AUSTIN—As SXSW comes to an end, there was no shortage of sensory overload, elaborate visions of the future and highly talented people from all disciplines displaying their best creations. The 10-day long convention has come a long way from its humble roots in 1987.
What was originally intended as a means to gain exposure to underrepresented local artists, musicians and entertainers has grown in to a wildly popular, world-class festival covering everything from music and film to blockchain and food safety. During my time here, I learned about how virtual reality may completely deprecate our idea of identity; blockchain will be used to track fruit and salmonella; cats can have their ancestry genetically mapped out; and that cannabusiness is a hot topic in a state that ironically still mostly criminalizes the green plant.
Here are five big takeaways from my four days at SXSW:
Shedding stigma in cannabis
Elizabeth Hogan of Denver-based GCH and Rama Mayo of Los Angeles-based Green Street Agency spoke about how their respective marketing agencies are increasingly working with established brands and likenesses in cannabis-themed advertising campaigns.
One of Hogan’s partnerships include working with famous musician Willie Nelson to develop Willie’s Reserve, a line of branded cannabis products launched in 2015 and sold in brick-and-mortar stores. Mayo’s experience has involved working with rapper 2 Chainz to develop the Gas Cannabis Company, which also sells branded products under the rapper’s persona.
While Hogan and Mayo acknowledged their work is still a long way from having widespread, mainstream appeal given current legality issues and public sentiment issues toward the plant, it nonetheless illustrates the cannabis industry’s shift toward using traditional business strategies, such as brand and celebrity partnerships. The greater idea is that if laws continue to progress in the US, it’s possible that established, non-cannabis related companies may strike partnerships with this industry.
This doesn’t necessarily mean that Cracker Jacks will start including cannabis in every box any time soon. But it does suggest that the industry is rapidly preparing a solid business plan in anticipation of full, unrestricted legalization across the country, and reaching the unindoctrinated masses is a high priority.
In a separate session, Gunner Winston, CEO of Dosist, spoke regarding the long-term prospects for this industry. Launched in 2016, his company focuses on providing cannabis in specific doses targeted toward health ailments, such as anxiety and sleep disorders. Winston claims you could use Dosist’s products “instead of Ambien or Percocet, as we are giving you a choice for something natural.”
Winston’s confidence in future maturity and mainstream appeal of the industry also centered around building durable brands that shatter stigma, reaching diverse groups of people from all backgrounds as a result. “In the future there will be brands built around cannabis,” he said. “When you think about Starbucks, it was not about providing coffee. It was about generating a sense of community. Nike wasn’t about selling shoes; it was about enabling people to be active. This is the promise of cannabis beyond toxicity and recreation—to provide better health naturally.”
However, apart from the implementation of tried-and-true business practices to the evolving industry, the key takeaway for any venture capital investor looking to enter the space is to have a lot of patience, both before and after funds are committed.
“The worst investor to me is the one that thinks we want to monetize this in one year,” Winston said. “I often only start to work with investors many months and quarters out because relationships are good long-term.”
On a personal level, I started to respect the example of Dr. Sanjay Gupta’s conversion from being anti-cannabis to pro-cannabis, which Camille Lim, project manager at Leafly, taught me about in detail at SXSW. I previously had stereotypical images of Snoop Doggmusic videos come to mind when I thought about the phrase “marijuana,” which I learned is shunned when speaking professionally of the industry.
My key takeaway was the reality, not stereotypes, of cannabis potentially provides a promising, mainstream industry from which venture capital funds may increasingly sink funding. Legalization and public sentiment remain issues, though this isn’t stopping companies from building a roadmap on the assumption that stigma will be shattered sooner rather than later.
Published: March 17, 2019
Founder & Interim Editor of L.A. Cannabis News