Panel discusses cannabis marketing
WESTPORT — Despite local regulation that temporarily banned recreational cannabis businesses, a panel of six industry professionals came to Earthplace in Westport on Thursday for an event titled “CannaCurious? Marketing, Regulations and Social Equity.”
The event, which was both in-person and live-streamed, was largely about the nature of marketing a product that is not federally legal and the challenges that come with it.
The Westport Planning and Zoning Commission passed a temporary ban of recreational cannabis-related businesses in town last September, with an exception for medical dispensary facilities. At the time there were concerns that a recreational cannabis business may increase the town's traffic problem.
Westport does have a medical cannabis dispensary in town already, which has been open for over three years.
Event co-organizer Tammy Ward said that the group did not realize Westport's local position on cannabis retail sale until after they picked the location. She said they chose Earthplace because “it's a wonderful facility and connects to nature.”
The event was hosted by the American Marketing Association's Southern Connecticut chapter.
“We'd be remiss to not be talking about the cannabis industry in its early nascency — there's a lot to learn in the space, especially here in CT as we open to retail any minute,” Ward said.
Moderator Erika Alonso and six panelists from sectors of the cannabis industry, both regulatory and business-focused, shared some best practices and challenges with marketing the product. They also talked about the impact of current and future regulation on the industry.
Michelle Seagull, commissioner of the Connecticut Department of Consumer Protection, said Connecticut's retail cannabis licenses may be coming later this year or in early 2023. The state legislature legalized cannabis last summer.
One hemp wellness business, a Franny's Farmacy, moved into a temporary location in town in January in anticipation of the state issuing licenses for recreational sale. Should Franny's be awarded a license, they said they will move to a different municipality like Norwalk or Bridgeport.
Seagull said that the state has two lotteries for retail licenses — a general lottery and a social equity lottery. In total the state received over 15,000 applications , over 8,000 of which came as social equity applications, she said. There will be just 12 licenses handed out at first and six of them have already been selected through the social equity pool.
“Social equity is really important in Connecticut,” Seagull said. “It's woven into the law in a lot of different areas, one of which is that 50 percent of each of these kind of rounds of new licenses should go to social equity applicants.”
Panelist Sheri Orlowitz, founder and chair of the Council for Federal Cannabis Regulations, outlined some of the challenges dispensaries face.
There is the upfront cost of getting the license — she said she has heard of dispensary licenses costing anywhere from $1,000 to $50,000. There is also the issue of inventory, both acquisition and storage, she said.
“You hope that you can get inventory because you can only buy from your state,” Orlowitz said. “And the few cultivators in your state often run out or may play games with you.”
Creating a consistent product has been a challenge for retail cannabis brands, said panelist Renee Costis, Mattio Communications' senior vice president of media strategy.
“When you're building a brand, the main thing you need is a consistent reliable experience every time a customer tries the product and in cannabis it's super hard to do that,” Costis said, citing possible supply chain issues since cannabis cannot be legally transported across state lines so all growing and selling has to be done in-state.
Some dispensaries struggle with payment too, as some are unable to take credit or debit cards so they are handling large sums of cash. Orlowitz said that businesses also cannot deduct their expenses on their taxes since the plant is federally illegal.
“So it's amazingly difficult for the seller of pot to be able to sell pot,” Orlowitz said.
Pricing is another challenge businesses face, she said, since the illegal cannabis market is often cheaper for a consumer than legal cannabis is.
“Even if you want to have a thriving cannabis brand, you're super passionate about it and it'll be a great idea, there are a lot of roadblocks,” Costis said.