My National Institute for Cannabis Investors team and I are still out here in Las Vegas at MJBizCon.
If you matter in the cannabis business, you or at least one of your most trusted colleagues were here at some point this past week. Again, this is the largest cannabis conference in the world.
This event, put on by the folks behind Marijuana Business Daily, is more than twice as big as last year and eight times larger than four years ago. I’m looking over the exhibit floor now – there are more than 1,000 exhibitors set up across four acres worth of space.
That’s only expected to expand next year.
The optimism definitely got a boost from the most recent departure from the Trump Administration. There’s lots of back-slapping at the “resignation” of former Attorney General Jeff Sessions, the single biggest obstacle to legal cannabis in the United States.
Suffice it to say, the mood here is upbeat. Never before has this industry, one that has clearly matured over this last year, been more focused on opportunity without significant concern about a federal government crackdown.
In this new landscape, there are three key themes that stand out far beyond any other topics. That includes perhaps the most shocking emerging target demographic for cannabis to date.
Take a look at this…
Eat or Be Eaten
The upbeat mood here might be due in large part to so many participants getting rich. And I’m not talking about an increase in sales revenues or even success of their personal investments. I’m talking about people selling their companies.
Although panelists give whatever speech their PR departments and legal eagles crafted for them, the real talk offstage revolved around mergers and acquisitions. It was the top thing on virtually everyone’s mind.
The U.S. cannabis industry is quickly consolidating into multistate players. Companies without expansion strategy or plans to sell to a larger outfit have become major outlier here.
The second big theme coming out of Las Vegas is something I’ve been preaching for as long as I’ve been analyzing the cannabis industry…
Brands Will Rule the Day
Everyone has got the message – finally – about the importance of branding. When we started to build the Institute, investors and even many executives were still focused on capacity or licenses.
Today, all anyone will talk about is the importance of building real, sustainable brands that consumers will trust at a fair price.
People like to know what to expect in quality and consistency. Having a strong brand name goes a long way to accomplishing that.
If that sounds like the same thing you might hear from an alcoholic beverage company or any other consumer packaged goods company, it should. Part of the industry’s “growing up” involved realizing that cannabis is not going to be sold differently from other products in the United States and worldwide just because it was illegal for so long.
Pot's New Target Consumer: The Soccer Mom
In prior years, companies liked to talk about medical patients, pointing out that the largest growth in new cannabis users was among the elderly seeking to alleviate various symptoms. That’s still a vital market, and a lot of companies are designing their brands around that consumer.
The real buzz right now, however, is about companies that sell THC- and CBD-based products to “the soccer mom.”
The soccer mom typifies the consumer who might have tried cannabis in college but never took it up as part of her lifestyle. This was in large part because illicit products were once too potent and, of course, inconsistent in quality.
Data show the soccer mom demographic is increasingly seeking low-to-medium strength THC products, along with those packing a larger dose of non-psychoactive CBD. It’s akin to having a glass of wine before bed, with dinner, or during happy hour.
It’s not about getting high, it’s about taking the edge off.
This market’s potential can’t be ignored. After all, Constellation Brands – which owns Robert Mondavi wines – didn’t spend $3.8 billion to get into the cannabis business in August just to sell things to twenty-something concert-goers.