Cannabis Public Relations Or Cannabis Crisis Management? - Branding Bud Live Episode 38

August 3, 2023 David Paleschuck, MBA, CLS | Author & Cannabis Brand Expert

THE SUMMARY

The cannabis industry is experiencing turbulent times, with major players facing unprecedented challenges and controversies. From high-profile lawsuits to unexpected terminations, the industry is imploding, and we're diving into the storm! Tune in to this week’s episode of Branding Bud Live "Cannabis PR or Cannabis Crisis Management" as co-hosts David Paleschuck and Adriana Hemans chat with Jordan Isenstadt, SVP of Marino, a New York-based PR firm to better understand the complexities and challenges plaguing the cannabis industry.

THE CO-HOSTS

David Paleschuck, Adriana Hemans

THE SPECIAL GUEST

Jordan Isenstadt, Senior Vice President, Marino

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, Director of Marketing at Green Meadows and my BCF (Best Cannabis Friend). 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

We’re here to build community, educate and entertain … so let’s jump into today’s show, "Cannabis PR or Cannabis Crisis Management". Today, we’ll be chatting with Jordan Isenstadt, SVP of Marino, a New York-based PR firm to better understand the complexities and challenges plaguing the cannabis industry. Some of the topics we’ll cover are:

What are the goals & objectives of public relations in cannabis?
How closely tied are public relations and crisis management?
What are some of the precautions cannabis companies can take to avoid a crisis?

I’m super excited to chat with Jordan today.

ADRIANA HEMANS

Me too!

DAVID PALESCHUCK

Let’s welcome, Jordan Isenstadt.

JORDAN ISENSTADT

Hi guys. How are you?

ADRIANA HEMANS

We’re great and excited about you being our guest. Tell us about yourself, Jordan. What are you passionate about?

JORDAN ISENSTADT

Absolutely. Well, look, it's an honor and a pleasure to be sitting here with both of you today, you know, big fan of the show, and just super excited to have the chance to talk about cannabis PR. The brief background on me is that I started my career in New York state government. I worked for a couple of New York State Senators and communications roles. I went to Edelman for a couple years and sort of learned what it's like to do communications at an agency. I went back to government, I worked for two governors, both of whom dealt with some significant crises. gentleman by the name of Eliot Spitzer and another one, David Paterson for all you New Yorkers out there. And then I ran a nonprofit called the Association for a better in New York and was a great experience learns a lot about the business world and then join Marino. It's a full service strategic communications firm joined there in 2016. And about six years ago, I came up with this crazy idea to start a cannabis PR practice. And much of the credit of agency leadership, John and Frank Marino, they gave me the runway to get educated about this crazy industry. I didn't know what an MSO was, I didn't know what a terpene was, got myself all educated. And since that time, we've evolved into one of the premier cannabis PR practices in the nation, we are based in New York. So we have followed New York's kind of nascent program very, very closely. And we've been very involved locally in the in the rollout of the program. But that being said, we've worked with companies nationally, we play stories all across the country, in nearly every legal market, we work with cannabis operators, of all shapes and sizes, as well as up and down the supply chain. We work with software brands and hardware brands, cannabis consultants, from lawyers, to recruiters to design build firms. So, you know, we've kind of had a great experience kind of getting to really know this crazy industry. And I never thought I would be able to combine my personal passion for the plant with my professional life. So it's crazy. I can't believe I’m here, but here I am.

DAVID PALESCHUCK

Let’s start off with the basics, What are the goals & objectives of public relations in cannabis?

JORDAN ISENSTADT

PR, obviously stands for public relations, and the very kind of basic goal of PR is to make the public or stakeholders look favorably, you know, upon you and favorably upon the company that we're representing. But the fact is, is that, you know, in the cannabis industry, we have, you know, these really unique considerations, you know, just to the unique and specific nature of the cannabis market. So, you know, as your listeners know, you know, unlike any other industry, we're dealing with federal prohibition, we're dealing with a patchwork quilt of, you know, different laws from state to state. So this means that, you know, advertising and marketing options are much more limited for cannabis operators and brands. So just makes it really more challenging to have like a national strategy and to get your message out there in the same way that you know, Nestle can or tide or you know, whatever the case may be. So, that's why, you know, we argue this obviously, as a PR firm that you know, having a strong cannabis PR strategy becomes super important. Another really unique facet of cannabis PR is what we call the education gap. And you know, the need to destigmatize cannabis for cannabis consumers. So public relations in the in the cannabis industry often focuses on educating the public about the benefits of Responsible consumption. And that just includes, you know, accurate information about medicinal and recreational benefits of cannabis and just dispelling myths and stigmas. And, in fact, the truth is, and we joke about this at the office a lot is that often we're actually educating, you know, the media themselves, because if we're not talking to, you know, trade media for talking to mainstream media, you know, they often really don't know a lot about the industry, and they don't really understand how complicated layered and highly regulated, it is. But, you know, back to the sort of the initial question, the overarching sort of aspects of cannabis PR, sort of, like fall into a bunch of buckets, I suppose. And so there's, you know, reputation management that's, you know, maintaining and promoting like a positive image of the company as a whole. We do brand building, which is, you know, creating compelling brand stories on TV and digital news, whatever the case may be, and the establishing, you know, brands messaging, engaging with the community, you know, community issues are, you know, you know, very significant in the, in the cannabis space and engaging with local communities is super vital. So PR often helps kind of like foster channels of communication with, you know, with local communities. You know, we've done a lot of work on sort of the advocacy side and the public policy side, where, you know, certain clients have a, you know, a legislative goal of some kinds. Another bucket that, you know, you know, many PR firms work on with their cannabis clients has investor relations, making sure that the right messages are getting to the investors, and just maintaining like, you know, open, transparent communications with the investors thought leadership is a big bucket for us at Marino, we're, you know, often kind of util, you know, we're doing what's called newsjacking. So we're essentially, you know, getting our clients in the news based on their expertise on certain subjects. So if there's an article about safe banking, or interstate commerce, or, you know, cannabis licensing in New York, or Vermont, or you know, Maryland, we have experts who can talk about all of that. And then finally, of course, there's the crisis management bucket, which I know we're going to get into later. So I won't even really address it too much now.

ADRIANA HEMANS

Assuming there are different PR initiatives, what strategies are employed when building brand awareness or lobbying for a cause or confronting a crisis? Are they different?

JORDAN ISENSTADT

Yeah, totally. And yeah, they're, they're, they're different. When, you know, when we're doing brands, awareness, it's different when you know, we're doing lobbying for a cause or confronting a crisis. So, you know, when it's when we're talking about building brands, awareness, you know, the initiative is really to promote the brand's promote its values, its products, its services. So strategies would include, you know, very traditional kind of media relations, social media campaigns, partnerships with influencers, doing events, thought leadership. So it's kind of the standard kind of everyday tactics, I guess, the idea is really to increase visibility, and just, you know, get people to recognize the brands, when we're lobbying for a cause. And being more, you know, on the kind of advocacy side of, you know, regulations or social issues, you know, that's falls more into what we call kind of public affairs, where we're trying to, like, influence a specific group of the public or decision makers. So there's kind of public affairs, there's government relations, grassroots outreach, building coalitions, bringing different groups together. And the objective there is, again, to like, influence public opinion where, you know, gain support for a cause of sometimes. And then, in a crisis, that's when it's all about, you know, protecting the client and repairing. So, you know, strategies will include, you know, crisis communications, which I know, we're going to get into a bit more kind of granular later. But, you know, crisis communications is really all about, you know, you know, putting out timely narratives, timely statements, and messaging to the media, doing media briefings, monitoring, social media, you know, monitoring what the conversation is, and just, you know, sort of trying to be open and transparent. And at the end of the day, with crisis communications, we're trying to address whatever the issue is, try to resolve it if we can provide kind of accurate information, and hopefully, kind of move past it. So you know, each bucket I often call them buckets sort of have like different tactics involved at the end of the day.

DAVID PALESCHUCK

As we do every week, let’s jump into our first audience participation. Here we go …

What % of consumers will either boycott or buy from a brand based solely on their stance on social or political issues?

A.  23%
B.  35%
C.  53%
D.  64%

Audience. It's your chance to shine! That's right. And thank you to Edelman for this stat.

JORDAN ISENSTADT

That’s a tough one. I’m curious to see the answer.

DAVID PALESCHUCK

The answer is D. 64% of consumers will either boycott or buy from a brand based solely on their social or political issues stance.

JORDAN ISENSTADT

Wow. That’s a high percentage. Yet, it doesn’t surprise me.

ADRIANA HEMANS

What should cannabis firms look for when hiring a PR firm? Are there any clear metrics or benchmarks brand owners or potential clients should take into consideration?

JORDAN ISENSTADT

Yeah, absolutely. I mean, the, you know, you have to figure out who your target audience is, you have to figure out, you know, how you're going to get the message out there. And, you know, while some of the, you know, it's not it's not always like, you know, we say it's like It's not rocket science necessarily like the essentially the tactics are the same, but a lot of it has to do with timing. How do you put the messages out there? And, you know, who do you put the messages out to and what That's the kind of what's the sequence? What's the overall kind of mix at the end of the day? So, you know, it's, it's, there's a lot of kind of moving parts to it. And that's why, you know, working with a PR firm or having an in house PR team is pretty essential, because so many people, you know, kind of they just think like PR is just, you know, you call a reporter, and you get them to write a story. It's really much more complicated than that.

One of the secret sauces at Marino, but I think that happens to work for us very well in the cannabis space is the kind of the diversity of the different practice areas. So, you know, I think when you're, I think some people, when they're looking for a PR firm, they get caught in, you know, kind of wanting to work with a firm that is a specialist, you know, in a specific, you know, subject matter area. So, they want a, a real estate firm, a cannabis firm, whatever the case may be, and I would argue that you want to work with a firm that definitely has specialists, but that also has generalists, you need to be able to work with a wide swath of people with, with different expertise. And again, at Marino, one of the things that I really love that we can do is that cannabis is it, there's so many different types of projects, right, so if I'm doing something that is more consumer facing, I can pull in someone from the consumer team, if I'm doing something that's more public affairs, I can pull in something, someone from the public affairs team, whereas and that's what we call sort of, like, you know, hybrid teams. So, it just helps from, you know, some PR firms being a little kind of one note, because of sort of subject matter expertise. So, I think you want to look with a firm that has a diversity of expertise obviously cannabis clients also want to work with a firm that, you know, has a track record of success. So you always want to one of the first things that I would ask a firm, if I was interviewing them would be to see some case studies, get to talk to a few of their clients and sort of see if there's enthusiasm from their clients, because a good agency that has clients who really love them will be happy to speak to others and refer them. And at the end of the day, though, it is really all about chemistry. I think it really, you can't really work with a PR firm, if you don't pass the chemistry tests, not every PR firm is going to be the right fit. So before, you know, engaging, you want to make sure that you get along well, it's not unusual to ask to have a meeting with the whole firm, rather, with the whole team, not the whole firm, the whole team in advance of it engaging just to make sure that like the chemistry is there. And the reason I think that that's so important is PR is all about partnership. And it's all about, you know, the PR firm should essentially like have a like a quote unquote, seat at the table. And you want it to be people that enjoy working with. So yeah, if I was looking for a firm, I want them to be sort of have that have that diversity, pass the chemistry test have a track record of success. Those are I think are that's kind of three most important things.

DAVID PALESCHUCK

Let’s flip it around for a minute. What makes the perfect cannabis PR client? What do you look for when seeking new cannabis clients?

JORDAN ISENSTADT

I love this question so much. Thank you. So yeah, I mean, it's some similar themes. I mean, PR is a partnership. And so we're only as good as kind of what we get from the client, you know, we don't have like a magic wand, who can't read minds, PR requires investment of money, obviously, but also requires an investment of time. And that's been one thing that I’ve seen over and over again, is that there's just this expectation that we're going to come in and all this press is going to show up, and, you know, no, it really actually takes an investment of time from the client, we need to oftentimes we need a spokesperson who's prepared to just kind of drop everything to handle some of these, you know, breaking news, tight deadlines on the media opportunities. One of the challenges that we see when we work in the in the cannabis industry, especially as compared to some of our other clients is that everyone's moving a mile a minute, they're really just too busy to focus on PR. And, you know, it's PR operatives work best. Again, like I said, when we have a seat at the table, and we're willing to put in the time that we need to make sure that the client really is willing to put in the time. The other thing too, that makes a great client is a great story. At the end of the day, PR is essentially about storytelling. And there are so many great stories in the cannabis industry, we've had the opportunity to tell many of them are always on the lookout for sort of highly marketable, interesting stories, but at all, but really the best clients have the best story, and they are willing to invest the time to make it happen.

ADRIANA HEMANS

Does cannabis PR differ from CPG and other PR segments?

JORDAN ISENSTADT

Absolutely. CPG, obviously, has that more sort of consumer facing, it's actually interesting, my team that does the cannabis work, we also work in the higher education space, we work in the organized labor space, and clean energy. So we deal with kind of very different types of industries, and each area is incredibly different. I mean, I think more than anything, the biggest, the biggest thing in cannabis is just the unique kind of regulatory landscape there's just different laws and restrictions, you know, depending on where you are, the attitudes towards cannabis are different, you know, depending on where you're pitching, I think, cannabis, while there's a national PR piece, that's very important. I think the local and regional aspect is so important, and it gets sort of a little overlooked. So, in cannabis, I think we're often kind of going hyperlocal, and different localities and areas have very different, you know, attitudes towards cannabis, obviously, there's a lot of stigma and whatnot. You know, and the last thing I'll also add is that, you know, one of the things that really makes cannabis different from some of those other fields, whether it's CPG, or the ones that I mentioned, is that cannabis is having a moment, we're in sort of a proverbial moment right now, where like, there's such robust interest from media, as stores are opening, things are happening. It's very exciting. So there is sort of that unique opportunity and excitement to play off of that. And there's been no other industry that I've worked in that, that that has that consideration.

DAVID PALESCHUCK

One of the difficult things about PR is, is that it’s impossible to control the spin. If you recall last year, MariMed, an edibles manufacturer in Massachusetts made an 850 lb. pot brownie for National Brownie Day. It was covered/mocked on SNL, Jimmy Fallon, Jimmy Kimmel, and Steven Colbert. That said, the brand behind the stunt received little to no play. This happened again recently with the same company during a recent faux Boston Tea Party stunt throwing cannabis overboard into Boston Harbor. The concept was to bring attention to the 280E tax law. How do you make sure your stunt doesn’t overshadow your message or brand?

JORDAN ISENSTADT

Yeah, so it's really interesting question. I remember those stunts, and I know, some of the people who are involved in the rollout. Look, there's, there's always a risk, I suppose, when you when you do a stunt, especially if you do a really great stunt, you get a lot of eyeballs. And in particular, you get a lot of new eyeballs who just don't really understand the nuance of the of the issues. I mean, I, personally, and you know, at Marina, we don't, we don't do too, too many stunts, because of that, of that risk. I mean, what I would say is that if you're, if you're considering, you know, doing some kind of a stunt, you really need to make sure that the, that the stunt aligns with the, with the brand. And that you have to measure sort of the sensitivity to new audiences. What's the new audience going to think about the gigantic brownie, is it are they going to say, like, oh, this, you know, this is about taxation, or are they just going to think that it's about stoners, and I'm sure the team over there weighed the cost benefit analysis and said what, let's, let's do it, we'll still, we're still going to have some fun and get some, some good press out of it. I do think that having a having a PR firm to, to assist with the stunt again, sort of having that external team, that external voice they can help sort of assess the risk. And like I said, sort of like the cost benefit analysis of doing a stunt like this. It's important to be consistent, obviously. And, I think that that really is the key question that has to be asked in any of these circumstances is, is, does the stunt align with the brand's images and messaging? Or will there be a disconnect? And if there is a disconnect? Is that okay? And is that all right with the with the client? It's a tough call, because you also never know how this stuff's going to go. Sometimes you try stuff, you think you're going to get so much attention, and then you get none. And then sometimes you do something like the brownie, and it takes off in a way that you never thought it would.

ADRIANA HEMANS

Let’s bridge the gap between public relations and crisis management. How connected are the two and do PR firms often jump in when a crisis occurs?

JORDAN ISENSTADT

Super closely connected, almost every scope of work that we put in front of a client has some kind of a crisis communication clause, it's almost taken for granted that they're there, they're, can and, you know, possibly will be, you know, some kind of a crisis. And so, we sort of, we look at crisis communication as sort of a subset of sub sector, I guess, of, of public relations. And, obviously, it helps deal with threats and negative situations that may harm an organization. Oftentimes, what ends up happening in a in a crisis is the PR firm can kind of almost play like a quarterback role, sort of a central role, helping to, you know, align messaging, make sure that it's transparent messaging, coordinate media responses and sort of address any concerns with the public. I've definitely been involved in a few crisis situations. Some you know, about many you don't know about and that's sort of the key to crisis communications is you want to make sure that no one knows about them, or as few people know about them as possible. You know, in many of those situations, We've established some kind of a war room whether that's in person or virtual to provide real time guidance and I mean, on some of those war room calls or literally all just sitting in a room doing our work, and when something comes out, we can all just hop in and have that sort of real time discussion, and sort of be the kind of play that that quarterback role. So, yeah, the two, the two areas are very closely intertwined. And often PR firms are the are the first responders when a crisis occurs.

DAVID PALESCHUCK

Unfortunately, there’s been a lot of “crises” in the cannabis space recently – and they come in all shapes and sizes. It feels like the industry is imploding. Just to mention a few:

Cookies is caught up in multiple lawsuits by investors & partners
A recent death of an employee at Trulieve for “occupational asthma”
Again, Trulieve CFO quits after 10 days at job. The previous CFO lasted 3 only months
Herbl, a CA distributor goes under, yet still faces many “breach of contract” lawsuits
Glass House & Catalyst suing each other for defamation
The deal between Cresco, Columbia Care and Sean “Diddy” Combs is terminated
Leafly sued by hip-hop photographer for using photos of Snoop & Tupac w/o permission
Lastly, Allure Magazine stated that the CBD beauty market is “over”

What are the things – or a few of them – that cannabis companies can do in advance to protect themselves from the varying types of crises – and how can a PR firm help them before, during, and after a crisis?

JORDAN ISENSTADT

That's a sobering list! Thanks for Thanks for reading that example as well. It's a lot, it's a lot. But, yeah, I mean, in the, in the face of all these crises companies can and should take proactive steps to, you know, protect themselves and their and their reputation. Obviously, cannabis is a highly regulated industry with, you know, a lot of compliance standards. So, one of the first things that I do with clients is, I also have, like my own sort of, like, chemistry sniff test kind of thing, like, are they legit? Are they doing everything right here? So, being compliant is obviously the first thing that is important. So the best way to avoid a crisis is not to allow it to happen, especially if it's something that's sort of predictable. But the other thing that you can do in advance of a crisis, or in advance of a potential crisis, is to have that external PR firm have that partner there who is there, in case a crisis happens. And so, you know, one of the things that a PR firm might do, in the absence of a crisis is to create some kind of a crisis playbook. And that, you know, there are often different sections about different potential crises, what some holding statements would be some media lists of, you know, who we would send out messages to. So that's one way to be prepared. Look, the truth is, is that there's only so much you can do to be prepared for a crisis, because you can do all that planning, but still a crisis may occur. So, when the crisis does occur, it's the PR firm it's PR firms role to provide real time counsel, craft messaging, avoid misinformation work on media response and help with social media conversations and just ensure you know, consistency. I mentioned the war room earlier that's something that a PR firm might do. I had one situation that was non cannabis related, but I essentially had to spend about 72 hours on site with a client during a police investigation and you know, during At that time, I had to manage hordes of media, we're talking like the vans and the satellites and the whole thing like in the movies, but because it was an active police investigation, we actually really couldn't say anything. And that is something that they didn't really know. And so I had to explain that to them. Like there is an active police investigation, we cannot comment on the situation at all. So having outside counsel during a crisis is very important. After a crisis, that's the rebuilding phase, that's when a PR firm would help kind of rebuild and regain trust and build back the reputation. So those are some things that a PR firm would do sort of before, during and after. But you know, the best thing you can do is really, really try to avoid that crisis in the first place.

ADRIANA HEMANS

Let’s jump into our second audience participation. Shall we?

Which US demographic grew in year over year cannabis sales from 2021 to 2022?

A. Gen Z

B. Millennials

C. Gen X

D. All of the above

Audience: It’s your turn to shine! OK, let’s reveal the answer.

The answer is C. Gen Z

In fact, NONE of the other US demographic groups grew in sales. Millennials, Gen X, and Baby Boomers all declined in sales!

JORDAN ISENSTADT

Gen Z crushing it.

DAVID PALESCHUCK

When messaging different stakeholders during a crisis, how important is it to deliver different, nuanced messages to different stakeholder groups?

JORDAN ISENSTADT

Honestly, it's probably one of the most important things. I mean, one of the first things that that, you know, we do is talk about, you know, who's our target audience or our target audience is, and how do we sort of segment messages to those different targets, because, you know, different audiences have different interests, concerns, and, you know, level of sort of knowledge and involvement with the, with the company. So messages to employees, for instance, you know, in a crisis would focus on reassurance and, you know, transparency and things like that messages to, you know, investors would be more about, you know, kind of safeguarding their investment and sort of what's going on customers may want, you know, sort of clear information on, you know, product safety and things like that. So, yeah, I mean, each customized messaging is very important and very different audience and when you're communicating with different stakeholder jurors during a crisis, you really just want to maintain a positive reputation. And so that requires different segments and messaging.

DAVID PALESCHUCK

Thanks, Jordan. That was fantastic. We thank you for what you do and the value you bring to the industry. As always, that was the fastest 45 minutes of my week!

JORDAN ISENSTADT

Thank you both David and Adriana! I really enjoyed being a guest, and seeing what the “other side” looks like. You guys are total pros. Thank you, again!

ADRIANA HEMANS

Thank you, Jordan!

DAVID PALESCHUCK

Well, we've got an amazing show coming up next week. Our guest is Scott Jennings, CEO and Founder of Pantry Co., a cannabis and adaptogen edibles company. We'll be chatting about “Cannabis And Adaptogens: New Science” – which seems a little too often these days.

ADRIANA HEMANS

We just dropped a link in the chat for next week’s episode. 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. Please check us out there if you've missed any of our previous episodes.

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DAVID PALESCHUCK

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Thank you everybody!

ADRIANA HEMANS

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