The Growing Industry of Cannabis & CBD
It's a truly fascinating time for the cannabis and CBD market, which seems to expand and change faster than you can keep up with it. As the legality of such products varies across the world, it poses a lot of challenges for marketing them.
Recently, our CEO Stacy Jones sat down with Mike Pachan, who is the CEO of Mountain Made, a CBD and lifestyle brand in Colorado, as well as the founder of M Pachan Ltd. In this blog, Hollywood Branded explores how to market in the hemp and cannabis industry from the expertise of Mountain Made's Mike Pachan.
A Little More About Mike
Mike Pachan is the CEO of Mountain Made, a CBD and lifestyle brand out of Colorado and well as the founder of M Pachan Limited, a cannabis wholesale firm with over 65 million in product sales. For the last decade, Mike has been working in the cannabis and hemp space ranging from dispensaries to distribution centers to hemp product lines to creating for patient programs to help Colorado residents better understand cannabis therapy. Mike has led three successful startups and brought 12 products to market in both the hemp and cannabis spaces. You can check out CBD products like Boost, Recover and Build at Mountain Made's site, mountainmade.life.
Interview Transcript Highlights
Question: So you're in an industry that used to be very illegal and it's slowly become something, depending on your state, that is warmly embraced and other states that still don't, but in Colorado you're in a good place. Everyone loves you. Can you share with us what got you to where you're here today where not only do you have brand lines, but you have a wholesale company and you've had massive success over the years.
Answer: Thank you so much, let's jump right into it and it's important to note because there's probably so many up and coming entrepreneurs out there and folks looking to maybe branch out and do something of their own. I would agree with you, I've had some pretty good years. It's important to note too I've had some pretty rough years as well. So in the realm of entrepreneurship, those bad years or those rough years has really gotten me to this point and that's so important to note, especially in today's realm with so much social media and how we can glaze over someone's story and just get to that success, but if we reach way, way back, something I've always looked to do.
When I was young growing up, a grandfather of mine had his own construction company, sold that to my uncle. It was always interesting to me to know that Uncle Vic made his own way and his own money and I always thought that was so cool. I entered the workforce when I was 15 years old and used to ride my bike down to a local greenhouse and it was owner operated as well and just saw how much passion he had for his own business. Since I've entered the workforce at 15 I've always made it a point to focus on working for small businesses. So when I literally tripped and fell into the cannabis space, not only did I see opportunity for small business, but the small industry.
I've always been a little bit of a wild man, and back in my twenties I was a bit more wild than I am now in my late thirties, so it was a great fit. That fit for adventure, being wild, crazy, loving the small business and opportunity to really make it on your own all came together and melded into who I am today.
Question: It's still an industry that's maturing. Obviously with the fact that it's not legal everywhere, there's regulations in many places. That causes a lot of difficulties in trying to figure out how to make a brand and market it, right?
Answer: Absolutely, and it's heavily regulated and we can be thankful for that on one hand because it's kept the Feds out. 2010 through 2013, there was less than 3000 of us employed in the legal medical cannabis space in Colorado. That's not a whole lot of people to keep track of, to round up, to punish, to locate. So it was definitely risky because we were signing paperwork to get our licenses and our badges that went directly to the IRS and FBI. It was tough even just renting an apartment back then because they would Google and look at your social media profiles. We were getting our bank accounts shut down. So it was much, much different, but now it's really came around and it's blossoming into its own, but especially when you look at cannabis versus hemp.
Cannabis still is slow motion as far as federalizing and state to state people bringing it in, I love that. Because that allows bigger gaps that need filled and a longer time to get in and find a program to fill those gaps. There's a ton of opportunity left in cannabis and I'm hoping that maybe one person who's listening to this gets some ideas stewing around because there's plenty of opportunity. There's states that are medical and say they won't go rec. We can talk about that for a little while because it's a joke, there's no difference. But the opportunities are endless and you actually have more time to execute properly than a lot of folks allow themselves. Same with CBD and hemp, although it's flooded right now. A lot of people are doing it wrong because they rushed to market rather than really sat back and took the time to learn the industry that they were entering.
Question: We talk to so many different brands who are interested in leveraging pop culture with "How can we use music video artists? How can we use TV shows? Talk shows?" And it's still an area that even though it's legal, it's hard to advertise in because the message hasn't actually gotten out there yet that it truly is legal. So you have a lot of your traditional advertising opportunities that won't allow it to happen still quite yet.
Answer: It's gray area legal. The Farm Bill passed, which really reduced the risk to ship CBD nationwide. People came to a handshake agreement as long as there was less than 0.3% active. CBD product, we'll consider it legal but technically CBD is still not classified. So the FDA hasn't stepped in and said, "Is it a drug? Is it a dietary supplement? Is it both?" So until that verbiage gets put down in legislation, the banks don't get involved. If the banks aren't involved, large advertising firms won't touch it. So it's gray area legal. It's still maturing, same with cannabis. We're protected by the constitution of Colorado, but that does nothing for us on a federal level. So bank accounts, loans, marketing, social media are still hands off to a lot of people, but for hungry entrepreneurs that's where the risk brings reward and that's why SCO companies that are stepping up and helping CBD and cannabis companies are doing really well.
Packaging companies that have tailored lines towards child resistant containers for the cannabis space have been doing really well. So there's people that are willing to get in in those ancillary senses and take a risk as well because technically they can get flagged too for even being ancillary help in the cannabis hemp space, but that risk is definitely bringing them a significant amount of reward.
Question: So having been in this for the last decade, what are some of the ways you've been nimble about marketing? How have you gone about really a grass roots approach to growing your brand and the other brands you've worked with? What insights could you give to our listeners who are really interested in understanding what, not the limitations are in this space but what the opportunities are within the space?
Answer: In cannabis especially, a lot of it is grass roots word on the street. Colorado's a big state, but it's a small fish bowl. If you have a good product and a good brand, the buzz and the word gets around pretty quickly. So I've always helped brands set up, first of all a great product. Gotten in helping them make tweaks to their products, created a strong brand message about it and then implemented strong sales and brand ambassador programs. In Colorado, they allow us to do what's called pop ups. So if we're a brand and Stacy you and I start a pre-roll company, Mike and Stacy's Pre-Rolled Joints, we're allowed to go onsite at a dispensary and run promotion and have someone from our team there promoting that product to the customers who come in to that dispensary.
Now you and I as marketers will say, "Well that's a no brainer." You'd be surprised about how many brands do a really poor job at the pop ups. Their ambassadors will sit like this with their heads down, they don't speak to anyone, they don't engage. I've gone in and built teams to where you and I as a pre-roll company, we send them out in outfits. They go out dressed like a blunt, dressed like a joint. They high five, they hand out stickers, they talk the brand message, they include the buzz words that make us different and I sent a pre-roll from 700 units a month to 65000 a month in seven and a half months just by really being active in the field in front of the customers because we all have access to Facebook.
We can't go on the Facebook and say, "Every tourist from Texas that goes to Colorado yearly," market them all through June. We don't have that. So we have to be boots on the ground in the dispensary, at the strategic locations, in front of the in state people plus the out of state people and in front of the butt tenders which is the retail teams to promote the product and the brand and if you do that successfully and you get a really high octane, high energy team behind you, it's pretty incredible to watch the rapid growth. Just from that boots on the ground, that's stuff we've all grown up and seen in the grocery stores. We're not reinventing the wheel, we're just doing it better.
Question: So what beyond doing in store event sampling opportunities and those one and ones, what are other options? What are other ways that you're getting brands marketed today?
Answer: Instagram and Facebook, while they allow you some limited access can be really helpful, co-marketing with dispensaries because a brand a lot of time doesn't have as much pull as the dispensaries. So when you drop off product, announcing product drops and just moving that network around and leveraging the power of everyone's social media, the industry has been super helpful. Connecting with the butt tenders, which is like a bartender except you're selling cannabis behind the retail space. Connecting with them, getting them swag, connecting them with a strong brand message so they have fun, really powerful words to say when they're interacting with the customer.
We do a lot of stuff where every order we have team samples connected to it to immerse them the product lines. It's just a vibe and a frequency and you just have to keep that momentum going as many pathways as possible. That's a big part of cannabis in what we have to do.
We don't a whole lot influencer marketing on Instagram, at least the brands that I've helped. Again, we're a little limited in cannabis. CBD is a different story because you have people nationwide. So you take the amount of influencers in Colorado, it used to be a bit bigger thing especially in the female influencer space. It was a big thing for a couple of years to have females take pictures themselves smoking either their flower or concentrate and talking about the brand. It's since ran its course and it's not as popular, but in CBD Mountain Made we have 25 sponsored athletes, we call them the Mountain Made Mob and they make a huge impact for the company and they each individually have a large following, but they're also nationwide.
They also can be out riding their downhill mountain bike or at the crossfit gym and hold up a bottle of CBD, where in Colorado if you take a product picture outside and that joint, that pre-roll is lit in a state park, you can get flagged for that. That's illegal. You have to consume your cannabis at home. So the influencers in cannabis, it just depends on what program you're looking for. It can be effective, but technically to date, outside of cookies, just hitting the Colorado market space, every single celebrity brand out here has failed save two, two.
Check Out The Podcast!
Mike has a LOT of great information from his experience in the startup space, check out the podcast below to learn more about how he built several successful businesses!
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