What You Don't Know About NY Cannabis — Branding Bud Live Episode 1
THE SUMMARY
Interview with Steven Phan, Co-Founder of Come Back Daily, about the evolving NY cannabis landscape.
THE CO-HOSTS
Adriana Hemans, David Paleschuck
THE SPECIAL GUEST
Steven Phan
THE FULL TRANSCRIPT
David Paleschuck
Greetings and welcome to Episode #1 of Branding Bud Live. The weekly live stream that's 100% THC | 0% WTF. I'm David Paleschuck, founder of the Branding Bud Consulting Group, and author of "Branding Bud: The Commercialization of Cannabis", the first book on cannabis branding. I'm joined by my co-host, Adriana Hemans, a consumer insights and cannabis expert. Hi Adriana. How are you?
Adriana Hemans
Hi David! I'm great and super excited to be here doing our very first episode of Branding Bud Live. As David mentioned, every week, we bring on a really cool guest, and this week is definitely no exception. Our goal is to talk to people from across the cannabis ecosystem, to share their perspectives, share their journeys, talk to us about what's going on - from a "boots on the ground" perspective. So it'll be an interesting conversation on an ongoing basis. What's unique about this show, and what I like about it the most, is that we really lean into the interactivity. We want to hear from our audience. It's not just about me and David chatting with our guests. It's really about the community that we're building and bringing our industry into a new era. So feel free to drop a message in the chat, be it a question, a comment or an opinion.
David Paleschuck
Absolutely. We're really excited to have Steve here. Steve Phan is today's guest. And he has so much to say it's been around both coasts, related to cannabis for quite some time. So we're super excited. As Adriana mentioned, we're always talking to industry insiders. And Steve is one of them. And our first guest on today's episode of Branding Bud Live so with that said, Steve is the Co-founder of Come Back Daily which is New York City's number one CBD store and has really gone through quite an evolution over the course of the Pandemic and we're going to speaking with Steve about that. So why don't we bring out Steve and say hello! Hi Steve. Welcome to Branding Bud Live.
Steven Phan
Hi David and Adriana. Thank you for having me. This is really exciting. It's an honor to be on the first episode of Branding Bud Live. I'm excited and looking forward to a great conversation.
Adriana Hemans
We're so excited to have you. And just for folks in the audience who might not know, can you share with us a little bit about Come Back Daily and how you grew that brand?
Steven Phan
Yeah, sure. So Come Back Daily, the idea to go brick and mortar during a time when podcast we're talking about, you know, brick and mortar on the out for more traditional sectors. I was working at a manufacturing company, and I noticed, you know, while I was, you know, heading the sales department there, and working with clients remotely to help them get educated on CBD products and how they can integrate it with their daily lives. It was it was very, very apparent, you know, almost, I think it was like maybe 10 to 11 people, if I could remember that just would always end the conversation with like, can I come see you. And at that moment, I was working, you know, a nine to five job moonlighting for a CBD sales company, I mean, a CBD manufacturing company, hoping I could bring it up enough that I could step away. And that's when I realized, you know, that this that people wanted a store people wanted brick and mortar took me a second to write really take that leap, and go with it. But, you know, I would attribute it to the customer's telling me what I needed to hear, which was that they can Google this information, they can hear it through a live chat, but to meet someone face to face and have that intimate proximity is really beneficial and a value to them.
David Paleschuck
I'm sorry. So a big part of Come Back Daily is education, and really being there for the for the customers?
Steven Phan
Oh, totally. You know, that was something I noticed very early on being born and raised in the West Coast, right in San Francisco. When I would go to various community events or meetups, they call them back then I don't know where this website is now if it still exists, but there was that meetups website. And a lot of it was centered around education when I met the community there, you know, at this time, I was probably like 23 years old. People recognized it and pointed it out to me like, Oh, you, you seem to have a very pretty deep knowledge about cannabis. And I didn't realize it in California, because I just became infatuated with the plant. It's kind of part of the culture, right? In 2008, there was a wonders of cannabis event in Golden Gate Park, San Francisco, where I got to actually meet Ed Rosenthal, and in the late Jack Herer prior before he passed, and you know, I was like, so 16 At the time, like snuck into this park event, and got to really immerse myself in kind of what, where we're at now. And so I had a very different understanding of cannabis before coming to the East Coast. And that helped me really, like, lean into it much heavier here, because I got to learn about, you know, the disproportionate arrest rate, I got to learn about why we talk about black and brown, black and brown folks in this community and in this industry. And so it was a very different look on cannabis than I was used to in California. I think I was too young, to participate and first generation Vietnamese / Chinese. Yeah, those don't add up well to be advocating in the streets for cannabis. So it was it was interesting to see how that education helped me basically build everything that we're talking about today.
David Paleschuck
Because you mentioned it, there are Asians in cannabis meetups and associations specifically geared toward Asians in the industry. I think it shows how far we've come from where you were, to where we are now.
David Paleschuck
Oh, definitely. I heard it in San Francisco, and I saw it here. But, you know, aside, I would say the Asian community is, especially with the next generation, I think it's a combination of education and a change at times. We're raising our voices, right? But there's still a tough, tough stance against cannabis. And you saw that with Curaleaf when they opened in Forest Hills, people called me and they're like, hey, you know, there's like protesters out there, would you want to come talk and see if we can help them, you know, come to a common understanding of why this is good for the community and why they shouldn't fear it, you know, things like that. So it's very interesting to see different cultures and how they respond or take a position on the plant.
David Paleschuck
Let's introduce our first stat of the show. "What percentage of New Yorkers consume cannabis regularly?" The three options are: Option A is 1% to 3%. Option B is 8% to 10%. And option C is 25 to 27%. And before you guess, let me give you just a little bit of background on where we got this from, and why we're sharing this stat. So this came from a report that was commissioned by New York State. And they put this together as they were contemplating what would be the impact of recreationally legal cannabis in the state. So this is from 2018. And before you start asking yourself, why are David and Adriana sharing stats from 2018? I'll tell you why. Specifically, because this was a pivotal and impactful moment in the movement of cannabis legalization for New York State. Let's fast forward to the actual results they did. They did some research, they surveyed residents of New York to figure out what was going on. And then the recommendations that they came up with, there were some really important pieces in there. One of them was that they recognize that having legal cannabis would help to protect consumers, it would make the industry safer for them products would be safer for them. They also came to the conclusion that it would reduce opioid deaths. They also talked about the beneficial impact of tourism dollars purchasing cannabis, particularly international tourists. And then lastly, and this piece for me is the most interesting part, they acknowledged the intrinsic health benefits of cannabis. So really pivotal report, go ahead and take a guess throw your guests in the chat. Is it A. 1% to 3% B. 8% to 10%, or C 25% to 27%? And keep in mind, it's a little different than what we would see in a typical market research study where we're just looking at the trends and the movements of the industry. This was more for legislation and regulation purposes. So go ahead and take a guess. Thanks for guessing.
David Paleschuck
That's right. Steve, what are your thoughts?
Steven Phan
I think I think I go with C.
Adriana Hemans
Let's see if we were able to stump Steve on this one.
David Paleschuck
And the answer is … (drum roll).
Adriana Hemans
The answer is B, which I know is very surprising. But again, it's like a little bit different lens that this report was created from they looked at consumers who had consumed cannabis in the past 30 days. Whereas you know, I've come from the world of market research and data. And we tend to look at past 90 days as the indicator of what you would call like a current consumer. So this one was a little bit narrower in the focus. It was more looking at that the incidence of regular consumption. But yeah, I know, I've seen dozens of reports that say that the US market in general is divided into three segments: rejecters of cannabis about 30%, current consumers about 30%, and then the other third are people who are not current consumers, but are open to it. So I think when you're looking at a government funded report, it tends to be a little bit more conservative and its estimates. We just dropped the link in the chat, if anybody's curious to check that out. And for everybody, who guessed. Thank you.
David Paleschuck
Absolutely. And there's no doubt helped me to understand what the term "regularly" means. And that's why Adriana took a moment to call it out initially. Because we always talk about data. And we always talk about how data can be really deceiving if we don't talk through it, or define it in ways that are meaningful. So, thanks for calling that out as well. Steve that we're going to jump back into the interview. We have one more "Canna Quiz" coming up later. Let's jump back in.
David Paleschuck
Living in Seattle for 11 years, and returning home to New York, seeing all of the stores selling cannabis - from bodegas to dispensaries, to clubs - it's quite amazing. A walk in Washington Square Park, brings street vendors selling edibles, flower, pre-rolls, etc. So with all of these things going on - as a native New Yorker coming back home - it really struck me what I read from afar, is very different from reality on the streets on NYC. So would you talk us through what's it like to create a cannabis brand in New York, while a serious gray market exists, and the MSOs wait on the sidelines to get their directions? Tell us what the Zoo York is like now!
Steven Phan
Yeah, I mean, I'm sure you saw when you came over here, and we walked around a little bit just around the comeback daily store in the East Village, especially the Lower East Side area. It's, it's pretty rampant. You know, there's people, I think it's a mix of people just brazen, and also people truly just not understanding the laws. And it sounds crazy to hear but they didn't follow cannabis so closely that they know you have to go through this extensive licensing application process. They think, oh, now it's legal. I register like a normal business.
Steven Phan
Very early on someone posted I got my license, and it was a resale certificate. That's not a cannabis cultivating license. People still don't fully understand what's required of them to sell cannabis legally in NY State.
Steven Phan
I think when it comes to the branding side of cannabis right now, the easiest demographic that's being addressed is obviously the underground market. So they're following, you know, West Coast trends, they're following a lot of these notorious brands that have been legacy operators that became brands, and the owners themselves are going to different states, you know, doing drops, meeting people directly.
Steven Phan
That's why we opened Come Back Daily. You have to have that space to be able to affect the customer in a way that you want. And then they're kind of within your ecosystem now. And so it's, it's very interesting, you know, to talk about this subject, because even I, myself, if I'd have to admit, I'd rank myself as like a high THC consumer, right? Like, it's, I think it's good to start talking about the different types of users, and then kind of zoom out based and then look at the demographic and then look at who your brand is really trying to attract. Because, I mean, now that you're that we've gotten to know each other, you know, like, CBD is definitely kind of the opposite of what I always wanted to do, you know, all my efforts in the cannabis space, were to sell THC, take that legacy operation and make it into something that was legit, and to be able to tell mom and dad, right. And so I find myself as like the high THC user, like the lira categories, like, that's great, you know, some people wouldn't opt for something like that, because they're not an experienced user yet. But that is a whole part of the market that's kind of untapped. And I tried a lot to really think about what that market is, and how you speak to that market. Because it's not one that I understand deeply, Come Back Daily, did give me a big advantage to kind of shifting my mindset and our marketing strategy to, you know, not go to High Times, but go to baby shower events, or women's wellness events. And so it's a very, very black and white shift for me. But we did it, you know, we understood that it was going to be moms and aunts and grandparents coming in the store. And so we needed to make it some place that they felt welcome and felt safe to, you know, explore this new thing that they thought was going to get them high, which is in but it's going to help them and we're going through the whole routine, right? But yeah, I think right now, it's, you have to just choose the target that you want to reach and, and go for it. Because the space right now people think that everything that they see on Instagram or social media, these brands that are really, really active are the ones that are like winning. And maybe they are maybe they aren't, I won't speak on that. But some of the brands that you may see that aren't in that hype category, I'd say. Like, STIIIZY, for example, you know, best-selling vape in the whole market of California. And, you know, people I don't think a lot of people would consider it like a top shelf product. But it's at the right price point. They do volume, and they're a strong business and a strong brand.
Adriana Hemans
Steven, and I can't tell you how many times I've had this exact same conversation which is understandable right you create a product you love it you think that you're marketing to other people just like you and that's really not the case here. You are not your audience is a conversation we have a lot. It sounds like you have a good handle on that. And also, you're able to put yourself in the shoes of diverse types of consumers because of course we all know there's not just one type of cannabis consumer.
David Paleschuck
As we talk about brands and about cannabis consumers, I return to the "14 Cannabis Brand Archetypes" where we talk about the different types of consumers and why brands appeal or repel people. Many people say, "Cannabis sells itself." And the truth is that maybe it did back in the day. And if your dealer came with, brown or green flower, you were thrilled because you had a choice. But today, there's choice, there's selection, and there's convenience. And yes, we must assume the quality is of a certain level. So, it's really the brands and the outer layering. And the story behind the flower itself that's really speaking to the consumer. And I think that's where we need to step it up with brand, but we need to know who we're talking to. We just can't create brands.
Steven Phan
Sometimes I look back and I remind myself that I wasn't maybe fully accepting of CBD on the initial of it. But it really helped me gain an experience to cannabis that it sometimes it takes conversations like we're having now, for me to realize, but at what clicked in my head just now is that if you look at California, Washington and Colorado, you started small in a garage, and then scaled to be big business - but we’re always just competing at a state level.
Steven Phan
CBD blew up so fast, and you were up against everyone. You're up against unlimited budgets. I was just reading this article about a CEO. I don't know how they do this, but he got like millions of dollars, and never made anything. I don't know. I don't know how these people do it. But basically, I saw that and, and we experienced it. And I myself being on you know, our store was on Broadway and Canal Street. We had a different type of customer there. It was Tribeca, New York City. That's pretty affluent zip code. And so I really had to shift how I thought about branding. And there was an example that I always love. It was a CBD remedy was a black owned CBD brand. And they came in the store and they asked to put it on the comeback daily shelf. And it was almond oil, CBD tincture, which was different than most other people use. The almond oil is a little lighter on the digestive system. And so I told him, I said look like this is different. And I can actually I have space for it just based on how I curate my products. Like I don't want overlap, but like people are going to feel they're not going to feel what I feel right now. Because they don't know what I know. So you got to do something to the branding. So I feel better about it. Because I told them I said look like look at the stores around us. I might be new. But this is H&M, this is Soho, Broadway, you're seeing the biggest retailers. And so we had to help people understand that. And he became number two selling product in the store after the rebrand. Wow. Awesome.
David Paleschuck
Have you found that because CBD had such a quick rise, it also had a quick fall? And then as the interest in other cannabinoids became popular, it seemed like everybody has forgotten about CBD. Do you feel that?
Steven Phan
I definitely feel that. You know, when I when I opened Come Back Daily, I remember doing some speaking engagements or whatever, just commenting. And I said at the time that may CBD will go mainstream. And you know, kind of what the press was saying that everyone would start to understand, and they'd become as common as your Tylenol. And if that wasn't the case, once Delta8 came around, I saw it very quickly. I'll never forget, I think I've told you this story before maybe, but it was a 65 year old customer who came in and I didn't want to sell Delta8 because I had just shifted my whole marketing strategy to be like, this won't get you high. There's nothing here that'll get you high. And then now they got Delta8. And I was like no, we're not selling that. We're going to stick to our roots, and we're just going to own it. And then, a 65 year old customer comes in and she's like, Hey, I saw on Google, there's Delta8. And you can get high from it. And it's legal. And she like said it like, it's legal. And I was like, yes, it's definitely legal. I brought some in and she tried it, I let my staff try it. And it's very interesting, you know, I feel I would love to get a very deep scientific, you know, understanding of what, what the different cannabinoids are. But as far as these, these alternative cannabinoids, something special that I've noticed from it is that we're starting to have stepping stones to this world of cannabis. Right?
Steven Phan
You have CBD, which is like, I'm scared. I don't want to feel anything. I never take anything. Okay, let's start here. And then they start this and they're like, uh, you know, I see other people like really relaxed on pot, but it's just never been for me, I want to I want to try something like, not too strong. And that's been that kind of middle ground. Like I hear, I heard college students at a time that we're working for Come Back Daily, and we gave them samples tell us like, Oh, this is I'll never smoke pot. But this while I'm working and kind of helps me calm down, I can focus a little better. Like that was really cool to hear from that angle where I think my mom and dad all the time, right? We said earlier that I'm first generation and it's like, I hope that one day they will be open to using CBD or THC more regularly and less like, oh, no, I did it once it worked. But now I can't do it again, I'm going to get addicted. You know, that's the response. That's how it is right now. And so we'll see. We just got to keep fighting that fight at home, in the world with our communities, and finding the right way to explain it and get them to relate to it. And these baby steps are cool to me. I think, you know, everyone has their opinion on the isometrics, you know, process whether they're changing CBD to Delta8. And, you know, it's definitely not something I'm a fan of. But if it can be done properly, and the research shows that it's not harmful, then I don't see it as a bad thing.
Adriana Hemans
The point that you just made even of other beings stepping stones, I think is really important and worth reiterating again, that as we start to develop products that are either low dose, or have other cannabinoid combinations that maybe are not as intoxicating, as just what we're traditionally used to, there's a big opportunity for brands coming in, there's a big opportunity to like, awaken and engage with segments that may be now sitting in the rejecter. category. So going back to the conversation about brands, and of course, this is branding by live. So we're obsessed with that topic in general. I'm just curious to know from you, as someone who's like deeply entrenched in this New York market, and you're here like watching this explosive growth in in the gray market, the so called gray market, what is the, in your opinion, like, what is the potential of this? Do you think that its true what people say that New York could become the second largest market after California?
Steven Phan
I strongly believe that, you know, being here for the past 15 years now. You know, on one on one hand, it's the obvious, it's just the number of people, right? It's so many people, high rated tourism, one of the highest in the country. And so you combine that with just this, this this every other state that's not legal, or that that isn't legal yet. It's just has just been waiting like since the West Coast, you know, it's kind of started, it all started the wave. Everyone else has just been waiting. And so I think the combination of, you know, the black market, coming to other states and influencing and keeping people up to date on what's actually coming out in the California market is an advantage to actually start thinking about how you can be a market differentiator or the direction that you want to go as a brand.
David Paleschuck
And I'm curious when you say it's an advantage to Who are you talking to the New York brands that are sitting on the sidelines watching it or is it an advantage to the California brands that are already making it to New York and have the brand awareness. So when things kick off, they can just jump right into the market and sort of come from the gray market into the legal market and be recognized.
Steven Phan
Um, I think more for the New York brands to be honest, because I've seen an experience just, uh, you know, there's, there's really, very few places with this, like, East Coast pride. Like I'd say Boston is one of them, like New York is one of them. And I think it gives the advantage to New York brands, because people want to support local brands, you know, I know of some of these gray market speakeasies that really specialize in locally grown New York flower. And they've completely switched out their flower offerings to just locally grown New York flower. And the customers love it. They love to hear it. They love to hear from what region and sometimes it's right in their backyard, right in Queens, right in the Bronx. And that's, that's, that's special to them.
David Paleschuck
Right? Yeah, it's pretty incredible. You know, that, that, you know that home pride is what it's all about. And, you know, we've seen this in all sorts of things in the past, whether it's hip hop, and rap, or whether it's skateboard brands or streetwear brands, we've seen this, but it's interesting to see the West Coast brands moving to the east coast and coming in and getting recognition early on. You know, I in keeping just in keeping on time, we can, we can always talk about brands and keep on chatting about them. And there have been so many comments as well. You know, and I see, by the way, I just want to call this out Brett Puffenbarger who is an amazing person and a great resource. He just called out something that, that not only you should look at might answer some of your questions. Thank you for that. Brett. Just in keeping with the time, we do have another candidate quiz question. And I want to jump to that because we got about 10 minutes left.
David Paleschuck
So let's jump to the next kind of quiz question. We're in cannabis. We're sorry, where is cannabis allowed to be consumed in New York? A on the High Line. And for those of you that don't know, there really is something called the Highline. And it's New York City's number one free attraction in Manhattan. B Washington Square Park, and who hasn't heard about the consumption in Washington Square Park, or see anywhere tobacco is permitted. So I see that we have a C here, a couple of Cs. So I'm curious.
Adriana Hemans
This one was a little easier than the first one, I think.
Steven Phan
Drumroll, please.
David Paleschuck
Oh, obviously, this was this was too easy. Thank you. Thank you for the giggle. Andrew, I appreciate that. Sure, Niagara Falls, you go! And the answer is (drumroll). The answer is people can leave people they're legally allowed to smoke in public wherever smoking tobacco is legal. So if you smoke tobacco there, you can smoke cannabis there, of course, always consume responsibly. So that's it.
David Paleschuck
You know, it's interesting what's going on in New York, and to get a sense of, what's real, and what's perceived. One of the things people experiencing in New York versus the things that people are hearing about taking place in New York, it's, it's always really interesting.
David Paleschuck
Steve, the one thing I'd like to ask you is, "Who or what do you consider to be the best kept secret in cannabis?" Is there any person or resource perhaps, or anything that you might just sort of call out and point our listeners to that might help them better understand the current state of cannabis?
Steven Phan
Yeah, I think for one, if you're visiting New York, I would put at the top of my list right now, as far as local New York roots goes, the pizza pusher. He has full on pizza parlor with infused pizza and few sodas. He's run it for a very long time. Then for catching up on New York, "On the Revel" is an amazing resource. They're an organization that puts together events, brings speakers, and offers different tools to further themselves in their business endeavors. A really great resource.
Steven Phan
And to call out too, HighNY, an events company throwing the best cannabis events NYC has to offer.
Adriana Hemans
That's so cool. Thank you for giving us a little insider's look for folks who are not as familiar with the New York scene myself included in that. And where can people find you get a hold of you learn more about you, Steven.
Steven Phan
You can find me on LinkedIn. Thank you. Shout out to LinkedIn for hosting us today hosting our stream. My Instagram is phan_man. You can find Come Back Daily in the East Village. 516 East 11th Street. We're also online. We have a white label line, as well as third party products.
David Paleschuck
Perfect. Awesome. We are so thrilled to have had you here today. Steve, you know, we could chat forever. Especially when it comes to cannabis and branding. And the three of us can go forever.
Steven Phan
Thank you. Thank you, everyone for watching and tuning in and participating. This was great. And if you come to New York, come visit us.
David Paleschuck
That's awesome. We'll send them your way, Steve. All right. Thank you for joining us today. We appreciate it.
Steven Phan
Thank you for having me.
David Paleschuck
That said, we thank Stephen for joining us today. We're really excited. We have the most amazing lineup of people scheduled to join us. So please come back every week.
David Paleschuck
A quick shout out to Marino PR for doing a great job and not only with us, but with Steve as well. We are excited for next week's episode #2. Our guest is Dre Newman. He is the chief creative officer at Jushi. And we will be talking about the "Convergence of Creativity, Cannabis, and Commerce". Thank you everybody for joining us. We really appreciate it. We love to bring you the best of the best in the cannabis space and try to make sense out of the confusion. Thank you to our guest, Steve Phan. Thank you, Adriana. Thank you to our team behind the scenes. And most importantly, thank you to our listening audience. We really appreciate that.
Adriana Hemans
Please follow our page for a chance to win an autographed copy of David's bestselling book, “Branding Bud: The Commercialization of Cannabis”. If you follow us between now and November 27th (and you reside in the US) you're entered to win. Thanks, everybody. Have a great rest of your day. Bye!
David Paleschuck
Thanks you, Steve. Well, that’s our show for today. And we'll be back again next Thursday at 11am PST / 2pm EST. Thank you so much for joining us. If you missed us, watch us on LinkedIn, or on our Branding Bud Live YouTube channel (https://www.youtube.com/@brandingbudlive). Find out more about our consulting services at (https://www.brandingbud.com). Thank you everybody! We'll see you next week.
