This week, we are joined by Dave Gibson, investor, cannabis industry consultant, and recent founder of CannCrest, a UK based company who own multiple brands including the largest database of cannabis consumers in the UK and a CBD company, focusing on FMCG. Together, we speak about current trends in the USA, the negatives of such a fast growing market, and the limitations of marketing within the industry.
Dave has a MSc from the London School of Economics in Management, and has 18 years experience restructuring companies and improving operations, most recently working at Adidas HQ, where we took e-commerce revenue from $1-$4Billion in 4 years.
Dave draws comparisons to the baby milk industry when it comes to marketing laws, cannabis and baby milk supplements have a lot in common when it comes to health claims - neither can make statements about being able to cure certain ailments or make you healthier.
Dave got involved within the cannabis space when his childhood friends from Alberta, Canada decided to open up a number of dispensaries within the province. He became involved as he recognised this as a once in a lifetime opportunity. The business they created together has now been sold for $110,000000.
The valuations of Canadian cannabis companies are ‘what the market pays for them,’ says Dave. Investors are beginning to take a more thorough approach to vetting companies, looking for operational excellence and compliance before they invest.
There is no room to be grey or black in this industry - companies should aim to be whiter than white, extra compliant, and lead by example in order to fight the stigma surrounding this industry.
The industry is growing so rapidly, people are going to extraordinary lengths to gain a stake in the market by the purchasing of overpriced items across many aspects of the market including goods, manufacturing, and growing facilities.
CBD has surpassed previously popular search terms such as ‘kombucha’, and currently sits just below yoga in terms of popularity.
Trends in the USA include:
Increased popularity of Ingestibles and drinks, moving away from smoking to vaping, the rise of CBD, as it has become federally legal across all states, an increased level of operational maturity and a focus on customer centricity - having a deep understanding of what the customer wants from their experience
Dave predicts that many things will develop in the same way in which they have done in North America, although the market is at a different stage.
70% of internet advertising is through Google and Facebook, which leaves only 30% available for use by the cannabis market. The cost of acquiring a customer this way is incredibly expensive as you are unable to drive traffic from ads.
Once eBay and Amazon open up their marketplaces, they will dominate and change the landscape as we know it.
Cannabis is a brand new consumer based market which doesn’t happen in every generation 04:20
There are still characters and individuals in our cannabis industry that derive from the grey, and black market. There is going to be bad, we need to go through a process and work to get the industry white. 09:30
If the government says ‘do 1 test on your CBD’, do two tests. 10:04
In the UK, we are quite a way away from the legalisation of THC. 15:15
When Google and Facebook open their doors to online advertising [from the cannabis industry] is it going to be a whole other ball game’ 22:50
Bruce Linton gets outed by shareholders of Canopy Growth: https://uk.reuters.com/article/us-canopy-growth-ceo/weed-leader-canopy-growth-ousts-co-ceo-bruce-linton-idUKKCN1TY1HV
Alberta returns $1.3 million of unsold Cannatrust products:https://grizzle.com/alberta-returns-canntrust-ctst-product/