Business
How to build a successful cannabis brand: Q&A with craft alcohol pioneer Rhonda Kallman
Rhonda Kallman has been honing her craft since the age of 24.
That’s when she co-founded the Boston Beer Co. and launched the pioneering Samuel Adams craft beer brand.
In 2012, Kallman launched Boston Harbor Distillery, a whole-grain whiskey and craft spirits company with an award-winning portfolio of brands including Putnam Whiskey, Lawley’s New England Rum & Gin and the fiery Demon Seed Whiskey.
In preparation for MJBizCon, where Kallman will be a featured speaker on Nov. 16, MJBizDaily spoke with Kallman about what the cannabis industry can learn about brand-building and marketing from the alcoholic-beverage sector.
How much does branding influence consumers’ alcohol-purchasing decisions?
People are very loyal to brands. And that’s what makes brand-building difficult. It takes years and lots of money to build brands, unless you’re a powerhouse.
Take High Noon (the hard seltzer brand) from E&J Gallo.
They have the resources. They have the reach. They have the distribution power to really muscle in the marketplace.
But I feel like consumers – and I say this about the Boston area a lot – this is a really difficult place to build brands, because the industry giants from Europe come here first.
In addition, there is a really strong work ethic around here. Consumers work hard for their money, so they want to spend it on brands that they know will deliver a good experience.
When you were launching Boston Beer Co., when did branding come into play?
It was really from the beginning.
A brand like Yellowtail wine or Barefoot Wine, you know what’s so special about that brand? It’s the simplicity in their branding.
With Barefoot, you literally look at a bare foot on the label. A picture is worth 1,000 words.
When the name and the icon are simpatico, it really makes a strong brand.
So when you look at Sam Adams, there’s a patriot on the label and it was synonymous with the name, Sam Adams.
And from the very beginning, it was built into the brand.
Did your approach to branding change when you launched Boston Harbor Distillery?
With Boston Beer, I was really focused on tactical marketing and the go-to market strategies like salespeople alignment, what the shelf looks like and pricing.
But it was easier to stand out in 1984 and 1985 because it was the land of bland.
There were yellow, corn-based beers and they all looked the same and almost all tasted the same.
Forty years later, and I’m still in my fledgling stage of growing Boston Harbor Distillery, and brands to me are so important because the whiskey bottle label really has to speak volumes.
My competition is the legacy companies of Diageo (maker of Johnnie Walker and Bulleit) and Pernod Ricard (maker of Jameson).
So in order to get people to pick Putnam Whiskey off the shelf and spend $40 to $80, this is the epitome of branding.
It’s all come together authentically. I knew that I wanted to make whiskey, and I knew I wanted to do it in Boston.
But I didn’t have a brand idea, which was kind of odd for me, because usually you build a company around a brand idea.
But we found this 11,000 square-foot, pre-Civil War era, 1850s building.
I bought a small, 150-gallon still and was going to get started by making whiskey for other people – like restaurant groups, retailers and enthusiasts.
Then it dawned on me – why don’t I just name my whiskey after the man who built this building?
The 18-acre parcel that I’m on was the center of entrepreneurial commerce in the 1800s, and it was built originally by Silas Putnam to manufacture the hot-forged horseshoe nail, aptly named The Putnam Nail Factory.
In whiskey, the imagery is often rolling hills and horses, whether it’s Kentucky or Tennessee or Scotland.
So I thought I could tie it all together by calling it Putnam Whiskey.
And I have his uncle, the Revolutionary War hero, Gen. Israel Putnam, that was used as the logo for the nail factory, a horse and rider, on the label.
Do you think branding is as influential to consumer decision-making in the cannabis category?
It’s a new category. We no longer have to buy unmarked baggies from a dealer or a guy on the street. But when I go into a dispensary, I’m overwhelmed.
And the ones that I’ve been in, there’s no marketing. I have to choose from a menu over the budtender’s head.
Somebody helps walk me through it, but I’m not really interacting with it.
And what happens when (consumers) bring products home?
How do you stand out? Some cannabis packaging really stands out, like Fireball Cannabis gummies.
Do you think craft cannabis is at all as popular as craft beer was in the 1980s and ’90s?
From my view in Massachusetts, the popularity is just beginning as recreational cannabis has been legal only a few years.
To me, craft means real people using great ingredients to make innovative or better products.
The dispensaries here are handcrafting every product, whether its flower, drinks, cookies, gummies, etc.
So few brands can market across the country like they do in Canada with the big companies like Tilray.
But trials are really important: Getting budtenders to understand the products and creating a store experience. It’s very similar to building a craft-whiskey brand.
For example, I need those budtenders to put us on the menu in a cocktail; otherwise, we’re just a bottle sitting on the bar.
Source: https://mjbizdaily.com/rhonda-kallman-boston-harbor-distillery-samuel-adams-cannabis-branding/
New Mexico regulators fined a cannabis operator nearly $300,000 and revoked its license after the company allegedly created fake reports in the state’s traceability software.
The New Mexico Cannabis Control Division (CCD) accused marijuana manufacturer and retailer Golden Roots of 11 violations, according to Albuquerque Business First.
Golden Roots operates the The Cannabis Revolution Dispensary.
The majority of the violations are related to the Albuquerque company’s improper use of BioTrack, which has been New Mexico’s track-and-trace vendor since 2015.
The CCD alleges Golden Roots reported marijuana production only two months after it had received its vertically integrated license, according to Albuquerque Business First.
Because cannabis takes longer than two months to be cultivated, the CCD was suspicious of the report.
After inspecting the company’s premises, the CCD alleged Golden Roots reported cultivation, transportation and sales in BioTrack but wasn’t able to provide officers who inspected the site evidence that the operator was cultivating cannabis.
In April, the CCD revoked Golden Roots’ license and issued a $10,000 fine, according to the news outlet.
The company requested a hearing, which the regulator scheduled for Sept. 1.
At the hearing, the CCD testified that the company’s dried-cannabis weights in BioTrack were suspicious because they didn’t seem to accurately reflect how much weight marijuana loses as it dries.
Company employees also poorly accounted for why they were making adjustments in the system of up to 24 pounds of cannabis, making comments such as “bad” or “mistake” in the software, Albuquerque Business First reported.
Golden Roots was fined $298,972.05 – the amount regulators allege the company made selling products that weren’t properly accounted for in BioTrack.
The CCD has been cracking down on cannabis operators accused of selling products procured from out-of-state or not grown legally:
- Regulators alleged in August that Albuquerque dispensary Sawmill Sweet Leaf sold out-of-state products and didn’t have a license for extraction.
- Paradise Exotics Distro lost its license in July after regulators alleged the company sold products made in California.
Golden Roots was the first alleged rulebreaker in New Mexico to be asked to pay a large fine.
Source: https://mjbizdaily.com/new-mexico-cannabis-operator-fined-loses-license-for-alleged-biotrack-fraud/
Four marijuana companies, including a multistate operator, have filed a lawsuit against U.S. Attorney General Merrick Garland in which they allege the federal MJ prohibition under the Controlled Substances Act is no longer constitutional.
According to the complaint, filed Thursday in U.S. District Court in Massachusetts, retailer Canna Provisions, Treevit delivery service CEO Gyasi Sellers, cultivator Wiseacre Farm and MSO Verano Holdings Corp. are all harmed by “the federal government’s unconstitutional ban on cultivating, manufacturing, distributing, or possessing intrastate marijuana.”
Verano is headquartered in Chicago but has operations in Massachusetts; the other three operators are based in Massachusetts.
The lawsuit seeks a ruling that the “Controlled Substances Act is unconstitutional as applied to the intrastate cultivation, manufacture, possession, and distribution of marijuana pursuant to state law.”
The companies want the case to go before the U.S. Supreme Court.
They hired prominent law firm Boies Schiller Flexner to represent them.
The New York-based firm’s principal is David Boies, whose former clients include Microsoft, former presidential candidate Al Gore and Elizabeth Holmes’ disgraced startup Theranos.
Similar challenges to the federal Controlled Substances Act (CSA) have failed.
One such challenge led to a landmark Supreme Court decision in 2005.
In Gonzalez vs. Raich, the highest court in the United States ruled in a 6-3 decision that the commerce clause of the U.S. Constitution gave Congress the power to outlaw marijuana federally, even though state laws allow the cultivation and sale of cannabis.
In the 18 years since that ruling, 23 states and the District of Columbia have legalized adult-use marijuana and the federal government has allowed a multibillion-dollar cannabis industry to thrive.
Since both Congress and the U.S. Department of Justice, currently headed by Garland, have declined to intervene in state-licensed marijuana markets, the key facts that led to the Supreme Court’s 2005 ruling “no longer apply,” Boies said in a statement Thursday.
“The Supreme Court has since made clear that the federal government lacks the authority to regulate purely intrastate commerce,” Boies said.
“Moreover, the facts on which those precedents are based are no longer true.”
Verano President Darren Weiss said in a statement the company is “prepared to bring this case all the way to the Supreme Court in order to align federal law with how Congress has acted for years.”
While the Biden administration’s push to reschedule marijuana would help solve marijuana operators’ federal tax woes, neither rescheduling nor modest Congressional reforms such as the SAFER Banking Act “solve the fundamental issue,” Weiss added.
“The application of the CSA to lawful state-run cannabis business is an unconstitutional overreach on state sovereignty that has led to decades of harm, failed businesses, lost jobs, and unsafe working conditions.”
Alabama regulators are targeting Dec. 1 to award the first batch of medical cannabis business licenses after the agency’s first two attempts were scrapped because of scoring errors and litigation.
The first licenses will be awarded to individual cultivators, delivery providers, processors, dispensaries and state testing labs, according to the Alabama Medical Cannabis Commission (AMCC).
Then, on Dec. 12, the AMCC will award licenses for vertically integrated operations, a designation set primarily for multistate operators.
Licenses are expected to be handed out 28 days after they have been awarded, so MMJ production could begin in early January, according to the Alabama Daily News.
That means MMJ products could be available for patients around early March, an AMCC spokesperson told the media outlet.
Regulators initially awarded 21 business licenses in June, only to void them after applicants alleged inconsistencies with how the applications were scored.
Then, in August, the state awarded 24 different licenses – 19 went to June recipients – only to reverse themselves again and scratch those licenses after spurned applicants filed lawsuits.
A state judge dismissed a lawsuit filed by Chicago-based MSO Verano Holdings Corp., but another lawsuit is pending.
Source: https://mjbizdaily.com/alabama-plans-to-award-medical-cannabis-licenses-dec-1/
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