Cannabis Industry Events: Fragmented and Flourishing - Branding Bud Live Episode 20
THE SUMMARY
What do cannabis events and other trade shows have in common? The truth is most US trade shows are regional. So why is it a surprise that cannabis events are flourishing in a fragmented industry? Find out the answer to this question and more, as Branding Bud Live streams live TODAY with George Jage and Sid Patel, two founders of the industry’s better-known events, MJ Unpacked, and the Cannabis Drinks Expo.
THE CO-HOSTS
David Paleschuck, Adriana Hemans
THE SPECIAL GUESTS
Sid Patel, Founder, Cannabis Drinks Expo
George Jage, Co-founder, MJ Unpacked
THE TRANSCRIPT
David Paleschuck
Welcome to Branding Bud Live, the live stream that’s 100% THC and 0% WTF. Every week we speak with business people about the business of cannabis. I’m David Paleschuck, founder of Branding Bud Consulting Group and author of the first book on cannabis branding. I’m joined by my co-host Adriana Hemans, a Marketing executive with over 8 years in the cannabis space. 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
Thank you, Adriana. And thank you, everyone, for joining us today. We have a lot of hot topics to get into today. Today, we’ll be talking about "Fragmented and Flourishing: Event-based Branding in Cannabis". Some of the topics we’ll be discussing are:
What is the overall state of the industry?
Why a move toward hyper-specific tradeshows and events?
How does the fragmented landscape play into the equation?
Our guests today are George Jage and Sid Patel, two founders of the industry’s better-known events, MJ Unpacked, and the Cannabis Drinks Expo. I’m excited to have both of them on the show today.
Adriana Hemans
Me too! Let’s welcome them onto the show. Hi, Sid & George!
George Jage
How are you doing David and Adriana, thanks for having us. Sid, thanks for letting me do this with you. Appreciate you.
Sid Patel
Same here. Thanks, Adriana. Thanks, David. Hello, everyone. Looking forward to chatting.
David Paleschuck
I'll just call out that both George and I are in Seattle. Adriana is in Los Angeles, and Sid is in London. And we got folks all around the world here to chat with us today. And that's, that's pretty amazing. We're pretty excited about that. So thanks for being with us.
Let's kick it off, Sid, you have created not only the Cannabis Drinks Expo, but many other trade shows related primarily to wine and spirits, both in the US and the UK. Would you just take a minute and, you know, give us a quick take on the parallels between regulated markets in this wine and spirits, you know, versus cannabis?
Sid Patel
I think the sales and marketing side of this business is very similar. So when you are knocking, you know, retail outlets or bars or restaurants, it's the same way you're opening accounts in dispensaries, you know, so the whole sales and distribution model of the way brands are placed or the support programs to the retailers, you know, it's pretty much similar. The markups obviously differ from state to state here in cannabis, but in alcohol, you know, they are also pretty much 30% 40%. But I think sales and distribution is a really, really the common factor there. So it's basically very easy for wine and beer spirits distributor or a beer distributor, if the light obviously law allowed to pick up a cannabis brand and hit the road, you know, because they know how to sell at then comes the making side of it. So when you know, there used to the innovations, same happened with no alcohol beverage products, right? So we're seeing a growth there as well. And, you know, CBD is the same thing. So the wine and spirits industry is really mature enough to know where the next consumer is. And we think and that's where we started this, where it's going to be more of, you know, CBD as the new consumer and people are switching from alcohol. So I can see a lot of big brands putting their money there. And we'll obviously chat later on, you know, on what my thoughts are there. But that's where I think the making, and the distribution has similarities. It's just the legalities which are stopping, you know, for everyone to do everything sort of thing in wine and spirits.
Adriana Hemans
This is a real cool yes said events focus on beverages, of course. And then our guest, George his events, MJ unpacked, are focused on investors and happened in Las Vegas in New York. So question for you, George. Why, why those two cities?
George Jage
Well, let me take a step back, our event isn't focused on investors per se. I mean, it's certainly an important part of the hub of the wheel that we're building. MJ Unpacked, we launched this show really only about 16 months ago. And it's the only national show that features brands and retailers from around the entire country, really at a single location. And so we really give the opportunity to see the kind of landscape of where cannabis is moving as a CPG. Industry. And, you know, we have done them in New York and Las Vegas, we're going to be actually doing our fall show in Detroit. We'll be announcing that formally soon. But I guess you can hear it first on brand new blood. And, you know, kind of going back to what Sid said, I mean, you know, there are tremendous parallels to alcohol and the distribution model on the sales model are expected, right, we're not there yet. We're building a national CPG show for an industry that doesn't have a national CPG market. So I would almost say that Sid and I are kind of from the future, waiting for the rest of the world to catch up with us. But you know, when you look at where the trajectory of cannabis is going, it is a CPG industry, it will behave very similar to the alcohol model with distribution and state taxes and regulations. But you know, what I've seen out there in the in the tradeshow space for so long and having built MJBizCon Is that, you know, most of the events out there are all supply side shows. And we've moved way beyond that in this industry. You know, anybody who's standing up a licensee isn't looking for light bulbs and label makers anymore. They're looking for capital, they're looking for partnerships. They're looking for distribution. They're looking for license deals. And this is ultimately where we go as an industry. So we wanted to create an event that the industry deserves that stewarded responsibly that's not in the business of just selling real estate and tickets, but really driving value.
Adriana Hemans
I love that. I love that. And to our audience. If you have questions about what it's like in the future, drop them in the chat. Hi, Becky from Texas and hi to my mom, Carolina who is in upstate New York at the State University of Potsdam, talking about the cannabis business class they teach up there, which is awesome. And hi to Katrina from Denver. Welcome everyone
David Paleschuck
You know, George, just quickly, I mean, we're talking about the regionalization here and you The one thing I didn't mention, and forgive me, let me even step back for a moment. You, you had a big part in, in, in the development of, of MJBizCon, which, you know, for years for 12 years now has been the one main event that everybody shows up in Vegas for annually. And it's gotten so big and really, somewhat unmanageable that people get lost there. They don't, they don't actually know why they're there. And right now, the industry is so big from agricultural, you know, machines, through extraction machines, through rolling machines, through brands that might show up there, it's too much for everybody. So 12 years annual show, MJBizCon, you came out, I want to say, two years ago, maybe three years ago with MJ Unpacked, which, which is really a focus on and just to be clear, no investors, but brands, and yeah, you know, pulling those together, you know, that, that, to me is really interesting. And, and so it was really this more focused show, Sid has done the same thing with these beverages on tell us tell us how brands sort of, you know, rise to the top in a situation like that in the fragmented industry?
George Jage
Well, sure. And a couple of points you brought up there, I mean, you know, as far as you know, regionalization, and everything else, and MJBizCon. And, you know, when I took over there, there was only one full time employee and was able to bring a lot of experience from building a global trade show for the tea industry, which also has a lot of parallels to cannabis, and other industries, and really being able to kind of, you know, meet the needs of the moment of the market, you know, with this event, and, you know, any event regardless of if it has international attendance is going to have a certain regional component to it. And this is why Sid’s in Chicago, tons of brands in Chicago, right, there's certainly a lot of beverage companies in Chicago, it's a good location for him, San Francisco as well. And it's not about you know, so listen, we've gone through a pretty tough economic downturn, and when things are tough, you know, people are cutting back travel and marketing budgets. So if they're going to invest time and money to get out of their office and go and travel to the show, you know, and they can go to CES show and talk specifically about beverages and come to our show and talk about beverage, flowers, CPG, packaged goods and everything else that we have at our event, it's going to be a higher return on their objectives and their investment of time and money. You know, going to a show like MJBizCon, I'm very proud of the work I did to create that event and with some really talented people. But you know, I mean, you might have 100 leads from that show, and one or two of them will actually pan out, you go to Sid’s show (Cannabis Drinks Expo) and if you're a beverage company, you know that the people that are coming to that show are specifically interested in the beverage category and have a direct relationship. And because of our qualification at MJ Unpacked, do you have to be a brand retailer, a cultivator, a licensed operator with the title manager higher? So we only have an executive level audience that's highly vetted, that's coming. So you know, I think it's it comes down to is, you know, how do you create a good return on objectives for people's time and money, and especially in a scarce market, when you know, people have to make choices if they're going to go to, you know, one show, or they're going to go to two shows, but they're not going to six or seven anymore?
Adriana Hemans
Right. What I love about your show about MJ Unpacked having participated, I think a couple times now, is how we were just saying it's such a targeted audience. And being at chorus compliance, where we're selling software to the retailers, it's, you know, that the people in the room are the people that you want to talk to, so it can be really impactful to participate. And you just mentioned a second ago, George, sort of the like, the ups and downs that we're looking at, and I know that through your role, you've seen a lot of brands come and go. Any thoughts on what's sort of like, what's the secret sauce of branding? Yeah.
George Jage
Well, that's the million dollar question. I mean, you know, when you look at kind of the evolution of the cannabis market, and again, going back to, you know, when I was running MJBizCon, I mean, there was a need to get equipment and machines and labeling and everything else to stand up your licenses because and then we've kind of moved in this expansion era, and most of the time in the cannabis industry, which is unique that the relationship with the consumer has lived with the retailer because you go to a store, and you are going to be subjected to choose from the selection that is probably limited of what's available in the marketplace of maybe gummies or tinctures or flour, based on the relationship of that retailer. But we're really kind of entering that golden age of brands right now. And we're starting to see more ways that the brands can directly build really kinship with the consumer. They're doing some direct DTC models are starting to emerge. Twitter's allowing advertising for cannabis brands because Elon Musk probably realized that he's tanking the company. But you know, when you look at what is that secret sauce? I mean, you know, you're branding experts you know that it's how do you create an emotional reaction or relationship with the consumer with your product? And I would argue that there's probably not a product out there in the world that can create an emotional response better than cannabis in the consumer. So can you tell your story can you communicate that story through your packaging and your product and really be able to create a relationship with that consumer so when they come back to the store, they're not just say, give me a gummy. I want your gummy, or I want your flour.
David Paleschuck
George, you make a great point and I'm going to flip this over to Sid because, so we talk about emotional connections. It's a fact believe it or not that the number one brand that people can you believe this that people tattoo on themselves is Pabst Blue Ribbon. And so there's an emotional connection when you're willing to tattoo Pabst Blue Ribbon on your body.
George Jage
I worked at Pabst Blue Ribbon and college and the microbiology labs. However, I will say I do not have a PBR tattoo on me.
David Paleschuck
I know a person with a PBR tattoo! That said, we've seen large MSOs come into to the beverage space, we've seen smaller brands come into the beverage space, we've seen PBR through peps labs come into the beverage space, cannabis infused beverage space. How you know is the average form factor different than other form factors? Because these emotional ties are already created for example, with PBR there is a history.
Sid Patel
Yeah, so I think that it's more for nostalgia. So if tomorrow Budweiser comes up with cannabis brand, you're going to have the same following go there and try it, right. So these are actual nostalgia brands, and there is a loyal following there. Which obviously, like if Ken is trying to make, but there is that benefit, this whole industry, like the you know, when a big player, like even coworkers, anyone steps into this beverage category, they're going to bring their fans. So I just think that that is for sure. going to happen. Back on what you said, you know, where I see similarities is really, they know how to brand because they're expert, they know exactly how the mechanics of branding works. You know, because they've been doing that in beverages. It's just alcohol. Now, it's just the cannabis, they have to fill up, they have to apply the same principles and methods. It's you know, in making that branding.
George Jage
I like to add on to that, too. I mean, you know, when we look at cannabis, and we're a kind of a form factors are being introduced, I mean, you know, beverage is still a very small component of this. But, you know, we have, you know, millennia of history of, you know, consuming beverages and as a form of intoxication through beer, wine, spirits and everything else. And, you know, as cannabis continues to expand, we know the flower is still really strong, because typical, the traditional consumers like myself, you know, prefer flower. But, you know, when we jump into kind of the future of where this goes, and certainly the younger generations that are going to be coming about adult age, I think that beverage is going to be one of the top categories in our industry. And it's going to be so much easier to replace the antioxidant than the form of social lubrication that we're all accustomed to, of going to bars going to a restaurant ordering a granddaddy, purple and coke. There's great products coming out in the marketplace all the time. And if I can just shamelessly, I want to give a shout out to Stacey Primark who keeps commenting in the post. She had one of the best cannabis infused dinners. She's an amazing chef that I've ever had in Seattle, if you do another one, Stacey let Dave and I know we'll be there.
Sid Patel
of I think I you know a couple of other things here like lot of cannabis drinks is the longest play that I see happening in cannabis industry because, you know, it's a very hard category right now. You know, and especially investors drying up it's a survival of the fittest game, but the upside is highest. So any big brands that are in there, have imagined this as a 10 year plan, you know, so it's got the highest upside as George said, like once this becomes as a social consumption drain, this will be, you know, breaking the cannabis category, because it's breaks the social way, we consume cannabis.
George Jage
And this might be a point where we differentiate a little bit sit and listen. I mean, I know that you've got a lot of relationships in the wine and alcohol industry. I mean, this is one of the things that keeps me up at night is that, you know, we know that at some point in time, all of the big beverage companies and alcohol companies are either kind of dipping their toes in, I mean, maybe a little bit more overtly with Coors Molson and the canopy deal. You know, Anheuser Busch, family members, you know, starting cannabis companies. But at some point, when we see that federal legalization, those companies are going to be exceptionally well capitalized, have tremendous CPG discipline that you're talking about. And they're going to go out and try to just soak up the whole market 100%. And if we lose the thought leadership of the cannabis industry to alcohol or tobacco, I think that we've lost, I think that cannabis is completely unique. And the people that I meet every day in this industry are coming in from it from a whole plant medicine and a compassion standpoint, reducing societal harm, reducing physiological harm to people as advice, and I don't want it's not that we don't want alcohol to come in, they can bring a lot of value, but they better not kick everybody out. Because then we lost.
Sid Patel
Know what's going to happen is really, they're going to start buying cannabis brand. So all these small brands are playing a lot of valuation games here, too, you know, it's just the moment the laws are getting passed. And as a bush doesn't have time to make a brand from scratch, they just want to buy candy or something like that. And, you know, so there's a lot, it's really, you know, this brands know what is going to happen, the moment floodgates open.
George Jage
Correct. And big companies don't innovate, they buy innovation, like you said, you know, they buy the honest teas and the Snapple’s, and the monster energy drinks or whatever. But you know, again, if they come in and they you know, think that they're just going to kind of replicate what they've done in the alcohol space with cannabis and not understand the passion and the compassion behind the plant. And the healing benefits is plant not just to society, but to the planet. Again, we will lose if we don't maintain the thought leadership of the cannabis industry as this industry goes national.
David Paleschuck
It's much more complicated than if you will cannabis versus alcohol. I think there's, there's CPG involved here. There's pharma involved here. There's all sorts of things. And I think one of the things which is really intriguing to me is, so having worked with Mountain Dew, for many years, Mountain Dew now has an alcohol beverage. And so what they've seen are they're young, little 13 year old, complete skateboarder, you know, kids grow up over the course of that brand. And so sin almost bringing it back to the nostalgia effect. So you see Mountain Dew with an alcohol, you know, beverage it's really interesting to see those 13 year old kids have grown up to be 18 or 21 year old plus. So I see that taking place too. It's, there's a lot of grabs from a lot of different industries trying to get their head around what cannabis will be.
Adriana Hemans
I think a lot of thing, something that's also overlooked a lot is people tend to think of like, people who are drinking cannabis or people who are drinking alcohol, these are totally separate occasions. And that's not necessarily the case, there can be a lot of overlap coming from consumers. 40% of the time, people are doing both at the same time, so that can like, you know, they can peacefully and harmoniously exist together.
George Jage
I think there is a multiplication factor when you do that. But as long as you manage your intoxication properly.
Adriana Hemans
I feel like we could talk about this for a long time. But I want to tee up our audience participation. Our chat is super active today. And thank you, Stacey for mentioning what's happening in Minnesota. They're allowing THC drinks to be sold in traditional outlets, which is exciting to see. We were talking a little bit about branding, and we were talking about the connection between the consumer and the brand and that emotional connection. And I wanted to talk a little bit about advertising, which as we know is a big hurdle for the for the industry. Traditional advertising channels have been shut down to cannabis brands until recently as we talked about a little bit earlier. So today's Canna truth is in 2022 there were more cannabis related tweets than tweets about A. Coffee, B. Golf, C. the NHL or D. All Of The Above. Feel free to take a guess.
David Paleschuck
George, you mentioned the channel opening up and Elon trying to make up for maybe some of his …
Adriana Hemans
Hail Mary pass. That's right.
George Jage
So either Elon also likes to smoke a good joint once in a while too. Let's just be honest.
David Paleschuck
This brings back we're never talking about normalization, we're talking about what Stacey mentioned, we're talking about, you know, channels opening up, we're talking about the ability for people to connect with, with brands, and in more ways than one. So, audience, what do you think?
Adriana Hemans
I'm counting for votes for D, All Of The Above and one vote for A. Coffee.
David Paleschuck
That's right, George, what are your thoughts on this?
George Jage
Well, I my original answer was D.
Sid Patel
Um, but I was guessing B and C. I thought A. Coffee would be still more popular.
David Paleschuck
Yeah. All right. And the answer is …?
Adriana Hemans
D. All Of The Above. This year, and it was about Twitter's new policy. And I should mention too, that it is all of the above. So it's Coffee, Golf, and the NHL – but not combined. There are more cannabis related tweets about coffee. And they also beat out golf and the NHL. Interesting.
David Paleschuck
Well, maybe there's more hope for the for the Twitter channel than I had originally thought.
George Jage
And all those industries have SAFE banking.
Sid Patel
Yeah, I wonder how the accounts are taking ad money.
Adriana Hemans
I started a Twitter ad account, just as a side note, and it took me like almost two weeks to get it approved. So there were some hurdles still, even though it's technically illegal. Now. If you don't mind, I just want to like jump over and asking you a few more questions to our guests. And this one is for George, and this is about sort of like the regionality of the cannabis industry. And what do you see as the role of having a national event when we have such regional state markets that are so different?
George Jage
Yeah, I think it's just again, it's you know, looking at where we're going, not where we've been, you know, and it's challenging to, you know, I mean, you think about what's happened in California and you know, what these growers and cultivators were faced with when they were supplying, you know, the entire country with weed prior to the option to go illegal and then have to lose 95% of their serviceable market by you're getting licensed in the state of California or remain illegal and have a target on their back. I mean, it's a zero sum game like we see markets that are all over the country that are starting to see price, competitive pressure, and I was in one state market, I'll leave I'll leave nameless that I could go to a dispensary and get an ounce for 20 bucks and it was decent weed. You know, it's just there's this race to the bottom because of oversaturation of licenses. And interstate commerce solves a lot of those problems. It allows people to create economies of scale allows brands to move between state markets and compete on quality, freshness. They're testing on their brand storytelling, not just trying to race to the bottom on price, because that's a zero sum game for everybody. You know, and what we see, and you know, after our first New York event, I must have had a dozen of our exhibitors from our previous Las Vegas event. They were in New York, they're like I'm based in California, I can't wait to get out of there. I need to you know, originally from the East Coast. So you know, I think brands at least the smart money or maybe it's not the smart money but at least the lighter wallets you know, realize that they can go state to state and set up licensing deals create an IP brand, that they can have a multiple state presence without having to go to each day go through a license process and invest millions of dollars to stand up an operation, each being taxed separately, and punitively. The IP license deals clean, it's easy. It still requires us to have operators in those states that are open for business for doing white labeling, though.
David Paleschuck
You make it sounds so easy.
George Jage
But if it were only so easy, right?
David Paleschuck
Yeah, you know, when you think about a brand too, and the consistency, you know, consistency is what a brand is right? So now you're in one market where a minimum serving size is 10 MGs of THC and another where it's five and you know, it's and others were in the medical side. It's 50 MGs.
George Jage
I think that depends on the product too. You know, like, Rusty from Old Pal, great IP branding. You know, a story there, me was, I think he started out trimming somebody's cultivation in California. And now he's got a brand that's in, I think, 10 to 15 states. And his brand is brand models, like this is every man's, you know, every everyday kind of weed that you can share with your friends, right? And so it's not I'm not selling like super premium, super expensive weed, it's the type of stuff you're happy to pass out at a party. It's decent, it's enjoyable, it's priced, right, it's, you know, economical, right. You know, and I think other companies like, and I don't know, the exact formulation for can, but, you know, when cans go on state to state, you know, they've already got their formulation of their beverage. So really, all they need is THC is an active ingredient, you know, there's not there, it's probably a fairly easier thing for them to have SOPs and controls on, you know, you move into somebody that, you know, as a very specific product that's, you know, maybe live resin or anything else, I think that gets really difficult to manage to stay from consistency standpoint. You know, but there's companies out there like WYLD and Wana, and others that are, you know, really building a national footprint. And it's going to be interesting. I mean, I, you know, I mean, this is real, really where the wealth creation said touched on this before, I mean, you know, where we're going to see the true wealth creation, and the kind of generational wealth that everybody talks about, is going to happen on the CPG brand side, and America is one of the biggest exporters of brands globally. So as this market grows, and brands established dominance, the United States, they're going to have huge opportunities internationally, to expand the product footprint.
David Paleschuck
So along those lines, Sid, we're talking about the long game, but right now, there's so many small companies that are just holding on, you know, just trying to figure out where they're going to exhibit next door, how they're going to get to the next investor. What do you, you know, what do you share with brands who want to come to your show? What, what can they find that your show? Is it new consumers? Is it investors? Is it manufacturers, partners, you know, licensees, like George just mentioned, and other states?
Sid Patel
Yeah, so right now, actually, that is the biggest thing that they all want co packers, because, you know, they're all trying to expand other states, and especially the new states that are opening up like East Coast, you know, so trying to, we're trying to make it more of a national presence, where we're inviting a lot of co-packers at the show, so that business can happen at this both locations. So that's one thing for sure. And second thing, I think they're looking still is for money. Because, you know, as I say, like, you know, cannabis beverage market is still looking to raise some funds. But back to, I think, how they're navigating this is there are three ways you know, one is a small entrepreneur who's just trying who's, you know, made up this, who wants to do this, you know, distributing in some local dispensaries and getting organic growth, like bootstrapping, you know, one is, you know, like, Boston Beer Company, which is waiting to make the best product, like they're focused on quality and product development is the focus. So the moment they're going to come out with their product, they want to make sure that it's completely a repeat order sort of product, right? Because they don't have a distribution problem, they can go to Target tomorrow, and they can get the job done. For them. It's more of, you know, consumption. And then there, there are companies, you know, who are playing the reverse game from the retailers that a lot of companies, I know that they have the connections in CPG, like targets and the Walmarts of the world. And they're sort of playing the game of their distribution models. And the moment this becomes federal, you know, and big supermarket is going to place the brand, everything is going to start working so many, everyone's navigating very differently. But for example, if you're aiming for targets in the Walmart's, you need investors, and if you're just looking for just bootstrapping and organic growth, then yeah, it's tough because it's purely on dispensary and retailers giving you a chance.
Adriana Hemans
I'm excited for the next International Cannabis show. And I love what you were just saying about being able to expand and bring us brands to the entire fabric.
Sid Patel
I think I agree with George like, I'm also seeing a little bit of saturation in California. So Chicago, surprisingly, has been harder for us than San Francisco. But I think maybe for the same reasons is explained. And a lot of East Coast people are moving so similar, like as you said, like we just have to see where next so we may be going east coast as well, you know, alternate maybe but the problem with Illinois is just it lacks its lacks diversity and its license ownership.
George Jage
I mean, it's really been kind of primarily dominated by a handful MSOs in the space that control the entire vertical and I have a lot of OG friends that are in the Chicago area, they drive to Michigan to get their weed because they can get a better quality product up there at a cheaper price. So, you know, I think you know, part of the challenge with beverage and beverage I absolutely agree is going to be a huge part of this industry and a huge category over time. But it's got to must see federal legalization. I mean, the high capital costs of manufacturing a beverage and the transportation costs because there's liquids involved. And everything else is very capital intensive part of the business. And yeah, I mean, like look at CANN, huge success story. But, you know, I think that they're still making money, find capital, right. And the capital markets are incredibly dry right now, especially in cannabis.
David Paleschuck
We have this as a stat in the last two weeks, which is CANN has more brand recognition in Illinois than it does in California, even though they're from California originally. So, I mean, these are all really interesting things.
Sid Patel
David, it's really people who are in for the long, you know, ours is very different category, like in very niche, like, in fact, really niche because you just want everything to do with cannabis drinks in this. So and we are also you know, as an organizer, we have to see our capabilities and our ecosystem, and our ecosystem is alcohol development. So the day you know, for me, it's very easy to get 1000 bartenders and sommeliers, if it was right, so we also have to consider our own ecosystems and how we are adding value to our wineries, dispensaries, other makers with cannabis industry.
Adriana Hemans
Speaking of regional, national international, looking at all these different state markets, and what it all means this, this puzzle piece, I want to again, turn it over to our audience and ask them for to weigh in on this question. See if you can guess the answer. And this is not just the cannabis industry, this is the tradeshow industry overall, what types of events have been attended or sponsored more by business professionals in the US from 2015 to 2021, regional, national or international?
David Paleschuck
We asked this question and look at this data, as we do every week in hopes of bridging the gap between the cannabis world and the real world. Taking a look at the things happening in other industries that we know will eventually happen or have been happening in the cannabis space. We like to look at these things in parallel, and we try to thread trends together to better understand things through data. And so, so in talking about regional versus national trade shows and events, we were curious what the other events, in US events, how does that play out on a regional, national or international scale?
Adriana Hemans
So we've got a mixed bag here, we've got a couple of these and you see less of a consensus on this one than the previous I'm seeing three A's, two B's and one C. So pretty mixed. While we give people a chance to weigh in, should we? Should we turn to a question here? Let me find this person's name. Sorry. The question is from Becky little branding is very fragmented. Is it currently profitable? Anyone care to weigh in on that one?
George Jage
I mean, it as far as branding, I mean, you know, if you're talking about a cannabis brand, I think any can licensed cannabis operation is probably one of the most difficult businesses you could run in the United States right now. I mean, you have massively punitive tax code and lack of access to safe banking, changing regulatory structures and everything else. But you know, I mean, as far as again, I mean, you know, brands, there's plenty of brands that are out there are profitable. And I think, you know, just depends on how they're set up and structured. But again, I think the long play and Sid mentioned, you know, people that are looking to play the long play CPG brands are going to be where the most wealth creation is going to happen in our industry.
David Paleschuck
We got a long, long way to go.
Adriana Hemans
Question that this is trade shows in general. Yeah. Not just cannabis.
David Paleschuck
Yes. See, any thoughts regional?
Sid Patel
Yeah, I was just going to say about the branding thing. I think, you know, right now, we are all forced by state laws to sort of just come up and deviate every you know, every state looks a little different because of some other things that we have to add. But again, you know, everyone knows what the future looks like, which is the great the bullish view to all this. So but once you know everything unifies, I think the ROI of branding and marketing will come in effect better. Yeah.
Adriana Hemans
Well, let's reveal the answer.
David Paleschuck
Let's do it.
Adriana Hemans
It's regional. And this stat is from Statista, a market research firm that covers all industries, and the stat is from 2023, that on average business professionals in the US attended or sponsored regional trade shows almost two times as much as national trade shows, would not have expected that in aggregate, maybe for cannabis, but not at aggregate. Surprising.
David Paleschuck
And so it's interesting to see that right, you know, we kind of came almost come almost full circle to just double check what's happening in the real world to say, well, you know, most trade shows or regional trade shows and, and that's how business is done. So. So it's interesting to see that to think about that, and maybe, and
George Jage
it comes down to me, you got to understand the purchasing the, you know, kind of behavior of the attendee, and they're going to look at events, and they're going to have to weigh in how much it's going to cost for them to travel there. Is it drivable? Do they have to spend three or four days out of the office? Are they flying all the way across the country for it? So yeah, I mean, people are always going to gravitate towards events that have a lower cost, you know, time and money for them to attend to. And certainly, when we've been out on the West Coast, we see a majority of our attendance from the West Coast. And I'm sure Sid sees the same and vice versa. What's really interesting is that, you know, I mean, you know, our York show, our second largest attended state is California right now.
David Paleschuck
Yep. Yeah. You know, so, so coming out of this, we know that both of you have shown coming up, would you share a little bit? I mean, George, you're, you're literally in the homestretch here three weeks away. Since you are sitting mid event where you are right now and preparing to come back to the US. George, would you take a minute and just give us an update on MJ Unpacked and what's happening in the next four weeks?
George Jage
We're actually five weeks away from the show as of yesterday, so you keep shortening that timeframe, and I got a lot to do. But listen, you know, when we started this event, and you know, we saw in New York is a really prime market, we had to book that venue before the hotel while the hotel was closed, and we had our event last year, certainly hoping that the market would be moving forward a little bit faster than it did. But coming into New York right now is the right show at the right time in the right place. There's not a lot of crowding on the convention center on the convention calendar geographically or chronologically. And the excitement around our event is been a little bit overwhelming. People are really enthusiastic about coming there. We have tons of the new life card license holders coming we have Axel Burnaby, who wrote the two parties of interests, legislate legislation, who's the number two person over the OCM speaking in the Venture Summit, we have Chris Alexander, the number one guy over the OCM speaking in our main conference program, we're flying out for legacy farmers from California to talk about regenerative farming. And, you know, it's just this is such an important time, and I know how hard it is for people's businesses right now. But if you're a retailer, and if you don't pick your head up and build your network, so that when you face a challenge, you have five or six people you know, and your friends with that can help you solve that problem. If you try to do it alone, this is this is too hard for anybody, in my opinion, you need to have a really strong network of peers to be able to succeed in this space.
David Paleschuck
Well said, Sid your mid-show right now over in Europe. But you're gearing up for your two shows here in the US. Do you want to talk about that for a moment?
Sid Patel
Sure. Thanks, David. So our dates (Cannabis Drinks Expo) are 27th of July in San Francisco and August one in Chicago, you know, so it's just over a period of four days back to back, you know, the idea is that brands can just be in one circuit and, you know, keep on the networking and marketing and meetings, you know, when they are doing their events, mode. I think this year we are really, every year, I mean, we've grown into making it more serious show meaning quality buyers, you know, as I said, like we really also were buyers, and investors. So it's really becoming a show where it's very clear that if you have anything to do with cannabis drinks, if you want to get started, or if you're looking for a co Packer or if you're looking for cannabis beverages, or if you're looking to invest in cannabis beverages, you know, this is the show, we also educate a lot. Our conference is one of our strong things. So you know, over the last two days, you know, we really go deep into the subject of cannabis beverages. So really talking about product formulations to you know, all other stuff. So I think what you can expect coming on that is really more of CO packers more MSOs and more of a push that we're trying to do to get other people other state operators at the shows we're actually going more national, you know, because of the state bottlenecks and opportunities. That's where the opportunity is right now finding co-packers.
David Paleschuck
It's interesting, the beverage industry is sort of built on, you know, the brand and the bottlers. Right. So it's, it's not much different, you know, in terms of how that's built, it's been so interesting to chat with both of you, and, you know, sort of getting a sense of what's going on both on the regional side, and, and even though it is fragmented. Honestly, it's people like you that are bringing us all together, you know, and really, you know, not only helping with the business of the business, but helping with the community of the business. And, George, to your point earlier, you know, our love for the plant brings us all together, and we can't lose sight of that.
George Jage
We can’t let the legacy people you know, not have a seat at the table either.
David Paleschuck
Agree. Awesome. And it's these conversations that keep it keep it alive and keep it real. So, George, thank you so much. Sid, thank you so much. We'll see you at your shows. And thank you for your time today. We really appreciate it. We really appreciate what you do.
Sid Patel
Super, thanks, Adriana. Thanks, David. Thanks, George. Nice to catch up. Thanks for everyone attending, I will just end with this, that this is a really positive industry, you know, people are so bullish and optimistic here. And I think that is the DNA of this industry will. We're seeing we're seeing proof in the pudding every week, every day, more things are opening up. So just matter of big players jumping in, and they'll jump in when the laws are written.
George Jage
And other than thank you to our hosts, David and Adriana and said it was great chatting with you today as well.
David Paleschuck
Right on. Thank you both. Stay tuned. There's more to come.
Adriana Hemans
Come back anytime. We didn't get a chance to answer a couple of the questions that our attendees dropped in. So Aaron, I'm sorry. But thank you for joining us and participating. It's been really fun.
David Paleschuck
Thank you, everybody. And we'll be back next week, March 30. I can't believe it's the end of March, but we'll be back next week. March 30th 11am PST / 2pm ESP, and we'll be with Heather Florio, CEO of Desert Wellness Inc. chatting about “CPG and Wellness: The Cannabis Connection”. Thank you so much for joining us. Don't forget to check out www.brandingbud.com. Cannabis’s best kept secret. Have a great week. We'll see you next week. Thank you so much. Bye!
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