a saying that I live by: 'First there are the innovators. Then there are the imitators. Then there are the idiots.' The three I's. You have to know which one you are, and I think already in the cannabis industry, we've at least gotten to the imitators and we may already be to the idiots."

You can read Cuban's entire reaction and the rest of the Sharks' responses — with the exception of Daymond John, who wasn't present — on Entrepreneur.

Branding Your Cannabis Product

With the legalization of both medicinal and recreational cannabis in many states throughout the country many entrepreneurs are wondering how best to launch their own line of cannabis products. Whether you are contemplating launching an edible product, a beverage or something smokeable the bottom line is the same, your product must be well branded to stand out in the marketplace.

Here are some questions to help you get started creating a unique and memorable brand for your cannabis company:

1.     Who is my target market? Understanding your target market and finding a unique niche for your brand is a must. Is your product targeted towards medicinal users who are suffering from a medical condition, or recreational users? What age demographic will be best suited to your product? Does your cannabis product skew towards a specific age group or gender?

2.     What makes your product unique? This is an important question to answer and can directly effect the look and feel you want your cannabis branding to have.

3.     Where will your product be sold? Understanding the retail market for your cannabis product and how it will be shelved and dispensed is an important aspect and will affect how your branding hierarchy and messaging should be designed.

4.     What packaging will be used for your product? When developing branding the size, substrate and shape of your packaging can play a big role. For instance if you have small package but a long brand name you may want to run the name vertically along your package instead of horizontally so you can maximize the size of your branding.

5.     Beyond the design of the logo for your cannabis product the branding encompasses all other materials that create the unique personality of your brand. Thinking thru how the brand will be portrayed in your messaging, on your website and in social media is an important part of making your brand distinguishable and consistent.

These are just a few of the considerations for launching your cannabis brand. Need help designing your branding or packaging, defining your messaging or creating your website? Second Nature is a fully integrated branding and design agency focused on the cannabis industry.  Contact us here for more information.

For Ganjapreneurs, Lessons of Craft Beer Branding Are Key

The legalization of recreational marijuana in Colorado, Washington, Oregon, and Alaska creates an enormous opportunity for emerging brands to claim space in what’s being called the fastest growing industry in America. And it’s not just limited to the weed itself, but extends into the realms of branded merchandise, luxury level vaporizers, dispensary shop design, and wellness products. Still very much a wild west market, excellent design and sophisticated, thoughtful messaging at this early stage can drive value for brands across the board and into the future. For lessons on how to do this, it’s particularly instructive to look at the developing market of marijuana against the backdrop of craft beer in the ‘80s and ‘90s. That industry’s rapid growth, and the branding which helped drive it, provide a basic roadmap for the burgeoning industry of legal weed.

According to The Brewers Association database, there were just 92 active breweries in America in 1980. A decade later that number would triple. By the year 2000 there were 1,566 breweries open for business —  an outstanding example of growth in the craft industry that didn’t just happen because of what was in the bottle. As microbreweries flourished, so did a frenzy of competition for a place in a still-niche market. While craft brew package design of the ‘80s and ‘90s was frequently cartoonish, corny, and derivative (and for the most part appealed to an “in crowd” of beer geeks who admittedly cared more about what was in the bottle than the label outside of it), an opportunity to reach a wider audience was on the horizon. But it would take an investment in thoughtful branding to access it.

The mid ‘90s marked this pivot in thinking, and with it tactics that could drive brand value in craft beer. Early adopters of thoughtful branding began to see a direct connection between good design and business success. In the four years between 1991 and 1995, annual volume growth in craft beer jumped from 35 to 58 percent.

Companies like Brooklyn Brewery, Odell, New Belgium, and Flying Dog are excellent case studies illustrating this change. These craft breweries saw an opportunity to establish a solid brand identity through design that represented the company’s ethos and the unique story the brewery wanted to tell. They envisioned this investment in smart branding early in the game as the key strategy to differentiate and elevate their brand within an increasingly cramped market.

Brooklyn Brewery opened it’s doors in 1987. In an effort to claim a place in the market, founders Steve Hindy and Tom Potter called on graphic designer Milton Glaser (creator of the iconic “I Love New York” logo) to help them create their brand identity. Glaser first swayed the team into a name change (from  Eagle Brewing Company) and then designed the logo that’s recognized around the world today. Based on sales volume alone, Brooklyn Brewery was ranked 11th place in 2014, according to The Brewers Association’s Top 50 Craft Brewery list.

In 1989 Kim Jordan and Jeff Lebesch opened the doors of New Belgium Brewery, and unveiled their Fat Tire Amber Ale to the public. The beer itself was a success on its own, but consumers didn’t associate it to the brewery, so New Belgium invested in a rebrand to restore the lost connection. The company went on to become the fourth largest craft brewery in America. Jordan credits much of that success to the artwork on the label. “Our beers were good, our labels were interesting to people, and we pretty quickly had a fairly robust following,” she said.

Another Colorado brewery, Odell Brewing Company increased sales by 40 percent after TBD designed a rebrand of their flagship beers in 2007. Numerous design awards followed, and by 2014, they were ranked 34th based on sales volume.

George Stranahan, founder of Flying Dog Brewery, was introduced to illustrator Ralph Steadman by longtime friend Hunter S. Thompson. Steadman, whose illustrations graced the famed author’s works, crafted an illustration for the brewery in 1995. The new design communicated the ethos behind the brand — adventurous, left-of-center, funny — that set it apart from peers. In a list of top 50 breweries put out by the Brewers Association, Flying dog was ranked 37 by the Brewers Association in 2014 .

When faced with numerous competitors, this ethos of independence and innovation became an asset for craft brewers who invested in scaling that ethos with sophisticated design and messaging into lasting brand value. And doing so when the industry was relatively young proved to be game-changing.

The same lessons apply in the cannabis economy today.

The Marijuana Policy Project predicts that by 2020 most US states will legalize weed entirely. Colorado dispensaries sold nearly 700 million dollars worth of marijuana products in 2014 alone. Nationwide the industry is worth $2.5 billion today. If legalized across all 50 states, the US market for it could reach $37 billion.

Like their craft beer forbearers, marijuana brands must stand out from the pack early on by investing in a strong visual identity, name, and resonant messaging. It’s not enough to have an attractive package on a shelf anymore. Businesses need to connect to consumers on an emotional level by creating an experience through design of goods or brick and mortar spaces. Good design communicates what your brand is about. It generates equity among audiences, differentiates you from the competition, and becomes something the consumer can, and will want to engage with. Establishing brand value while the cannabis industry is still young will pay lasting dividends.

Two things in which brands can invest right off the bat are designs that are adaptable to local regulatory laws and utilizing partnerships to differentiate and drive success. One of the biggest challenges in developing brand strategy for a cannabis product is ensuring that the product not only has unique messaging, but that the design itself can accommodate the inevitable changes in packaging regulations. Even the Doggfather himself left some wiggle room for change in the packaging for his cannabis product Leafs by Snoop.

The bottom line is that good design, strategic thinking, and evocative messaging are the basic bones behind business success — whether it’s a dank IPA or weed itself — and investing in premium branding at an early stage allows ganjapreneurs to put their best foot forward into the future of a booming industry.

by Eleah Lubatkin