Episode #019 - Guest Jonathan Monk of Smokin' Hot Solutions.
Transcription of Episode
Chris Battis: On this episode of Intent Topics we have special guest Jonathan Monk of Smokin' Hot Solutions. Jon will be speaking about his experiences consulting on strategy, marketing and design in the cannabis industry.
Logan Kelly: Hello everybody. Thank you for tuning into Intent Topics today. Today we are back in the cannabis space. We have Jonathan Monk from Smokin' Hot Solutions with us today. Jon, excited to have you on the show. Tell us what you are doing now and how you got there.
Jonathan Monk: Thanks for having me Logan, appreciate it guys. So Smokin' Hot Solutions was founded 10 years ago by my business partner. I came on about six years ago. At that time the cannabis industry was completely different than how it looks today. We operate out of Philadelphia, so we're on the east coast. There was no legal cannabis spaces here at the time and really out west it was still pretty medical. There wasn't an influx of capital, there wasn't a lot of, you know, ancillary businesses involved. So for us, we were in it in the beginning, and we're still in it now. So I think over 10 years what we've done and how we've changed has changed as well as the cannabis industry has. So while we started mostly as a digital marketing company doing... running social campaigns or SEO campaigns or web designer or things like that for clients in the cannabis industry, where now, we have a three pronged approach, we like to call it, with every project.
Jonathan Monk: So we lead through three pillar service areas, which are strategy, marketing and design. So marketing and advertising, they're a little bit different but we kind of grouped them together. So while we started with traditional digital campaigns, we're now doing... writing dispenser applications. We're doing state-by-state expansion for dispensaries, for growers. We launch a lot of products, we developed go to market strategies, general marketing plans and marketing strategies for consumer product brands or dispensaries or things like that.
Jonathan Monk: And then we now have a full design team as well. So we're, we're designing advertising campaigns, whether that's billboards, magazines, anything digital. We have a photography and videography team now. So we've just grown a lot from starting at my partner's dining room table to now having a team of 13 people here with various different skill sets and kind of a unique take on the industry. There's some other companies that are doing similar things to us, but there's a cannabis branding companies or cannabis PR companies, but we haven't really seen anyone, and I think this is what makes unique, is take our consulting first approach where we can come in and we can help with strategy, but we can also help with marketing and we can do all of your design and anything else we have kind of like you need partners for. So-
Logan Kelly: Yeah, I love that. I love that. One of the things that you said that was interesting is, and this is kind of how I've always seen marketing from my background, is how you present yourself to the world in your marketing and your advertising needs to map all the way back into the back room. So it sounds like you guys have taken that a step further and said, all right there's a legal component that's very important in the cannabis industry. Now are you mapping that sort of legal consulting component to like, this is now, how are we, with the expansion, how are we doing marketing, all that kind of stuff. So you're very holistic in that sense, Huh?
Jonathan Monk: Yeah, absolutely. Absolutely. I think you have to be with any approach, right? I think that's kind of the best way to do it and makes sense.
Logan Kelly: Very cool. Very cool. So what got you into the industry? Let's get the background out. So what got you into the industry, and what kind of excites you about it?
Jonathan Monk: So prior to being in the industry with smoking on solutions, I had a electronic music concerts company, so I was booking kind of large international touring DJs and putting on shows around the United States and in Canada. So I did that for about four years. And then I sold the business to my business partner, my part of the business. And then I got into the cannabis industry. So I met Claudia, who's my business partner now for Smoking Hot, and it was... the synergies were there and the industry excited me. It was so new, so fresh, and it still feels that way seven years later. It's still very much feels fresh and new and exciting. The landscape of everything is constantly changing. You can even look at the CBD industry in particular. So we-
Chris Battis: You must've seen a lot of companies in trying to do what you were already doing kind of arrive at a nowhere? A lot of that?
Jonathan Monk: Yeah, I mean, to be honest, a lot of companies will come to us after working with other people who say they have a marketing firm within the industry, but it just doesn't work out. So we get a lot of that. We got people just being like, hey, we've done it before but you know, it didn't work for their company. Why are you guys different? And then you know [crosstalk 00:05:28] why we're different and we show them and stuff.
Chris Battis: It's probably become more competitive, but it's also allowed you to show your stripes, right? And-
Jonathan Monk: Yeah. And something I like to tell a lot of these, because there's a lot of CBD companies now popping up, both from white labeling is pretty popular. Everyone wants to have a tincture company or an oil... or I mean there's just so many of them that approach us on a daily and a weekly basis that we have to really nail down to them that you have to differentiate yourself in the CBD market because everyone's trying to do the same thing. And we can tell you because we see it. People are coming to asking for branding for a CBD company, but what's going to be different? Full, organic isn't a differentiator now, everyone's doing it. So your product offering has to be really different. And I think that that's been interesting and fun for us because we've had the ability to work with some really cool, really creative, fun CBD companies who have unique product offerings, and we're helping them stand out for that reason.
Chris Battis: Oh, that's cool. Yeah, we actually have a client in the pet space, their branding agency, and a lot of the messaging for them is around brand parody in the pet industry. So you kind of see that in CBD, right? There is definitely this look and feel that you see, it's like, oh, another CBD brand that looks the same. You see a lot of that.
Jonathan Monk: Exactly. Yeah. There's a kind of a side project that I'm working on, I'm opening. We're starting with Philadelphia obviously because we're here, but we're going to be opening a CBD store, CBD retail store in the city. And then we're going to scale the model. So I'm doing it with a couple of our dispensary clients who are now part of mind in this kind of CBD initiative. But kind of the unique take that we've done just kind of running a creative agency, and what I've learned is that we're heavily curating the product offerings that we have, right? Because the branding is so important. I don't think there's any real brand loyalty within the CBD or cannabis market yet. I mean there's some of it, but really people are going to walk into the CBD store and they're going to buy the product that to them looks the best, and also is at a fair competitive price. So I think the products, having a heavily curated store is going to help sell those brands. And that's what we tell the companies we work with. It's just branding is really important.
Chris Battis: So that's funny, I was just about to ask you, if you were given an investment, what would you build for a company in this space? And that answers that. Cool. Yeah. Sweet. So talk to us about this concept of how busy everyone is in this space and regulations changing, and everyone's... between growth and regulation change and just the rush, what's your experience of kind of observing this and how are you managing that with your clients?
Jonathan Monk: Yeah, so that's something that we experienced firsthand and there's kind of two topics I'll touch on about this, and they both have to kind of relate to a dispensary. So one being working with various different Department of Health's in different states. So the regulations or what they enforce or what they don't enforce, constantly changes. So when you're filling out a dispensary application, like right now we're doing dispenser applications for New Jersey and Missouri cause they're coming online. So once the dispensary applications released, you have one month to fill it out and send it back, right? That's not a lot of time for 100 to 150 pages. So you constant scramble of everyone, especially our clients, they're trying to run their current dispensaries, but now they have a month to get these other applications in, and it's madness. So everyone's running trying to get these done in time, and then in the midst of all that you have the Department of Health in the states where you're already open, and their regulations are constantly changing.
Jonathan Monk: So, for instance, when we launched a couple of dispensaries in Pennsylvania, the regulations set by the Department of Health were you couldn't do this, you couldn't do this, you could do this, whatever. And now all those things completely changed a year later. We're now doing billboard advertisements, we're now doing more promotions. And for instance, this is another thing interesting too, so last week, or sorry, last month, Pennsylvania Department of Health said you no longer can bring anyone into the dispensary with you. So they wasn't always like that for the first year, the first two years that dispensaries are in operations. So everything's constantly changing. There's so many different pieces involved.
Jonathan Monk: And you know what I mean? It's exciting, but it's also a bit stressful. And I think that's why everyone's running around not really.
Chris Battis: And as a business do you assume any liability around this regulation kind of consulting?
Jonathan Monk: I think we have our proper insurances and things like that, but we do our due diligence. We've been doing it for more time, so... Sorry, go ahead.
Chris Battis: So you just know the regulations down pat as they-
Jonathan Monk: Yeah.
Chris Battis: It all makes sense to you when you read it and... Yeah, okay.
Jonathan Monk: Yeah. We work with a lot of different partner law firms when we're doing the dispenser applications and anytime we're doing any advertising or marketing, we always submit to Department of Health for approval. So this is a lot of steps involved, but that's... by working with us, we know all that kind of stuff, so we try to avoid any fines or any wrist slapping or anything like that. We're usually very careful of what we do. And so I don't think we... we don't wanna assume too much liability on that end, but we're covered just like any other companies.
Chris Battis: Cool.
Logan Kelly: So let's go to the changing liability and the changing legalities here. How have you seen that impacting your client's business? For instance, I think anybody in the industry knows California over the last 12 months has just decimated some brands products. They just had to pull it off the shelf. So what are some things that you have seen and what are some things that, or ideas you have about how to mitigate the sort of disruption that can happen with these legal changes?
Jonathan Monk: Yeah, I think it's important to kind of always mitigate your risk by having different plans in place, or having different actions that or things that you can do to kind of counter any revenue loss or any projected revenue loss from a change in a regulation or something like that. It's easy to kind of look at it in hindsight and say, oh we should've done this or we should've done that. But sometimes there is no real way to avoid it, especially in States like California. But then other times the changes, they're not anything drastic, and if you have a smaller dispensary or smaller dispensary chain that can be more nimble, which enables us to be more nimble and we've just kind of cater our updated marketing strategy around that.
Jonathan Monk: So I think we touched on this a little bit before, but for us kind of when we approach every project is since the industry is changing so much, the marketing plan and the approach and the strategy should be changing just as often. So we like to kind of update that and look at that on a quarterly basis based on any new legalities or legislation or whatever it may be. So if we're starting with the dispensary and we have x marketing strategy, and then all of a sudden edibles become legal and now they can sell edibles, that drastically changes how we're going to market the brands, what products are going to carry, how many skews we're going to have of this, what the pricing is. So it's constantly changing. It's not just hey you open up and then you can do all these different things.
Jonathan Monk: I think also another thing too in California is the limit put on certain sublingual and various different edibles with up to 10 milligrams and things like that. So when you have limits like that and you kind of take out a whole clientele. So a clientele that's looking for a larger milligram dosage is no longer going to be able to buy your product. So I think that has really hurt brands as well.
Chris Battis: Oh, interesting.
Logan Kelly: Interesting. So talk to us about when we look at cannabis brands or CBD brands, now I know you probably have a playbook you don't want to give away the farm, but what are some of the things that you've seen as elements of a successful cannabis or CBD brand?
Jonathan Monk: Yeah, so I think the important thing is, and what we try to stay away from is it just looking like everyone else, right? So, a good name is really important, a great name is very important colorways and the way you present it are also very important. I think taking the required time to develop a brand or a branding guide or logo or that whole process. I mean, that can take several months to do it the right way. Anytime a company tries to rush it's usually not that great.
Jonathan Monk: Another thing too, kind of when marketing that brand or marketing these specific products online is that there's a lot of limitations. So with like social media advertising and Google AdWords in particular. So those are both really great tools, but you unfortunately can't really use them for any companies in our industry. There's a couple work arounds, but generally speaking, 95% of the brands are not going to be able to advertise through those mediums.
Jonathan Monk: So, and this is what I kind of tell everyone, prospective clients, and our team here is that this forces us and enables us to be more creative. So we have to be extremely creative with our approach because there's only certain places where you can spend money on advertising, right? So we can do it on industry outlets. You can do some billboards, but you can't do radio and TV. So I think having to be really creative to kind of drive that inbound and drive people's engagement with your products through social media or through any of the various different channels. But that's all built around a strong brand. So having that strong brand and then working to gain people's attention is pretty difficult, but there's certain ways that you can do it and be very successful with it at the same time.
Logan Kelly: That's interesting. So the cannabis industry is creating like a renaissance for the billboard industry.
Jonathan Monk: Yeah, I love it. We love it. It's a big thing that we do. And I think, and this is kind of what I tell everyone too, is in a new market, so say a state just legalizes marijuana. So all of a sudden you go to have these influx influxes of billboards, or certain companies will do at the start and the more will follow. But imagine being a driver, you're driving up the highway and you see that, you see marijuana for the first time ever in your life on a billboard. Everyone's going to do that, and everyone's going to remember it. California doesn't have that same impact anymore, but-
Logan Kelly: Weedmaps did that in Boston hardcore. Yeah.
Jonathan Monk: Yeah, yeah. Weedmaps has a big campaign right now they're doing with [Clear Channel 00:00:16:47] and a couple other couple others, billboard companies. But especially in new markets, it's just that word marijuana or cannabis that people see for the first time. It's incredible. Everyone will talk about it. Everyone will send it to each other. So it's-
Chris Battis: I saw a clever ad campaign by [Eeze 00:17:02]. Have you heard of that company, Eeze? It's basically like Uber. Yeah, so they were showing just kind of regular people, there was like a nurse with a CBD pen or something. I thought that was a really clever... But to see that on a billboard it was just like, wow, it's just a regular person consuming. This is a whole new world.
Jonathan Monk: Yeah. I really liked that campaign a lot. There was a couple of different ads they ran as part of that campaign. So one of them was like, it's 4:20 somewhere. Another one was like a pizza delivered but marijuana or something like that. It was just really creative, really cool, really impactful. And they accomplished that through just, I don't know if you guys have seen the billboards, but a solid color billboard with some text over it. And that's really impactful, and I firmly believe in the fact of how that worked and I'm sure saw pretty good return on that.
Chris Battis: Yeah. And they also had like vehicles with the traveling billboards. I saw those-
Logan Kelly: Oh, like the taxi's?
Chris Battis: Yeah, it was like a truck. Yeah. Yeah. I love their advertising campaigns there.
Logan Kelly: So what do you-
Jonathan Monk: Oh, sorry, go ahead.
Logan Kelly: What do you see in social... I've done quite a bit of social advertising, not in the cannabis space, but you kind of have a predictable ROI net of everything in a campaign if you do it right. So what are the kind of returns on investment? What are the economics on a billboard?
Jonathan Monk: Yeah, so I think anytime that we've ever done kind of a billboard campaign, if say a client has $50,000 a month advertising budget, right? So the billboard comes in at 10 grand or five grand, whatever it may be, there's so many different things that we're doing within that month. So with any print, it's always going to be harder to see the ROI than it is on digital. So you only have the statistics that the advertising companies giving you, like a million people pass this a day, right? So out of those million people then you start to factor in, okay, if it's a medical market and 50,000 people in the state have it, then you're going to have a thousand people a month that are going to pass it in the medical market, or whatever that may be. So you've kind of measure it in those terms.
Jonathan Monk: And then if we're doing print and we're doing that and we're doing digital, and we're doing everything at the same time, but then we see like an influx in sales increased, then we know that it's working. If not, we'll change things up. Also, a lot of times, especially with our really highly engaged brands, people will let us know when they see stuff from us and be like, oh, I saw your billboard, or Oh, I saw your ad in this magazine, or Oh, I saw your story here. And that feedback is really important to us as well. So any of our brands that, where the community feels really highly engaged, we get a lot of feedback from them on our advertising if it's working the way that we want it to.
Chris Battis: Very cool.
Logan Kelly: Interesting. Yeah, that's crazy. I never thought of billboards as being a viable, because I'm a millennial, right? So everybody targets me through the internet.
Jonathan Monk: Yeah, right.
Logan Kelly: So, cool. So what kind of opportunities do you see in the next 12 months in the cannabis space? What excites you when you come into work or when you're driving home?
Jonathan Monk: Yeah, so for us, these past I'll say two years, have been the best two years from us. We've seen more growth over the last two years than we did in our first eight years in business. So that's just a testament to, I mean, how far we've come and how we've grown as an agency and what our offering is, but also a testament to the growth of the industry. I mean there's so many companies and opportunity and really it all stems from the influx of capital. So you just have people, business people that were involved in various different industries are now coming in and looking for investments. So coming with that investment are new brands, but also coming along with that is consolidation.
Jonathan Monk: So specifically when you look at marijuana cultivators or growers or dispensary chains, I mean, I'm not sure if you guys pay attention to kind of these financial deals that have been going, but they're now in the hundreds of millions if not billions of dollars, some of them. It's nuts. So where else, in what other industry can you see that? I mean there's just so many brands and opportunity and money to be made and successful companies to be had. I mean it's extremely exciting. The last time it happened was like the.com boom. It was probably going last [inaudible 00:21:35].
Chris Battis: Yeah. it's also, to me it's a really unique moment in time. We're literally watching prohibition end right in front of us. And so it's like the.com plus prohibition.
Jonathan Monk: Right. Yeah. And kind of to go off that, people, especially the younger generation, they're going to come up not ever having known that marijuana it was illegal at some point.
Chris Battis: I know. It's like my-
Jonathan Monk: It's going to be [inaudible 00:22:00].
Chris Battis: My three year old saw a phone booth like a couple of weeks ago and was like, "Dad, what's that?" I was like, oh my god, that's hilarious. Yeah.
Jonathan Monk: Right. That or when kids will be like, oh you didn't have cell phones. Like I didn't have a cell phone until I was like 16 probably. Stuff like that.
Chris Battis: I was in college.
Logan Kelly: I showed somebody a dial tone. I think she was like 14, and a dial tone, didn't know what it was.
Chris Battis: Oh, no way.
Logan Kelly: Yeah, my little niece or something was like, "What is that?"
Jonathan Monk: [inaudible 00:22:36] school, and that's another reason too. It's like the landlines are gone. It's just everything has changed so much.
Chris Battis: Yeah.
Logan Kelly: Right, right.
Chris Battis: So Jon, what keeps you up at night in the cannabis space? What scares you?
Jonathan Monk: So I think some of these companies they're trying to grow too quick or they're trying to become something that maybe they're not. I think the evaluations kind of from a stock market end, some of these companies are extremely high. So I'm always kind of constantly a bit worried about a bubble or what that might look like. Does that look like a lot of companies going out of business, people don't need this or people don't need that? I think for any kind of bubble market, if the bubble pops and the revenues are down or whatever, consulting companies are usually, usually I'll say, the first ones to go. So for us that wouldn't be good. It's not going in that trajectory, but it could. Eventually, the market won't be growing as quickly as it is. But I think we've done a good job to kind of cement ourselves with some really, really concrete relationships with big players and starting companies. And so we're trying to... we mitigate our risks from our business ends as best as we can.
Chris Battis: Sure. Yeah. Well, so that leads into, so what do you think the next 12 months look like for you guys, and yourself really?
Jonathan Monk: Yeah. So I'll give you a little teaser about kind of what we're doing internally.
Chris Battis: All right.
Jonathan Monk: So we've spent a lot of time over the past six months developing an advertising, marketing and rebranding campaign for ourselves. So we are actually changing our name as a company. So the reason that we did this is we felt that Smokin' Hot Solutions was proper naming and proper description of kind of our company and what we were when we started. But just like with any business or any industry, it's good to sometimes look back and say, what can we do better? How can we change? And I think going through a rebrand, which hopefully will launch kind of first week of September, we're kind of in the late stages here, but it's really important for us because our offerings have changed, and the way we sell ourselves has changed, and the way we're partners with a lot of these companies.
Jonathan Monk: It's just we have changed so much, right? We have this strategy first approach and then we have our advertising, marketing and design departments. So we offer so much more volume that too. We have some banking solutions that we offer. We do some interior design stuff. There's a lot of different things. So we're rebranding ourselves as kind of a consulting group more than just a marketing company. We're not just a marketing company, we're not just a branding company. So over the next 12 months we're going to be launching our new brands hopefully next month, looks like. And then kind of the marketing and advertising campaign that we're going to run a huge campaign both from paid advertising and digital marketing.
Chris Battis: Oh, cool.
Jonathan Monk: That's kind of what the next year is going to look like for us. Just really, really blowing up our new brands and reaching as many people as we can. We're trying to get involved in every state that's legal both with the plant and the dispensary end. And then we're trying to expand our reach in Canada. So right now we have clients in Vancouver, Montreal and Toronto, and we're trying to expand more there as well. So with this rebrand for us and this advertising campaign, hopefully we can attract that next level of big bill companies, those companies that are doing 10 to $50 million a year, it'd be great to work with a lot more of those.
Chris Battis: Yeah, wow. Sounds like a big project. Cool.
Jonathan Monk: Yeah, it's been quite the undertaking.
Chris Battis: I bet.
Logan Kelly: You heard it here first.
Chris Battis: Yeah, I can't wait to see it.
Jonathan Monk: Exactly. Yeah, you guys are the first to hear. We've kept it hush hush, so now we're in the final stages, so I'd figure it'd be a good time.
Logan Kelly: Nice.
Chris Battis: Nice.
Logan Kelly: No, that's awesome.
Chris Battis: Well, since you're releasing sensitive information, any other parting words before we wrap up?
Jonathan Monk: Yeah, I think for anyone who's listening and wants to get kind of into the cannabis industry to take the jump, that's what I tell everyone. It's so exciting. It's so fun. It's interesting. It's different than anything that I've ever experienced with any other industry or any business, and it's just really cool. So I think more people should get involved. It's awesome.
Chris Battis: Yeah, it's an exciting time. It's a once in a lifetime, really.
Logan Kelly: Once in a second century. Yeah.
Chris Battis: Yeah, really.
Jonathan Monk: Yeah, It was like the '20s when prohibition came by, or how trade with South America, they started setting up I think it was rum and a bunch of other. It's the same thing, right? Alcohol sales boomed, now marijuana sales are booming.
Logan Kelly: Right, yeah. That's awesome.
Chris Battis: Good stuff. All right, cool. Well, this wraps up this episode of Intent Topics. I'm Chris Battis.
Logan Kelly: And I'm Logan Kelly. Thank you so much for stopping by. Please give us a follow and a subscribe as well as a five star rating on Apple Podcasts if you'd be so kind. We will see you next time.
Chris Battis: Take care.