Episode #015 - Starting Sales Conversations in the Cannabis Industry

Transcription of Episode

Chris Battis:                  On this episode of Intent Topics, we're going to talk about starting conversations in a cannabis industry.

Chris Battis:                  Logan, how you doing today?

Logan Kelly:                  Good. How are you man?

Chris Battis:                  I'm doing awesome. I'm really excited about this topic. I feel like we talked about it a lot, and so I want to put it on a podcast and share with the world because we're constantly talking about it. I like the idea playing it down.

Logan Kelly:                  Cool. Yeah, let's do it.

Chris Battis:                  Cool. So a little backstory here. So at Union we have a large client that was in the cannabis space, still is in the cannabis space, and it's a tech company. I guess in my perspective, I knew there was going to be unique challenges due to the cannabis industry. For example, Google won't let you buy advertising, and Facebook as well, and there's content that you can't display, and there's challenges around emailing folks directly, there's age challenges, there's state-by-state laws, right? So working around that, we still devised a full-scale marketing plan, and implemented it, and obviously I have the inbound background, so it's heavily weighted towards that. But you pretty much proved this, but we found that it was more about the outbound outreach, right?

Logan Kelly:                  Right.

Chris Battis:                  And calling people and less of the, if you build it they will come. There's an element of that. But boy, we've really found success by calling out and working outbound strategies, right?

Logan Kelly:                  Right, absolutely. I'm [crosstalk 00:02:03].

Chris Battis:                  Yeah. Can you talk to what you've been doing there, and how that's going, and what you're finding?

Logan Kelly:                  Yeah man. So one of the most difficult places, sort of starting to really build this outbound strategy in the cannabis space was there's ZoomInfos, DiscoverOrgs, all these different contact databases. There's not a lot of coverage for them, so short of organizing the space, and it's very fast moving, so it's constantly changing. The minute that I feel like I've got a pretty complete database for us here at Union, all of the sudden I'm talking about to somebody inside of Union, and it's like, "Did you see this brand?" I said, "No!" We're working 40 hours a week on it, and so [crosstalk 00:02:56].

Chris Battis:                  Yeah. Brands are popping up out of the ground. They're merging, consolidating, splitting, changing management, changing names, it's this in one state, that in another state. It's very hard to keep track of. That's a good point you make.

Logan Kelly:                  Yeah. And so then from there identifying things like decision makers and identifying the right entry vector into a company, super challenging. What was cruel, I think to like fast forward, is like once you do start the conversation, we'll talk about how, it was totally worth it, because everybody's excited to be in this space, and people are not... The people who are trying to start those conversations, trying to be in the space, are excited to be there. There's a sense of comradery that will disappear when the real big money comes in. It's talked about now, but it's not that big yet, but once there's super consolidation and commodification, all that kind of stuff, it won't be fun. So it's really an exciting time to be in the space, because the people there are the original people. Well, they're kind of like maybe the third wave of it. So yeah.

Chris Battis:                  Yeah, and it's interesting how much there's this spirit of everyone trying to help each other, and it's competition, but it's also competition against the regulations not changing so that everybody can continue to do what they're doing. It's like we're all in this together kind of thing, but I don't recall seeing that that much outside of this industry.

Logan Kelly:                  Well, if you think about it in like NBA speak, you know you got Michael Porter's Five Forces, and so there's a multitude of different factors that can erode at your profitability, can erode at your growth, and in a highly competitive marketplace, obviously the other members of the market, your direct competitors are the big eroders of profit, you know you're in price wars and all this stuff. I don't see that from a brand perspective right now. In the cannabis space the major factors are like, "Well, we've got to redo all of our packaging because this regulation just changed." And starting conversations and working in a sales role in that kind of thing, we didn't have a lot of competition. You know, there's some, but all of a sudden what we're fighting against is like wow. Internally that company just got thrown into chaos by no fault of their own, but California just passed this legislation that's in effect a [inaudible 00:06:17]. They don't have the same lobby.

Chris Battis:                  They have bigger fish to fry than any phone call that coming in, right?

Logan Kelly:                  Right.

Chris Battis:                  It's just survival mode.

Logan Kelly:                  Yeah, yeah. And so that's fun and frustrating, very frustrating at the same time, and so I think that that's something that for companies that are not currently in the cannabis space, or have been running a cannabis strategy for three, six, nine months, it's a lesson that I've learned that that's not long enough to tell if you're a good fit in the industry, if you're enjoying being there. It's a year, it's a two year kind of thing, and you got fight the battles with these brands.

Chris Battis:                  So when you are having conversations, what's the demeanor the people on the other end?

Logan Kelly:                  Look, I listened. If you like the cannabis space, I think it's easy to be in it, right? But if you're just in it to make money, people can see-

Chris Battis:                  Right through you, yeah.

Logan Kelly:                  Yeah. So like in the CBD space, which I think is very tangential. It's not that long ago that we had the farm bill passed. It was after we started our outreach. And for the listeners like that, that sort of made it federally legal, that hemp is a federally legal, or CBD-based hemp. Maybe you can go into that a little bit later but... So it kind of lifted a lot of the federal stigma around CBD that's derived from hemp correct?

Chris Battis:                  Yeah. And it allowed a lot of brands to become national brands, and a lot of them were sitting on the sidelines waiting for that.

Logan Kelly:                  Exactly, exactly. And so one of the stories that's told a lot in the CBD space is they had a family member who was ill. They were entrepreneurial. They started to realize that CBD was something that could help this family member with cancer or whatever, or some illness, and here's this person between the kind of [inaudible 00:08:32] is 25 to 40, like somebody who's old enough that they're probably in a position where this is making a big impact on their life, and so now they are building this brand. This happens all the time.

Chris Battis:                  You hear it everyday.

Logan Kelly:                  Everyday, right?

Chris Battis:                  Yeah.

Logan Kelly:                  And so you're taking this very, I mean it's the most pure, like obviously people want to make money by starting a business, right? But the Simon Sinek, it's become a clich√©, like start with why. Now we're really able to start that business. If you're trying to just sell them something, you're screwed, right? So that I like the cannabis industry, you like the cannabis industry, so it's been easy for us to have these conversations because whether we use it or not, it's an opportunity. It's probably wrong that it's federally illegal. There's so many different drug crisis's, all this kind of stuff that could probably be avoided, so yeah.

Chris Battis:                  Yeah, that's frustrating, but it's amazing how much true authenticity there is, and I think a lot of it is because so many people in the industry have that story of a family member or themselves in that the business is driven with a lot of love and compassion, probably even emotion, and we found that that leads to just as meaningful conversations when you're talking to these people, right? Like you can connect.

Logan Kelly:                  Right.

Chris Battis:                  I'm not selling you a server box or something, right? This is a lot more meaningful.

Logan Kelly:                  Yeah. And on the THC, just straight marijuana side, you've got people who probably grew up with it. The consumer that a lot of the brands that we talk to are targeting are not like 18 or 17 or 20-year-old stoners. This is not the college kid cannabis industry.

Chris Battis:                  College town [inaudible 00:10:42], yeah.

Logan Kelly:                  This is sophisticated professionals who want high quality, who want... So the other side is the passion is like, "All right. I want to know what I'm putting into my body. I want it to be classy." These are people who spend more than a lot of times $20 on a bottle of wine who understand the difference in what they're eating, what they're drinking, et cetera, so it's no different in the marijuana space. So that passion, even though it might not be health driven, is still there and it's very apparent that you want it to be cool pull out this beautifully packaged marijuana joint, and smoke it at a party with your friends that all make six figures a year, that kind of thing.

Chris Battis:                  I observed kind of two tracks of consumers. I'm sure there's more, but there's one of people that were already consuming, have been consuming, now it's just easier to purchase. But they still have the same questions when you go into the retailer. Like, "What's what? Which one's going to make me feel which way?" Yada, yada. Then I think there's another cohort of consumers who it's just like because it's being more acceptable, their personal stigmas changed a bit around it, and they're like, "Oh, okay. This isn't so bad. This isn't reefer madness," and all the propaganda, right? Like, "I can have a light dose product and maybe enjoy it on a recreational level." And that's just a new opportunity for them when before it was just kind of like wine or beer or something.

Logan Kelly:                  Yeah, yeah. And so when you come back to how do we message in the space, you can't fake it. But I would say that, say you're just a label printer, and say you see the opportunity and you want to support these brands, and you think that it's a good vertical to go into, but you're not passionate about marijuana, consuming it. Go to a conference, go to a... The enthusiasm is infectious, right? You don't have to go consume it if you don't want to, but be a supporter of the industry, and it will be profitable. I think that's the thing is you don't have to be taking this stuff in order to realize that there's recreational opportunities, there's medicinal opportunities, and if I support these people in their passion, it might not be mine, but that's where you get off.

Chris Battis:                  Yeah. Speaking of events, I attended the Hall of Flowers, which is an event in Santa Rosa, California, and I did not know what to expect walking in the door, and I was very surprised to see that it was an incredibly professional event, right? I was expecting a bit of a Grateful Dead lot, and it was completely not that. These are professional people that are very enthusiastic about what they were producing and selling, and the camaraderie was incredible, and everyone was kind of... I don't know. There was this "in this together" and a maturity around, or professionalism around it that I was surprised. People weren't consuming. There's no shenanigans, right? These are just people growing their businesses, and it's a brand new space, and it was local events, was all California people. So they all play in the same playground, and within a few minutes I felt way more comfortable with what I had walked into. I felt comfortable walking up to anyone and talking about their products, and learning about what they're doing, and where it's from, and the different methods of consumption, and it was very interesting, and I was thoroughly impressed with that little swath of the industry overall.

Logan Kelly:                  Yeah, yeah. It's really exciting. When we talk about how to start conversations and how to grow a business within the industry, this is where I don't think advertising is really what needs to be done. I think it is really start those conversations in an authentic way with outreach. Obviously networking has been very effective. But if you don't have a network, really going out and seeking out brands that are interesting, finding the contact information, reaching out to them, understand that you're reaching out cold, you might need to explain yourself, but at the end of the day, people want to talk about this stuff. So if you're authentic, you'll be able to stay in the conversation long enough that it really starts to make sense. So I think it can't be profit first, it needs to be relationships, it needs to be network, but there's enough money to go around in this industry that really sort of identifying what your strengths are and how you can support these people's passions as they grow their business, you're going to help them grow.

Chris Battis:                  Yeah, another piece of advice from that event, the Hall of Flowers, as it pertains to marketing and sales obviously, Gary Vee spoke and I was pleasantly surprised it wasn't like the same old Gary Vee talk. But one of the things he said is that podcasting is probably one of the most important things you can do in that industry due to a lot of the restrictions on advertising and stuff, and a podcast being one of the most organic ways to get your content out there.

Logan Kelly:                  Interesting.

Chris Battis:                  Yeah. That was inspiring, obviously here we are. But the other thing is, there's a lot of news. There's a lot of press. But comparatively there's not that much content out there. I mean this is such a new industry, so I thought that was a compelling point. So I would recommend that to any brand or business in the industry trying to figure out what to do with their marketing, I'd just hit record and start talking.

Logan Kelly:                  Yeah, definitely. Definitely. And yeah. Like we talked to the brands. There's a lot of companies that have great offerings that could help the brands grow, and I think talking about that, creating content, et cetera, in those spaces is going to be incredibly valuable, not just because of what they're doing, what your brand is doing, but because you don't know how that's going to sort of snowball. Six months later-

Chris Battis:                  What's going to become-

Logan Kelly:                  ... you've got a little network that you didn't even know about that respects what you're doing.

Chris Battis:                  Yeah, yeah. It's funny. I've met a couple people that have been advocating in this industry long before we got where we are today, you know, 15, 16, 17 years, and I mean look at the perseverance that some of these people stuck through because of what they believed in, and they're actually doing really, really well right now because of it, right? [inaudible 00:18:38] the, I don't know, the grind, the hustle that they stuck it out, and some people are really getting paid out on it, and that ties back to the authenticity piece. There's so many people flocking to the industry because they're seeing it, you know, and it's nice to see that some of these people that have stuck it out are finding success.

Logan Kelly:                  Yeah, that's awesome. That's awesome.

Chris Battis:                  Yeah. Cool, Logan. Well, let's wrap up this episode of Intent Topics. I'm Chris Battis.

Logan Kelly:                  And I'm Logan Kelly. Thanks everybody for listening. Please give us a five-star rating, and then follow on whatever podcast app you listen on, and we will see you next time. Thanks a lot!

Chris Battis:                  Take care.

 

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