The future of cannabis is female.
More than 200 cannabis entrepreneurs, investors, and employees gathered at the University of California Berkeley campus for the inaugural SheCann Summit, a day-long event aimed at encouraging gender diversity, ethnic inclusivity, and social responsibility in the cannabis industry.
Thursday’s summit at Berkeley’s Haas School of Business featured lively discussions about the cannabis legal landscape, investing and fundraising in the industry, marketing challenges, and conscious consumerism.
“The important thing is to share information,” said Fahed Essa, of the Berkeley Cannabis Industry Club, one of the event’s organizers. “And we can leave here today holding hands.”
Here are some highlights from the panel presentations at SheCann:
The world of legal cannabis.
Law experts, including representatives from the Drug Policy Alliance and the National Cannabis Bar Association, discussed how business owners can navigate the ever-changing regulations around cannabis. All agreed that while federal legalization is inevitable, varying laws in different jurisdictions have created murky legal territory further complicated by a still-thriving illicit cannabis market.
“Legal cannabis can’t compete with the underground industry,” said attorney James Anthony. “You cannot repeal the law of supply and demand.”
Rodney Holcombe, of Drug Policy Alliance, says until federal banking restrictions change, states should set up their own credit unions to support cannabis businesses. He also believes resources devoted to shutting down black-market operations could be better spent supporting legal endeavors — particularly for people of color, who’ve borne the brunt of prosecutions in the War on Drugs.
Federal legalization is “a bit of a red herring” to Shabnam Malek, an attorney who founded the National Cannabis Bar Association. “A stroke of a pen doesn’t solve anything at all, really,” she said. “It’s a starting point.”
As with any business, capital is the main barrier to entry in cannabis, the attorneys said. That often leaves women and people of color on the sidelines.
“If you don’t have $2 million to play a little high-risk gambling with, I don’t think cannabis is for you,” he said. “We live in a world of differential enforcement.”
That’s why it’s so important to have women in the boardroom, Malek said.
“You need diversity at decision-making and wealth-owning levels,” she said. “That is how you create change.”
The SheCann panel discussion between investors and company founders was like a crash-course in business basics for aspiring cannabis entrepreneurs.
Raven Duckett, cofounder of Community Gardens and Hurban Society, urged potential business owners to put together their executive summaries before they start fundraising: “It may be really brief, but it gives a good overview of your business and allows you to communicate that to investors.”
Erin Gore, founder and chief executive of Garden Society, said it’s also important to focus on your MVP: minimum viable product.
“It gives validation to investors and to you,” she said.
Raising money is a courtship process, Gore said. She recommends building relationships with potential investors you can turn to as your business grows. And she cautions against “getting into bed with anybody that you don’t like,” because financial supporters become partners in your brand’s success.
Before approaching investors, thoroughly think through your business approach and potential obstacles so you’re prepared to discuss them, said Tahira Rehmatullah of Hypur Ventures investments, adding that she’s more likely to partner with people who can “think on their feet.” And spend time researching investors to discover what their interests and strategies are: some funds focus on seed money, where others are dedicated to growth.
“Your pitch will not be the same for every person you’re talking to, and if it is, you’re doing it wrong,” she said.
Get a lawyer on your team, too, Rehtamullah said: “You’ll need that person way sooner than your think.”
And delay fundraising if you can, said Maggie Connors, founder of Besito, a vape company set to drop next month. Investors are becoming more sophisticated and niche around cannabis, she said, so waiting until your concept is solid could improve your company’s bankrolling opportunities.
Finally, Rehmatullah said, remember that practicing your pitch and getting rejected is part of the fund-raising process.
“You’re going to get a hundred nos before you get a yes,” she said. “You get used to it and you get better at the story you’re trying to tell. You have to learn through each of those experiences, and you’re doing yourself a disservice if you take things personally.”
The Realities of Cannabis Marketing
Rapidly changing regulations that vary from state to state and city to city create major marketing challenges for fledgling cannabis companies. Traditional advertising channels have been off-limits to most operations until recently, and even still, there are significant hurdles around ad placement and access to products.
But the four experts talking marketing at SheCann said the keys are to be nimble with your approach, savvy with spending and open to engaging with customers through new media platforms.
“You can put a billboard up and launch an amazing marketing campaign, but if you’re doing that in a city with one dispensary and a million people, you’re wasting your marketing dollars,” said Kristi Knoblich, cofounder of Kiva Confections.
When Knoblich started her company nearly 10 years ago, she relied on very personal marketing, educating distributors about Kiva products and visiting dispensaries where she could connect directly with potential consumers.
“You are your own best cheerleader,” she said.
Varuni Palacios, who brought her marketing expertise from Gwyneth Paltrow’s goop to Miss Grass last year, said the traditional four-prong advertising approach isn’t always available to cannabis companies.
Typically, brands tap social “to build community, earned to build authority, owned to build authenticity and paid-for scale” she said. “The biggest hurdle is not being able to have paid-for scale” to grow awareness. Educational content has proven be a powerful bridge for Miss Grass, she said, and other company founders agreed. With so many brands and products flooding the market, consumers need information to find their entry point.
New media is another valuable marketing ally for cannabis companies. Palacios said. Aligning with social-media influencers and providing experts for podcast discussions are ways of amplifying a brand to audiences outside the industry.
Nidhi Lucky Handa, who introduced her LEUNE brand of pre-rolls and vapes on Eaze last year, said she chose the platform because it provides sales metrics. “I know what SKUS are selling and what levers I can push and pull,” she said.
Market data also influenced the development of Kiva’s newest product, Camino gummies, which initially started out as a hard candy.
“Data shows that gummies were the leading candy, even over chocolate,” Knoblich said. “Having data available is absolutely key, otherwise you’re developing products in a complete vacuum.”
The experts agreed that despite the challenges in spreading the word about their brands, it’s thrilling to be part of building a new industry.
“This is a super amazing time,” Knoblich said. “The opportunity is ours to lose.”
The Importance of Conscious Consumerism
The entire SheCann summit was based on conscious consumerism and building diversity into the cannabis industry from the ground floor.
Cannabis companies like Asher Farms, Papa & Barkley, The People’s Dispensary and Undefined Beauty (a CBD cosmetics line set to debut in the coming months) have integrated sustainability and social responsibility into their brands — not just because it feels good, but because it makes good business sense.
“Sustainability is conscious consumerism,” said Julia Jacobson, cofounder of Asher Farms, adding that it takes a lot of power (and pesticides) to make indoor grow operations thrive.
“Growing outdoors using sunlight, you get better product,” she said, “and your margins are healthy enough that you can get to the end of the industry without being squashed.”
Tiana Arriaga, Papa & Barkley’s head cannabis buyer, says the farmers she works with aren’t just business partners, they’re neighbors. They care about their land and how pesticides impact soil and communities.
“It’s a lot of work to grow a clean product,” she says. “The best way forward is to pay people what they’re worth and invest in those relationships. Quality always carries forward.”
Dorian Morris of Undefined Beauty is practicing social responsibility into by sourcing exclusively from minority-owned businesses. The People’s Dispensary follows a similar ethos, actively employing (and profit-sharing with) people of color, members of the LGBT community and those who’ve served criminal sentences for marijuana crimes.
“We wanted to create an equitable business that would create wealth for everyone,” said co-founder Charleen Caabay. “Most importantly, the people who were affected by the War on Drugs, how are they going to benefit as well?”