The 2012 National Marijuana Business Conference Was The Best Place To Learn How To Invest And Profit In The Booming Marijuana Industry
The second day of the 2012 National Marijuana Business Conference in Denver, Colorado was even better than the first, if that is even possible (To read my Day 1 recap, click this link). The morning started off with back-to-back keynote speakers. The first was Aaron Smith, Executive Director of the National Cannabis Industry Association. Mr. Smith's presentation was title, '2013 Legislation: How to Impact the Future - Your Next Steps.' Aaron started his speech with summaries of the historic 2012 Election results, to which the crowd reacted in applause several times. I had to pinch myself to remind myself I was indeed awake and living in a country where marijuana prohibition has ended in two states.
Something that I found very interesting from Aaron Smith's speech was that Denver tax revenues from the medical marijuana industry were enough to cover 98% of the municipal parks system, which is the largest in the United States. Imagine if each city took the same approach as Denver. How much money would be generated to help shrinking government budgets at the local level? That's something I think every politician and agency head could get on board with! A theme that Aaron Smith hammered home to the people in attendance was the need to unite and keep fighting for reform. "One business is one business." Aaron Smith said. "Working together, we have a high potential to change the game forever."
The next keynote speaker was Steve DeAngelo, Executive Director of Harborside Health Center. If you don't know who Steve DeAngelo is then chances are....seriously, does anyone not know who Steve DeAngelo is by now?! Everyone in the crowd certainly did, because the roof almost blew off the place when he was announced. Steve's presentation was titled, 'Threading the Needle: Reaching Success Through Volatile Times.' If anyone knows what to say on that subject, it would absolutely be Mr. DeAngelo, who's ongoing battle with the federal government has been highly publicized all over the media.
After giving some words of encouragement and talking about the new momentum for cannabis after the historic election, Steve DeAngelo began to discuss the fact that states with medical marijuana experience are going to be more likely to look at legalization positively. Steve told the crowd to "use this as a path to expanding the market." Something that Mr. DeAngelo said that I really liked was, "The best way to survive business volatility is to know if you're up for risks. Connect to the movement; not just the industry." That's something that I think a lot of business minded people in the movement don't always understand - marijuana business and marijuana activism go hand in hand.
Steve DeAngelo offered up three tips to survive the often turbulent waters of the marijuana industry. The first was to develop end user products with multiple sales channels. That way if your dispensary gets shut down, you have a Plan B in place. The second tip is to focus on your public image. Community image is key - engage your local community. Help the community understand that this is about wellness, not intoxication. Steve's third point builds off of the second point - A focus on wellness is not just smart politically, it's also good for business. Steve DeAngelo stated that, "the wellness market is much larger than the intoxication market."
After a brief break, a panel titled 'When the Feds Come Knocking: Handling Raids, Civil Forfeitures And Other Attacks' began, hosted by panelists Eapen Thampy (Americans for Forfeiture Reform), Robert J. Corry Jr. (Corry & Associates), and Henry Wykowski (Henry G. Wykowski & Associates). Asset forfeiture reform is something that I don't think gets nearly enough attention from the movement. At the end of the day, that's what it's all about from a law enforcement standpoint. Marijuana businesses make a lot of money, and if the cops bust them, they get a huge, huge chunk of what they take. Eapen Thampy pointed out that 'forfeiture has become a preferred method of federal prosecution for medical marijuana businesses.'
Rob Corry has been a hero of mine for a couple of years now, and I was disappointed that I didn't get a chance to talk to him at the convention. Hopefully he is back next year! Mr. Corry pointed out that the forfeiture reform panel discussed and felt that the second Obama administration will not take action against Amendment 64. There has been some huffing and puffing in the media about it, but at the end of the day, I really hope the Obama Administration respects the democratic process in both Colorado and Washington State.
Rob went on to encourage the crowd to 'push for state directives banning local law enforcement from cooperating with the DEA on marijuana raids, like 'safe harbor' policies for immigration. That is such a good idea, that I am going to start pushing for something like that in Oregon as soon as I can, even before we pass legalization. I saw Henry Wykowski speak on another panel during day 1 of the conference, so I was excited to see him talk again. He offered up this advice to help with the possible nightmare that is a raid on your marijuana business - keep your cool, train employees to not say ANYTHING, keep encrypted files backed up offsite, ask who's in charge, to see a warrant, ask what agencies are involved, ask to video the raid, and to ALWAYS call your lawyer.
The next presentation was by Brian Vicente (Vicente Sederberg, LLC) and KC Stark (MMJ Business Academy), titled, 'State Marijuana Legalization: How Could it Affect Your Business.' This presentation was something I was really looking forward to, considering the fact that Brian Vicente was a Co-Director for the Amendment 64 campaign. He spoke from the political and industry side of things, which I'm not sure too many other people on the planet can say right now.
Brian knows the Amendment 64 law inside and out considering he co-wrote it, and he pointed out some things that are important to keep in mind. 1) Businesses in Colorado are relying on the Governor and legislature to implement Amendment 64 in an orderly fashion, but there are no exact timetables at the moment. 2) All medical marijuana laws in Colorado remain in full force and effect. Dispensaries cannot just sell to anyone. 3) The excise tax in the Colorado law will not apply to registered patients, only to the general public. 4) In Colorado, communities can decide to allow retail marijuana shops, much like wet/dry do with alcohol. 5) Home cultivation is allowed. Brian Vicente said something about point number five that I thought was clever - "People can grow at home, like people can brew beer. But how many people actually brew beer vs buying a 6-pk?"
After the lunch break, there were a total of 8 panels that I skipped back and forth between. There were as follows:
Whether it's concentrates, flower, medibles, and beyond, the world of marijuana consumption is expanding rapidly. Long gone are the days when you had to choose between using an apple or a rolling paper. If there was one thing that I took from this presentation, it was that non-intoxicating cannabis wellness products will be huge mainstream offerings. As science continues to unlock the healing powers of cannabis, more and more products will be sold to people that don't want to necessarily get high - they just want relief. Although I'm not one of those people myself, I know a lot of people that would consume cannabis products if it didn't impair them.
East Coast Opportunities: How to Capitalize in the Northeast and Mid-Atlantic - Richard Evans (EvensCutler Attorneys), Jason Klein (Law Office of Jason Klein, PLLC), and Erik Williams (Executive Director, Connecticut NORML)
The East Coast is a starkly different business landscape than it is out West. Medical marijuana programs are more restrictive, and with that, the number of business opportunities. Erik Williams pointed out that Connecticut will have a minimum of 3 growers and max of 10 growers for the whole state. His guess is 6, but even if it was 10, that doesn't leave much room for many people to get in from a business standpoint. He recommended looking at a multi-state model if someone is considering investing in the Northeast. Erik Williams went on to say that if Massachusetts issues rules on MMJ by May (unlikely), then licenses will be issued by summer and dispensaries will open by the end of the year. Dick Evans highlighted the fact that right to farm laws will impact the ability of Massachusetts' local officials to zone and regulate medical marijuana garden areas of 2 acre minimum plots.
Earlier in the day I had the wonderful opportunity of talking with Jason Klein and the situation in DC. We both pointed out the contradiction of the federal government raiding medical marijuana across the Western United States, even though medical marijuana will be sold very soon down the street from Congress and the White House. Mr. Klein pointed out in his section of the presentation that D.C.'s law will allow for up to 570 plants total in all the district, which is 'minuscule compared to the population size.' As Jason Klein told me before the presentation, and to the crowd during the presentation, 'expanding the limited qualifying conditions list is the important near-term goal for DC's medical marijuana program.'
MMJ Marketing and Advertising Strategies That Work - Micah Johnson (Cannapages.com), Andrew Shotland (Local SEO Guide Blog), and Derek Lebhan (Cannaline)
If there is any area that peaks my interest the most in the marijuana industry, it's marijuana advertising. It's such an inegma to me, as there doesn't seem to be any 'go to' source on the subject. Almost all of the literature out there is based around marketing a dispensary, which was adequate when medical marijuana represented an overwhelming majority of the profitable cannabis industry. But all of that was turned on it's head when Washington State and Colorado passed their legalization initiatives.
I think a speaker from another panel, Tripp Keber of Dixie Elixers, put it best when he stated "On Nov 6 there were 105,000 registered medical patients in Colorado. From Nov 7 we're talking about an addressable market of one million plus customers. This is explosive, hockey stick growth, a watershed moment." By Mr. Keber's estimation, which I find to be pretty accurate, medical marijuana will only represent 10% of the overall market, at best. The marketing and advertising strategies for the cannabis industry need to reflect that fact.
Long gone are the days when inventors and entrepreneurs needed to focus all of their marketing energies on getting their product or service into as many dispensary locations as possible. Now they have to re-focus their marketing strategies towards brand marketing, the same as any other product or service in any other industry. Think about it - if 'X' soda company simply put their products on the shelves in as many stores as possible, yet did no marketing to make their product familiar with customers BEFORE they walked into the place they are going to buy products, how much product would they sell?
Humans want to purchase things they are familiar with; the marijuana industry is no different. Unlike a dispensary, where the budtenders have a relationship with their limited customer base and can tell them about new products as they see fit, the purchasing experience is going to change rapidly. Customers from outside of legalized states will be coming to Washington and Colorado to buy products that they have seen online or in some other way in their area. Businesses need to calculate for this.
Have a vaporizer or sometime of electronic pen that people can use to smoke concentrates out of? If so, you need to think about how a customer is supposed to choose your product out of the dozens if not hundreds of other products virtually exactly the same as yours. Will 'having it on the shelf' be enough? What if you have a cannabis infused product such as a beverage or edible? Are you going to do the marketing work it takes to become a name brand like Pepsi or Oreos or are you going to be one of those generic lame brands that people only buy if it's on sale? If you can't tell, I have a lot to say about this issue, so plan on several articles on this subject in the near future :)
Raising Arizona: How to Ramp up in the New Marketplace - Kris Krane (4Front Advisors) and Ryan Hurley (Rose Law Group)
It was very interesting to hear about the rollout of medical marijuana safe access points in Arizona from people working on the ground. Something that I have been pointing out to people that e-mail me from Arizona, and panelist Kris Krane touched on, is that there wasn't a proper vetting process of eventual dispensary owners in Arizona. Anyone could enter the lottery, and since the winners were picked at random as opposed to a skill based selection process, there will no doubt be some dispensaries that are better than others. According to Ryan Hurley, "permits have been issued, 9 months are left for operators to build and open doors in Arizona."
It was also interesting to hear about how people are jumping the gun on the dispensary rollout and are opening safe access points anyways. It reminds me of Oregon, where people are using layaway hydroponic equipment programs, opening private clubs, and my personal pet peeve, taking 'donations.' People that do things like that make it harder for people that are actually following the process, and often times, patients get caught in the crossfire as Kris Krane once explained to me.
Customer Retention: Grow Your Business by Tracking Data And Encouraging Loyalty - Amy Poinsett (MJ Freeway And Software Solutions)
Customer retention is extremely important for a dispensary to survive, and it will no doubt be even more important to non-medical marijuana outlets, as customers can bounce around more freely. I have heard so many horror stories about people going to dispensaries to get their much needed medicine, just to get subpar meds and/or get treated like a number instead of a customer. Amy Poinsett recommended using 'customer' instead of 'patient', and that dispensary staff should say hello and goodbye to customers in order to build relationships with the customer base. She also recommended something that I think everyone can agree with - customers like it when they get free gifts, and that gesture can go a long, long way!
California: How to Survive Amid Uncertainty - Amanda Reiman (Drug Policy Alliance), and James Slatic (MedWest)
If there was one thing that I took from this particular panel it is the different scenarios the Bay Area is experiencing compared to Southern California in regards to the ongoing battles with the feds. Amanda Reiman pointed out that the Bay Area proactively worked with the cities (S.F., Oakland, Berkley) to help set policies in place. Well run dispensaries in Southern California did not, and 'chaos ensued,' as Amanda stated. Reiman to dispensary owners: "It's your responsibility to educate the community, not the patients or media's responsibility" Amanda told the crowd.
Top 8 Mistakes Dispensaries Make and How to Avoid Them - Len Goodman (New MexiCann Natural Medicine), Kayvan Khalatbari (Denver Relief), and Betty Aldworth (Evolution Consulting)
In this panel Betty Aldworth talked about the need to 'reframe perceptions about users from negative to normal.' The number one mistake that dispensaries make - sexist advertising. When Betty Aldworth said "cannabis ads should respect women instead of objectifying them" the crowd cheered for a reason. No other area of wellness and medicine does that to women, and there is simply no place for it.
Capitalizing in Colorado: An Overview of New Opportunities - Robert J. Corry Jr. (Corry & Associates) and Christian Sederberg (Vicente Sederberg, LLC)
I found it fitting that this panel was one of the last to end the day. It was kind of a 'main event' of sorts. In case you didn't hear - NEWS FLASH: COLORADO LEGALIZES MARIJUANA, THE LARGEST GREEN RUSH OF ALL TIME HAS BEGUN. This panel was extremely popular for obvious reasons. If you sell grow equipment, fertilizer, paraphernalia, want to open a cannabis club, some other area of cannatourism, you own a media company, clothing company, or some other company that relates to marijuana, etc. etc. Colorado is obviously the place you need to seriously consider moving to. Or at the least, get your product or idea to. Anything to get your thumb in the pie because the pie is enormous, and growing everyday.
Something that Rob Corry pointed out is the need to develop mechanisms to stop cannabis from crossing state lines. Christian Sederberg pointed out that industrial hemp is the 'tiger in the room.' Both panelists agreed that if a person is a medical marijuana patient in Colorado, they can grow their medical marijuana plants in addition to their 'recreational' marijuana plants. That's 12 plants total, which sounds outstanding to this Oregonian...I thought we had it good, but the desire to move to Colorado is growing inside me by the hour...Amendment 64 re-opens the door in Colorado to wholesalers and retailers without the 70% grow rule. Last time there was no 70% rule people were bringing cannabis to the market as fast as they could, I can only imagine what will happen this time around!
Summary Of Johnny Green's Visit To The 2012 National Marijuana Business Conference
This is BY FAR the greatest event I have ever attended, and I have been lucky enough to attend some great marijuana events. I have had a few days to reflect on the event while I was preparing this article, and I can't help but think of the next conference already. I have never, ever heard or seen such a collection of marijuana minds from around the country. There were 42 speakers at the event, all of which bring more knowledge to the table than a person could ever imagine. I have been to events where there are 5 of these people at best. To be in the same building as all of them at one time, and to be able to pick their brains about what their experience has taught them, and see how their expertise in their specialized area has contributed to the industry is an honor to say the least.
I have been getting e-mails from people asking about how to get in on the 'green rush' and I think the best way is to follow the speakers from the event, and especially MMJ Business Daily, who made the event happen. Follow both their website and their Twitter feed. I would also follow their publisher Cassandra Farrington as well. They have the inside track on a constantly, rapidly evolving industry. Following them versus following someone else could be the difference between getting rich during the largest financial opportunity in our lifetime, or telling future generations in your family about how you missed out on the 'green rush.' I cannot wait until the next conference. I have dozens and dozens of article ideas that were inspired at this event, so look for those soon! Below is a video of mainstream media coverage of the event. Please don't mind the ad at the beginning :)