Nice Thoughts Mitchell. The question, from someone in the trenches of this, is: are luxury cannabis brands willing to accept the minuscule segment of the market that is truly upmarket? And perhaps more importantly, are their investors game for a 7-10 year timeline in terms of any expected return, let alone the 20 or 30x? Another question, how long did those esteemed French Chateau take to mature their vines, and brands? What about Louis Vuitton or Chanel?
My experience tells me this segment is, AT MOST, 10% of the marketplace, in every state in the US at least. I cannot speak to Canada.
The financing realities facing cannabis today are to get to cash flow positivity as fast as possible, as most investor appetite for "brand building" is non-existent.
Here's a though experiment, if I were to start a super high end cannabis brand, and told you, my investor, that I was only going to sell my products to 5 dispensaries in NYC, LA, SF, Chicago, Miami, Aspen, Dallas, et al, so as to target only the most desirable and high income customers, and the goal was to lose money for many years but that one day we'd have incredible brand equity that would suddenly catapult us to the top--at the time of Federal Legalization for instance, or the abolishment of the DEA, or some other black swan, highly difficult to predict event....
Thanks Zachary for your note and feedback. To answer your questions 1) premium cannabis is not a small segment (I agree with your 10% unit/revenue number), but that number goes way higher it comes to margin and growth 2) I used CMR as an example of how cannabis firms can differentiate, not as the roadmap. There are countless ways in addition to art collabs. 3) According to Baroness Rothschild, it took CMR 200 years to figure out how to produce super premium vino but she didn't have tech, genetics etc. 4) there is lots of capital tied up in existing and underperforming assets (SKUs, inventory, facilities) at many cannabis firms. They need to unlock this and 4) I might invest, depends on the business case, the product including underlying research and their ability to produce. Like wine and almost every other CPG, the cannabis market will segment into different needs states and price points. They key question, which you alluded to, is when? Had first movers in Colorado or Cali did this work at the time of legalization, they would be featuring LV or Chanel type of weed brands.
Med Men? The Apple of weed?!? LOL. A 5th Avenue store that didn't sell weed to a LV store that looked and felt worse than a Dunkin Donuts. That was an attempt to go after premium but with really bad strategy, execution and no product. I consider them a mulligan, along with many other hacks. It takes years, consistency, attention to detail and obsessive quality to build a premium brand. That was never AB and his cronies.
I created one of the original premium cannabis lifestyle brands - Van der Pop, and I still believe there’s a market for it. The issue is the lack of understanding about brand among decision makers. Canopy Growth owns the Van der Pop IP. This year at MJBiz I was told by a current executive at the LP that it “didn’t know what to do with the brand.” I continue to build industry defining brands and am one of the most respected voices in consumer education across emerging, regulated markets, including hemp and, specifically, with women. There are no shortage of ways to capitalize on the personal brand affinity and authority I’ve cultivated in the US and Canada since 2015 with this influential consumer group. Just. ask. me.
Nice Thoughts Mitchell. The question, from someone in the trenches of this, is: are luxury cannabis brands willing to accept the minuscule segment of the market that is truly upmarket? And perhaps more importantly, are their investors game for a 7-10 year timeline in terms of any expected return, let alone the 20 or 30x? Another question, how long did those esteemed French Chateau take to mature their vines, and brands? What about Louis Vuitton or Chanel?
My experience tells me this segment is, AT MOST, 10% of the marketplace, in every state in the US at least. I cannot speak to Canada.
The financing realities facing cannabis today are to get to cash flow positivity as fast as possible, as most investor appetite for "brand building" is non-existent.
Here's a though experiment, if I were to start a super high end cannabis brand, and told you, my investor, that I was only going to sell my products to 5 dispensaries in NYC, LA, SF, Chicago, Miami, Aspen, Dallas, et al, so as to target only the most desirable and high income customers, and the goal was to lose money for many years but that one day we'd have incredible brand equity that would suddenly catapult us to the top--at the time of Federal Legalization for instance, or the abolishment of the DEA, or some other black swan, highly difficult to predict event....
would you invest in me?
Thanks Zachary for your note and feedback. To answer your questions 1) premium cannabis is not a small segment (I agree with your 10% unit/revenue number), but that number goes way higher it comes to margin and growth 2) I used CMR as an example of how cannabis firms can differentiate, not as the roadmap. There are countless ways in addition to art collabs. 3) According to Baroness Rothschild, it took CMR 200 years to figure out how to produce super premium vino but she didn't have tech, genetics etc. 4) there is lots of capital tied up in existing and underperforming assets (SKUs, inventory, facilities) at many cannabis firms. They need to unlock this and 4) I might invest, depends on the business case, the product including underlying research and their ability to produce. Like wine and almost every other CPG, the cannabis market will segment into different needs states and price points. They key question, which you alluded to, is when? Had first movers in Colorado or Cali did this work at the time of legalization, they would be featuring LV or Chanel type of weed brands.
ur describing med men basically. and they failed spectacularly.
the fact that we cannot point to any of these existing today is not that they weren’t tried. it’s they they failed.
Med Men? The Apple of weed?!? LOL. A 5th Avenue store that didn't sell weed to a LV store that looked and felt worse than a Dunkin Donuts. That was an attempt to go after premium but with really bad strategy, execution and no product. I consider them a mulligan, along with many other hacks. It takes years, consistency, attention to detail and obsessive quality to build a premium brand. That was never AB and his cronies.
I created one of the original premium cannabis lifestyle brands - Van der Pop, and I still believe there’s a market for it. The issue is the lack of understanding about brand among decision makers. Canopy Growth owns the Van der Pop IP. This year at MJBiz I was told by a current executive at the LP that it “didn’t know what to do with the brand.” I continue to build industry defining brands and am one of the most respected voices in consumer education across emerging, regulated markets, including hemp and, specifically, with women. There are no shortage of ways to capitalize on the personal brand affinity and authority I’ve cultivated in the US and Canada since 2015 with this influential consumer group. Just. ask. me.