2023 Year in Review and 2024 Predictions - Branding Bud Live Episode 53
THE SUMMARY
Join Branding Bud Live co-hosts David Paleschuck and Adriana Hemans for a deep dive into the highs and lows of the cannabis industry in 2023 and unpack the top 10 best and worst events that shaped the landscape. From groundbreaking advancements to challenging setbacks, we’ll cover the best and the worst moments that defined the year for cannabis. We'll also peer into our crystal ball to provide insightful predictions for 2024, exploring potential trends and regulatory shifts that could influence the industry's trajectory in 2024.
THE CO-HOSTS
David Paleschuck, Adriana Hemans
THE TRANSCRIPT
DAVID PALESCHUCK
Welcome to Branding Bud Live, the live stream that’s 100% THC and 0% WTF. Every week we bring business people together to talk about the business of cannabis. I’m David Paleschuck, founder of Branding Bud Consulting Group and author of the first book on cannabis branding, “Branding Bud: The Commercialization of Cannabis.” I’m joined by my co-host and BCF “best cannabis friend,” Adriana Hemans, the Director of Marketing at Green Meadows. Hi Adriana!
ADRIANA HEMANS
Hi David. Thank you for that intro. I’m so excited to co-host the show with you. We’re bringing amazing guests from across the cannabis ecosystem to share their perspectives. My favorite thing about Branding Bud Live is that we focus on building community - and we encourage audience participation. It’s not just about us talking, it’s about all of us building something together. So feel free to drop your questions and/or opinions in the chat, and we’ll share them too.
DAVID PALESCHUCK
I’m super excited - and grateful - today for a number of reasons. They are:
#1. I’m grateful to and for our show sponsor - High Hopes
A creative agency that specializes in the cannabis industry.
With over a decade of cannabis experience.
High Hopes understands the challenges of our industry and helps its clients
With better branding, packaging, website design, SEO, and marketing.
I’d like to congratulate them on their recent CLIO Award win
Be sure to check them out at: ivegothigherhopes.com
#2. We just launched two online courses on cannabis branding and brand development and have received such great feedback, that we’re going to keep offering up more courses! Please check them out and more at cannabis’s best-kept secret www.brandingbud.com/edu. We’ll throw up a direct link shortly.
#3. Last but not least, our guest today is Kieve Huffman, Founder of Engager Digital and we’ll be chatting about 2023 High & Lowlights as well as 2024 Predictions. Specifically, we’ll be calling out our:
Top 5 highlights
Bottom 5 lowlights
And 5 predictions for 2024
I’m super excited about all the things that are going on! Let’s get to it!
ADRIANA HEMANS
Me too! Let’s do it!
DAVID PALESCHUCK
Let’s jump in! Today we’ll be chatting about the Top 5 Highlights and Bottom 5 Lowlights of 2023. Then we’ll jump into 5 predictions for cannabis 2024. Let’s go!
ADRIANA HEMANS:
HIGHLIGHT #5 – WORKPLACE & EMPLOYEE PROTECTIONS
California was the first state to legalize medical marijuana in 1996 and became legalized adult use in 2016, AB 2188 is the first law in CA to specifically provide workplace protections for employees who consume cannabis.
Pre-employment drug testing
AB 2188 prohibits employers from holding drug screen results against an applicant if the test reveals evidence of past marijuana use. The new general intent of employment-related drug testing is to test for impairment on the job and/or at the worksite, not for long-term use. Additionally, it will become illegal for employers to ask potential employees if they have used cannabis or marijuana.
Termination based on marijuana usage
Before AB 2188, employers were within their right to discipline an employee who used medical or recreational marijuana during their time off, however, that notion will soon be illegal.
Exceptions to the protections
AB 2188 still allows employers to restrict marijuana use on the job. The bill does not allow for employees to possess, be impaired by, or use cannabis on the clock.
DAVID PALESCHUCK:
HIGHLIGHT #4 – WORLDWIDE ACCESS
EU: While medical marijuana is becoming more available in Europe, cannabis remains illegal in most EU countries for personal use. Germany moved one step closer to becoming the second EU country after Malta to legalize cannabis for adult use in a move that could influence other countries to follow suit. Similarly, the Netherlands announced plans to launch a pilot program in December testing out the legal sale of cannabis.
Thailand: The ‘Wild West’ Of The East has over 6000 licensed dispensaries.
US: Eight states projected to surpass 1 billion in sales for 2023. More than half of U.S. population lives in places where marijuana is legal for adult use.
ADRIANA HEMANS:
HIGHLIGHT #3 – X ALLOWS THC ADS
X (formerly Twitter) became the first major social media platform to allow cannabis ads, giving industry advertisers access to a wider audience. The policy change came with numerous restrictions, though. Requirements include being licensed by the “appropriate authorities” and not targeting those under 21.
Meta: Allows ads for some hemp products but prohibits CBD or THC products.
Reddit: Only permits ads for edible and topical hemp-derived CBD products in the U.S.
DAVID PALESCHUCK:
HIGHLIGHT #2 – SAFER BANKING ACT PASSES SENATE COMMITTEE
The SAFER Banking Act (Secure and Fair Enforcement Regulation Banking Act) passed receiving votes from both parties. The bill was originally introduced more than a decade ago and has passed the House multiple times. If signed into law, the SAFER Banking Act would:
Extend protections to financial institutions that offer services – such as bank accounts and loans – to state-approved cannabis businesses.
Under the status quo, many licensed cannabis businesses have been forced to operate as cash-only, leading to break-ins and robberies.
DAVID PALESCHUCK
Audience: Can anybody guess what Highlight #1 might be?
ADRIANA HEMANS:
HIGHLIGHT #1 – HHS RECOMMENDS RESCHEDULING
Health and Human Services (HHS) recommends to DEA to reschedule cannabis from Schedule I to Schedule III under the Controlled Substances Act. Many argue this is NOT good for the cannabis industry, while many think it is.
What’s not good? Big pharma moves in?
What’s good? 280e tax law goes away? More research.
Note: This is all speculation
DAVID PALESCHUCK:
And now to the bottom 5 lowlights
ADRIANA HEMANS
LOWLIGHT #5 – LEGAL WOES IN NY ADULT-USE MARKET
Bureaucratic problems and lawsuits have allowed only about two dozen legal dispensaries to open, as farmers sit on a glut of crops and black market shops fill the void.
Recent settlements lift a court order that has blocked the state from processing or issuing retail marijuana licenses since August. State officials said the agreement will allow more than 400 potential retailers to move forward with pending applications to open storefronts. Time will tell.
DAVID PALESCHUCK
LOWLIGHT #4 – FAKE CANNABIS UNIONS
It looks like it’s time to add “fake unions” to the long list of problems facing California’s multibillion-dollar legal pot industry.
Some of the biggest legal cannabis companies in California appear to be violating state law by working with organizations that claim to be labor groups but are accused of not actually attempting to fight for workers’ rights.
California law requires any pot company with more than 20 employees to sign a labor peace agreement with a “bona fide” labor union. The law is intended to provide workers with easier access to labor organizations that can petition the company for better wages and working conditions.
ADRIANA HEMANS
LOWLIGHT #3 – FLAT JOB MARKET
The US cannabis industry now supports 417,493 jobs in 2023
Job employment dropped 2% from 2022 to 2023
The top cannabis job market is California with 83,593 jobs
New York is the 2nd largest market for cannabis job growth potential (behind California) with 65,000 potential jobs
DAVID PALESCHUCK
LOWLIGHT #2 – SHOPPING FOR LAB TESTING
Details of each laboratory's procedures and validation methods often are proprietary. This results in an environment where it is difficult to validate the accuracy of cannabis test reports ‒ a particular problem for multistate operators that expect consistency with their branded products across multiple states.
This cherry-picking of lab results usually boils down to THC percentage with retailers seeking to either over-inflate or under-represent THC potency test results to either stay under the legal limit (for things like CBD products) or secure products with extremely high THC levels (usually over 20%) to keep up with customer demand.
But, the root of the problem goes deeper than just retail – in even worse news, growers and retailers alike are also guilty of lab shopping to cover up pesticide use and the presence of metals and other contaminants in cannabis products.
ADRIANA HEMANS
Audience: Can anybody guess what Lowlight #1 might be?
DAVID PALESCHUCK
LOWLIGHT #1 – TRULIEVE … AGAIN
You may have heard about Trulieve’s CEO Kim Rivers and her husband John “JT” Burnette, who was sentenced to three years in federal prison and fined $1.25 million on public corruption charges.
Or about the unfortunate incident involving the death of employee Lorna McMurrey at one of their Massachusetts locations in January 2022.
Or about Trulieve’s racketeering lawsuit against former employees and vendors in Arizona
But the latest is Trulieve being awarded Alabama’s only “minority-owned” medical cannabis license. Among the 33 applicants, Trulieve Alabama, Inc. stood out as the only enterprise recognized as a “minority-owned business” to receive one of these coveted licenses. The 2021 law specifically mandated that at least one of the five licenses be allocated to a company with at least 51% minority ownership, a criterion fulfilled by Trulieve Alabama. Trulieve, a publicly traded company initially founded in Florida, has expanded into various states and some would say, is unethically acquiring licenses.
This decision underscores a broader trend in the cannabis industry, where larger corporations often partner with minority operators to meet state-level “social equity” provisions.
ADRIANA HEMANS
PREDICTION #5 – NY STRUGGLES TO CONTAIN ILLICIT MARKET
And now the 2023 lowlights. There are countless unlicensed smoke shops, bodegas and storefronts selling cannabis that it is expected NY will struggle to contain the illicit market after the launch of adult use cannabis.
DAVID PALESCHUCK
PREDICTION #4 – CONSUMPTION LOUNGES ADVANCE
Across many states – California and Nevada, in particular, we see and predict the advancement of cannabis consumption lounges.
ADRIANA HEMANS
PREDICTION #3 – CANNABIS TOURISM EMERGES
Cannabis tourism is rapidly emerging as a prominent contender in sustainable travel, attracting adventure-seekers and connoisseurs alike. Luxurious retreats have sprung up in recent years, providing exclusive accommodations, top-notch concierge services, and curated weekend itineraries filled with good food, drinks, and immersive cannabis-tasting tours.
The appeal of cannabis tourism is on the rise, with Forbes declaring the industry a $17 billion operation. As pandemic-weary Americans find renewed excitement for travel, we can expect this cannabis industry trend to take center stage in countless travel plans for the foreseeable future.
DAVID PALESCHUCK
PREDICTION #2 – INCREASED CANNABIS INVESTMENT
IF the SAFER Banking Act is voted into law and
IF cannabis is rescheduled to Schedule 3, we’re likely to see more investment as companies no longer deal with the 280e tax AND big pharma comes in and commences cannabinoid research.
ADRIANA HEMANS
And now the 2024 predictions. Audience: Can anybody guess what Prediction #1 is?
DAVID PALESCHUCK
PREDICTION #1 – SNOOP: BACK TO SMOKING
After Snoop’s recent declaration that he’s “going smokeless” – only to find it was a promotional stunt for a smokeless fireplace - we predict Snoop Dogg will start smoking weed again in 2024.
ADRIANA HEMANS
And that’s our 2023 highlights and lowlights and 2024 predictions!
DAVID PALESCHUCK
Thank you for joining us today. We appreciate your insights and participation.
ADRIANA HEMANS
Thank you. Happy holidays!
DAVID PALESCHUCK
That’s our show for today. We hope you enjoyed it as much as we did. As always, that was the fastest 45 minutes of my week! We’ll be back next year with new guests, new topics and new umph!
Don’t forget to check out our recently released online courses that have received rave reviews. “The 14 Cannabis Brand Archetypes” and “Creating A Meaningful Cannabis Brand” which can be found on our site at www.brandingbud.com/edu - and you find the link right now in the chat. Remember to use our exclusive 25% discount code BBEDU25 for our LinkedIn listeners.
Again, we’d like to thank our CLIO Award winning sponsor High Hopes – a cannabis-centric agency with over 10 years in the industry specializing in branding, packaging, SEO & marketing. Check them out at ivegothigherhopes.com
ADRIANA HEMANS
Hit that button to register so you don’t miss it. If you miss us in the meantime, you can re-watch today’s episode, or any of our previous episodes, on our LinkedIn page, Branding Bud Live, or on our YouTube channel. Please give us a follow on LinkedIn to stay on top of everything Branding Bud Live.
DAVID PALESCHUCK
And you can listen to our podcast on most podcast platforms including Apple, Google, Amazon, and Spotify. And of course, don’t forget to check out cannabis’s best-kept secret at www.brandingbud.com
Thank you everybody. Thank you, Adriana for being the best co-host in the industry. Wishing you all a happy holiday and new year!
ADRIANA HEMANS
Thank you. Bye!
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