420 was predicted to be a huge day for cannabis sales and it certainly didn’t disappoint. Akerna said that by the time Tuesday hit, the daily retail sale of legal cannabis was expected to gross $95 million nationally, bringing total 4/20-related sales to $370 million in the U.S. if Akerna’s data proves accurate.
Nevada-based Planet 13 Holdings Inc.(OTCQB:PLNHF) a leading vertically-integrated Nevada cannabis company, announces record sales day on April 20, 2021 (“420”). The Company generated $543,000 in single-day sales with gross margins during the month in excess of 50%.
“The demand and acceptance for cannabis is growing across the country, and nowhere is that more evident than in Las Vegas. For tourists returning to Vegas, Planet 13 is synonymous with cannabis and an incredible entertainment experience,” said Larry Scheffler, Co-CEO of Planet 13. “The demand is so overwhelming that even with the many improvements we have made to streamline throughput, we still can’t capture all of the demand. I’m excited for the relaxing of COVID restrictions on May 1st and our expansion which doubles our sales floor and points of sale to handle the unprecedented surge in customer traffic.”
Planet 13 said it is also hiring over 300 workers to staff its Vegas dispensary expansion (doubling points-of-sale/registers to 85) and to staff its new California SuperStore.
Ayr Wellness Inc. (OTCQX: AYRWF) said it celebrated the 420 holiday with retail sales records across its six-state footprint. Nevada, Massachusetts, and Pennsylvania all had record days. In total, the company saw 14,241 transactions and $1.24 million in sales on Tuesday, for an average ticket of $87. Retail gross margin remained high at over 50%.
In Nevada, where the local economy is seeing the benefits of the reopening of the casinos and entertainment venues, Ayr, through its service and operation agreements with licensed operators, saw over 7,500 transactions, including over 2,000 in its busiest location in Henderson, NV, 30% above its average daily count.
“I could not be prouder of our Ayr Wellness team. This 420 we set a new standard for performance and customer service with over 14,200 transactions processed in one day. As cannabis continues to mainstream throughout our culture and 420 increasingly becomes a “National Holiday”, we are thrilled to provide our consumers with an exceptional customer experience, excellent products, and new ways to safely celebrate the wellness and wonder of cannabis,” said Jonathan Sandelman, CEO of Ayr Wellness.
California’s largest marketplace for legal cannabis delivery announced record 420 sales. Eaze customers bought an average of $200 worth of cannabis on 4/20/21, a 50% increase in order value over 420 2020. Deliveries were also up significantly, with a 185% increase compared to any other Tuesday in 2021. Eaze, which has completed 7 million deliveries to date, recently announced its expansion into Michigan and its line of private label brands. “Cannabis consumers moved to delivery as their preferred way of shopping last year, so we’re not surprised to see such a strong 420 in 2021,” said Ro Choy, CEO of Eaze, “Even as daily life begins to return to normal, consumers are staying with the convenience of delivery. It’s the future of this industry.”
Planet 13 Holdings Inc. (CSE:PLTH) (OTCQB:PLNHF) reported that revenues rose 36.5% to $$22.8 million for the third-quarter ending September 30, 2020, versus last year’s $16.7 million. The company also delivered a net income of $0.2 million as compared to a net loss of $1.7 million in 2019. The net income before taxes was $3.4 million as compared to a net income of $0.3 million last year for the same time period.
“Our performance in the third quarter exceeded expectations – leading to our highest quarter of sales ever,” said Larry Scheffler, Co-CEO of Planet 13. “Despite being impacted by the ongoing global pandemic and our Las Vegas SuperStore only at 50% capacity, we achieved 36% higher revenue compared to pre-COVID quarters. This is a testament to the strength of Planet 13’s business model and the success of the operational improvements we put in place to ensure our ability to serve local customers. As Las Vegas returns to normal and the economy recovers, we will undertake further strategic initiatives to grow revenue at the SuperStore and increase our sales to local customers in Las Vegas.”
The operating expenses, excluding non-cash compensation expense and depreciation and amortization, was $7.2 million in the quarter versus $6.7 million in 2019, an increase of 7.9%. The third-quarter 2020 adjusted EBITDA of $6.2 million was higher than the 2019 Adjusted EBITDA of $3.4 million.
“In the third quarter, our in-house brands contributed 25% to SuperStore revenue – continuing to be one of the most recognized and fastest-growing segments within the Planet 13 portfolio. In the wholesale market, we saw increasing sales month over month throughout the quarter and continuing into October. Building on this momentum, we continue to invest in cultivation with our recently announced acquisition of a 45,000 square foot facility in Las Vegas, better positioning us to supply wholesale and retail sales within the state,” commented Bob Groesbeck, Co-CEO. “We are excited to leverage our knowledge and experience from Nevada to California, with the opening of our new dispensary in Santa Ana in 2021 – the world’s second-largest dispensary. Planet 13 is well-capitalized, and we look forward to executing on future expansion into other major growth markets.”
Post Quarter Updates
Following the end of the third quarter, the company listed the following highlights in a statement:
On October 13, 2020, Planet 13 announced the addition of non-cannabis retail space to the Las Vegas SuperStore.
On October 19, 2020, Planet 13 announced expanding the dispensary floor of the Las Vegas SuperStore.
On October 19, 2020, Planet 13 announced a CDN$20 million bought deal public offering.
On October 20, 2020, Planet 13 announced an upsize to bought deal public offering to CDN$25 million.
On November 5, 2020, Planet 13 announced the closing of a CDN$28.8 million bought deal public offering.
On November 20, 2020, Planet 13 announced opening the Medizin dispensary.
Planet 13 Holdings Inc. (OTCQX:PLNHF) announced preliminary 2020 third-quarter revenue of $22.8 million a 110% increase over the second quarter. The company did not release any profit or loss figures for the quarter. The company delivered a net loss of $4 million in the second quarter. The gross margin was ~50% in the third quarter.
Planet 13 said that the store served ~1,625 average customers per day in-store with an average ticket of ~$124. In June of 2019, the store was serving over 2,000 customers a day, so there is clearly a decline in the store traffic as tourism is yet to return to the old levels. The average ticket in June 2019 was $88, so the ticket size is increasing even if the traffic is lower.
“Q3 has proven Planet 13’s resilience and strength. We drove an impressive rebound in sales and a record quarter by making operational improvements in response to COVID-19. The improvements have led to higher average tickets and conversion rate despite the reduced tourist traffic. Along with these operational improvements at the store, our delivery and curbside pickup have expanded our revenue from Las Vegas residents,” said Larry Scheffler Co-CEO of Planet 13. “We are opening our neighborhood dispensary in Q4 and continuing to drive increased delivery and curbside sales to increase our share of sales to Las Vegas residents.”
The company also reported the following statistics:
In-Store revenue of $18.5 million in Q3 2020 compared to $16.3 million in Q3 2019, an increase of 13.0%.
Delivery & Curbside revenue of $3.4 million in Q3 2020 compared to $295 thousandin Q3 2019.
Wholesale & Other revenue of $1.0 million in Q3 2020 compared to $61 thousand in Q3 2019.
Total revenue of $22.8 million in Q3 2020 compared to $16.7 million in Q3 2019, an increase of 36.5%
Separately, Akerna (NASDAQ: KERN) reported that for the customers using its MJ Platform in Nevada that in May, cannabis sales started to recover, which could be attributed to the reopening of restaurants and shops. “Adult use sales experienced a 52% increase in average daily sales when compared to April. It is estimated that cannabis retailers experienced a 35% potential loss in total sales between March 21 and May 31, when compared to January and February averages.”
Bob Groesbeck Co-CEO of Planet 13 added, “We started wholesaling our products at the end of June, and are rapidly gaining momentum. We are now in 33 dispensaries across the state and expect this to grow as our brands continue to gain name recognition. Between wholesale and retail sales our edible, concentrate, and beverage lines are among the top 10 selling SKUs statewide. In Q3, inhouse brands made up 25% of cannabis sales. In order to achieve the Company’s goal of delivering a minimum of 50% of revenue from our in-house brands, we are transitioning our newly purchased indoor cultivation facility to our in-house strains to increase sales of our popular, high-margin, Medizin flower brand.”
Planet 13 Holdings Inc. (OTCQX: PLNHF) is expanding beyond its universe of Las vegas Nevada as the company acquires a California dispenary. Planet 13 said it is has closed on its plan to buy Newtonian Principles, Inc. in a stcok and cash deal valued at $4 million.
The acquisition includes the California cannabis sales license held by Newtonian, and a 30-year lease for a dispensary in Santa Ana, California, and certain other assets from Warner Management Group, LLC.
“Closing the Acquisition is a major step towards Planet 13’s first California location. We’ve examined hundreds of locations and are confident in our ability to replicate the SuperStore experience at this location, introducing new customers to the Planet 13 brand,” said Bob Groesbeck Co-CEO of Planet 13. “At this time, due to COVID-19, we are not putting a timeline on the opening of the dispensary. We have budgeted approximately six million dollars in CAPEX for the opening of the Santa Ana dispensary, leaving us plenty of cash on hand to manage any COVID-19 related impacts on the business.”
The price paid was much lower than the originally agreed-upon price of $10 million back in June of 2019. At the time, the company said, “After a thorough and deliberate search, we identified this excellent site located three miles from the South Coast Plaza Mall, which hosts 24 million visitors a year and is just a short ten-minute drive from Disneyland, with 18 million visitors per year.” Then it seemed as if the deal was off when Planet 13 said it had terminated the deal, but the announced that it had renegotiated the terms in April 2020.
Planet 13 had started 2020 off with record sales in historically slow months for tourism, but then the COVID-19 pandemic stopped all tourism as hotels and casinos closed. The company was able to sell to local residents but sorely missed its tourist crowd.
Larry Scheffler, Co-CEO of Planet 13. “When cannabis dispensaries in Nevada were told to close, we pivoted to focus on our delivery business, and in only 25 days we’ve ramped our delivery service from five to twenty-eight vehicles and have shifted our customer mix from 15% local area residents, to 100%. While tourism will continue to be a strong driver of our business when things return to normal, this is a unique opportunity for us to build a strong local base and gain lasting market share as we become a fixture in the daily lives of Las Vegas Valley residents.”
Planet 13 Holdings Inc. (OTCQB: PLNHF) financial results for the fourth quarter and year-end December 31, 2019. Revenues increased 99.8% in the quarter to $16.5 million versus last year’s $8.3 million for the same time period. While the company characterizes the fourth quarter as a slow one, it benefits from the MJBiz cannabis conference which brings in over 30,000 cannabis industry participants. The company trimmed its net losses to $2.6 million from $3.1 million in the previous year.
Planet 13 said its first-quarter 2020 looks to be flat sequentially with revenue coming in at $16 million.
For the full year of 2019, revenues increased 200% to $63.6 million versus the previous year’s revenue of $21.2 million. Planet 13 also lowered its net losses for the year to $6.7 million versus 2018’s net loss of $10.7 million
“Over the past month, businesses across the country have had to quickly adjust to the reality of COVID-19 related restrictions, and Planet 13 has been no exception. While this has impacted our day to day operations, we are approaching this challenge as an opportunity to deliver safe and responsible cannabis to our community,” said Larry Scheffler, Co-CEO of Planet 13. “When cannabis dispensaries in Nevada were told to close, we pivoted to focus on our delivery business, and in only 25 days we’ve ramped our delivery service from five to twenty-eight vehicles and have shifted our customer mix from 15% local area residents, to 100%.”
The company’s focus has always been on the tourist crowd, which has all but evaporated in the city. Scheffler addressed this saying, “While tourism will continue to be a strong driver of our business when things return to normal, this is a unique opportunity for us to build a strong local base and gain lasting market share as we become a fixture in the daily lives of Las Vegas Valley residents.”
The company reported that it has cash of $12.8 million at the end of the year versus 2018’s $19.4 million. The company’s cost of goods sold in the fourth quarter was $7 million and the total expenses were $9.6 million. The company said it has paired back expenses, reduced fixed costs and expect that the SuperStore operations will be breakeven or better if the shutdown is extended indefinitely.
Pivot To Residents
On the company’s earnings call, Sheffler said, “Through April, we were generating an average of over $80,000 per day in delivery revenue. We believe that once we have added additional drivers we can move that number easily north of $100,000 per day. This is new revenue for Planet 13 and on top of the 40%ish revenue growth that was being driven by Phase 2 prior to the shutdown. As everyone knows historically, 50% of our revenues come from locals, 100% of our revenue today is coming from residents of the Greater Las Vegas Valley. We are optimistic that we can retain many of these new customers even after the dispensaries reopen and life returns to normal.”
Bob Groesbeck, Co-CEO added, “We opened Phase II of the SuperStore during Q4 and are pleased to report that as projected, it drove increased traffic, customer engagement, and higher average ticket. During Q1 2020, we saw the network effect of Phase II accelerate, resulting in ~$16.6 million in revenue, a 20% increase compared to Q1 of 2019, despite effects of COVID-19 starting in the middle of March. In addition, the customer-facing production facility is fully ramped up and we have begun to offer Planet 13’s portfolio of in-house brands to select third-party dispensaries on a wholesale basis.”
The company did say on the earnings call that even if it gets deliveries up to $100,000 a day from its current $80,000, its revenues will still be cut in half.
It’s time for your Daily Hit of cannabis financial news for February 6th, 2020.
On the Site
Planet 13 Cafe Is Paying Off As Sales Stay Strong
Las Vegas-based cannabis dispensary Planet 13 Holdings Inc. (CSE: PLTH) (OTCQX: PLNHF) reported record-breaking January sales driven by strong traffic and attributed it to the company’s newly opened cafe and event space. The company said that the average ticket size was approximately $100. Planet 13 said that January revenue was ~10% higher than the seasonally slow months of November and December.
CBD Craze Sparks ‘Weed Washing’ Trend
Remember the term ‘pinkwashing’? Where companies slapped a pink ribbon on just about anything and claimed to be donating lots of money to breast cancer research? It’s happening again, but this time it’s in the cannabis industry.
“Weed washing” is a disturbing trend that appears to be most dominant in the beauty industry and refers to the act of adding hemp oil that does not contain CBD or only contains a minuscule, non-therapeutic amount to a product in order to capitalize on CBD’s popularity and high price point.
Psychedelic Clinic Company Field Trip Raises $8.5 Million
Psychedelic clinic company Field Trip Psychedelics Inc. closed its oversubscribed Series A financing round. The financing, which was completed through a private placement, raised $8.5 million for the company.
The company said the funds will be used to execute the initial stages of Field Trip’s strategic plan to build out the world’s first network of medical centers focused exclusively on psychedelic-enhanced psychotherapy. In addition to that, the financing will help fund the final construction of its research and cultivation facility at the University of the West Indies in Jamaica.
South Carolina Kicks Off Hemp Farming Season
The South Carolina Department of Agriculture (SCDA) said that it will begin accepting applications for hemp farming, handling and processing permits for the 2020 growing season starting Feb. 1, 2020. Now in its third year, South Carolina’s hemp farming program has grown from 20 farmers in 2018 to 114 permitted farmers and 43 processors at the end of the 2019 season.
Requirements to receive a hemp farming permit include:
Proof of South Carolina residency
Criminal background check
$100 nonrefundable application fee and $1,000 permit fee
GPS coordinates of all locations on which hemp will be grown
Attending an SCDA orientation and signing a Hemp Farming Agreement prior to possessing any hemp, including clones and seeds
In Other News
Aurora Cannabis Appoints Two New Independent Directors
Lance Friedmann and Michael Detlefsen have been appointed as two new directors for the Canadian cannabis company, Aurora Cannabis. The two have held roles with Kraft Foods and Pomegranate Capital Advisors, respectively.
Aurora Cannabis Executive Chairman and Interim CEO Michael Singer stated, “We are pleased to welcome Lance Friedmann and Michael Detlefsen as independent members to the board at this critical time in our transformation. We expect to see cannabinoids grow as a category in consumer products and believe their depth of experience and strong track records of successful brand development and operational business transformation will provide helpful insights to our executive team. With the addition of Messrs. Friedmann and Detlefsen, Aurora has expanded its Board, independent directors.”
KushCo Holdings Announces $16 Million Registered Direct Offering
KushCo Holdings has announced its entrance to a definitive agreement with investors purchasing stock in the company. The agreement includes 10,000,000 units, with each unit representing one share of common stock. The transaction was set for $0.001 per share, and a warrant to purchase half a share of common stock, at an offering price of $1.60 per unit, pursuant to a registered direct offering.
Las Vegas-based cannabis dispensary Planet 13 Holdings Inc. (CSE: PLTH) (OTCQX: PLNHF) reported record-breaking January sales driven by strong traffic and attributed it to the company’s newly opened cafe and event space. The company said that the average ticket size was approximately $100.
The company said this was the second month in a row that the average ticket crossed the $100 mark. The company also achieved this in December, which is typically slower, but the company was aided by the move of the large MJ Biz conference to December That event was attended by over 30,000 people and no doubt brought many customers in the doors. Planet 13 said that January revenue was ~10% higher than the seasonally slow months of November and December.
“January is a strong proof point for the network effect of Phase II [restaurant, event center, and consumer-facing production facility]. As we add additional attractions and store-in-store options we expect the cross-promotion and improved customer experience to continue to drive traffic and ticket growth,” said Larry Scheffler, Co-CEO of Planet 13. “I would like to thank our customers who continue to choose Planet 13 for their cannabis shopping experience when visiting Las Vegas. It is gratifying to see the SuperStore’s year over year growth and to witness our return customers’ excitement when they discover the SuperStore’s new features.”
The restaurant and event space that was opened as part of Phase II development increased customer awareness of the Planet 13 Las Vegas Cannabis Entertainment Complex and enhanced customer engagement resulting in longer average time spent exploring the SuperStore and higher average ticket size. Preliminary unaudited gross margin was consistent with the previously reported range of 56-59%.
Dosist Wellness Experience
With all the space that the company has on-site, it is able to offer brand pop-up shops as well. The first comes from Dosist, which will open the Wellness Experience, occupying space within the Planet 13 SuperStore dispensary and will be staffed by Dosist employees known as Guides. The dosist wellness experience will act as a sales and education platform, introducing the brand’s dose-controlled cannabis therapy to dispensary customers.
“With 43 million tourists a year, 3 million residents and a reputation as a global epicenter for culture, hospitality, and tourism, Nevada has proven to be an exciting opportunity for Dosist to inspire, educate and engage with a new audience about the benefits of dose-controlled cannabis therapy,” said Gunner Winston, CEO of Dosist. “As a leading premium retailer Planet 13 has done an incredible job elevating the cannabis experience to a global consumer and we are thrilled to partner together to open the dosist wellness experience shop-in-shop in the SuperStore.”
It’s time for your Daily Hit of cannabis financial news for August 7, 2019.
On the Site
Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) reported financial results in Canadian dollars for the second quarter and first-half ending June 30, 2019, with net revenue climbing 202% to $10.2 million over last year’s $3.4 million. The revenue increased 58% sequentially from $6.5 million in the first quarter of 2019. The company attributed the increase to sales in CBD oil, which carries no excise tax reduction and increased sales of dry flower.
Today, GrowGeneration Corp. (OTCQX: GRWG) announced the release of the financial results for the fiscal quarter ending on June 30, 2019. Net revenue for the quarter was $19.48 million, up from $7.15 million in the same period of the previous year. The company attributes the increase in revenue to the addition of 14 new retail stores
SOL Global Investments (CSE: SOL)(OTCPK: SOLCF) is changing from an international cannabis investment company to a U.S. multi-state cannabis operator (MSO) under the Life Sciences category of the Canadian Securities Exchange. In addition to the business designation change, the company is also changing its name to Bluma Wellness.
In Other News
Diego Pellicer Worldwide, Inc. (OTCQB: DPWW) announced that its Denver licensee reported record sales for the month of July and that its sales average has risen by 8.56%. “Diego Pellicer – Colorado has clearly proven that premium products plus outstanding customer service and a world-class shopping experience is a winning formula for success,” said Diego Pellicer CEO Ron Throgmartin.
Planet 13 Holdings Inc. (CSE: PLTH) (OTCQX: PLNHF) announced that in July it served on average 1,937 customers per day with an average sale of $90.41 from the Planet 13 Las Vegas Cannabis Entertainment Complex. In May, the company accounted for roughly 10% of all cannabis sales in the state of Nevada, with a customer conversion rate of 60%. “We continue to drive impressive results from the SuperStore’s original 16,000 sq. ft. dispensary footprint in advance of the Phase II,” said Larry Scheffler, Co-CEO of Planet 13. “In May we reached an impressive milestone, the SuperStore accounted for 10% of all dispensary sales in Nevada. I’m optimistic we will see this trend continue once the department of taxation releases June and July numbers.”
C21 Investments Inc. (CSE: CXXI) (OTC: CXXIF) released its unaudited financial results for the quarter ending on July 31, 2019. Unaudited revenue grew from $7.7 million to $9.8 million, representing a quarter-over-quarter increase of 27%. The unaudited gross margin rose from 43% to 49%. The company will release its certified financial results on or around September 12, 2019.
Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) announced that it has received approval to acquire 100% 100% of the membership interests of Gloucester Street Capital, LLC, the parent company of Valley Agriceuticals (Valley AG). Valley AG is one of ten vertically integrated medical cannabis license holders in the state of New York. The license will give Cresco the right to operate one cultivation facility and four dispensaries in the state. The acquisition is expected to close by the end of the August.
Plus Products Inc. (CSE: PLUS) (OTCQB: PLPRF) reported its results for the fourth quarter and calendar year ending December 31, 2018. The quarter’s revenues were $3.3 million and the company delivered a net loss of $2.9 million. This was an increase in sales of 770% over 2017 for the same time period and a 31% sequential increase.
Executive Order Establishes Michigan Marijuana Regulatory Agency
Governor Whitmer’s executive order 2019-07 has established the Marijuana Regulatory Agency (MRA) within the Department of Licensing and Regulatory Affairs (LARA), combining previous authorities, functions, and duties into an agency which allows the state of Michigan to more efficiently regulate both medical and adult-use marijuana.
In Other News
Planet 13 Holdings Inc. (CSE: PLTH) (OTCMKTS: PLNHF) has announced their fourth quarter and full-year financial results for 2018. In the fourth quarter, revenues rose to $8.3 million. Adjusted EBITDA was a loss of $1.9 million, and the company had a net loss of $4 million. For the year, revenues were $21.2 million, adjusted EBITDA was a loss of about $0.5 million, and the company incurred a net loss of $10.7 million.
TILT Holdings Inc. (CSE: TILT) (OTCMKTS: SVVTF) has announced their year-end financial results for 2018. Revenue for the year was $5.7 million with an additional $98 million in pro forma revenue. The net loss was $552.1 million, but that included a $496.4 million one-time, non-cash goodwill impairment taken at the end of fiscal 2018 related to the company’s reverse takeover of Sante Veritas Holdings. Excluding the reverse takeover, the company’s net loss was $55.7 million.
The pet-focused hemp and cannabis wellness brand, True Leaf Medicine International Ltd. (CSE: MJ) (OTCQX: TRLFF) (FSE: TLA) announced today that they have received C$914,442.73 from the exercise of warrants before their expirations on April 21, 2019. In total, the company exercised 2,575,895 warrants at a price of C$0.355 per warrant. “True Leaf is proud to have strong support from our investor community as demonstrated by the successful warrant exercise,” said Darcy Bomford, Founder and CEO of True Leaf. “This additional capital will strengthen our balance sheet and allow us to continue to execute on our growth plans, including bringing a legally-compliant CBD product for pets to market and expanding our global distribution, including entering new markets in the Asia Pacific region and Australia.”
Alternate Health Corp. (CSE: AHG) (OTCQB: AHGIF) is making a play for the CBD industry. Today the company announced that it will acquire Blaine Labs Inc., a manufacturer and distributor of FDA-approved and cGMP-certified dermatological products, for $20 million. Blaine Labs currently has over 50 SKUs currently available in major retailers, including Walmart, Amazon, CVS and Walgreens. Alternate Health hopes to use the company’s existing equipment and distribution network to launch a proprietary line of CBD-infused products.
CannTrust Holdings Inc. (TSX: TRST) (NYSE: CTST) has announced the pricing of its previously-announced underwritten public offering. The company is selling 30,909,091 common shares at a price of $5.50 per share for gross proceed of around $170 million, minus underwriting discounts and commissions and estimated offering expenses. Some shareholders are also selling 5,454,545 common shares in the offering. Additionally, the company has granted to the underwrites a 30-day option to purchase up to an additional 4,636,363 and 818,182 common shares, respectively, at the public offering price. The offering is expected to close on or around May 6, 2019.
Advertising in the cannabis industry is difficult. In most U.S. states where cannabis is legal, rules regarding cannabis advertising are complicated and extremely restrictive. For example, in California, businesses can only run ads in areas where “71.6 percent of the audience is reasonably expected to be 21 years of age or older.” The advertising landscape online is even far less forgiving. Most online ads platforms, such as Google Ads or Facebook Ads, explicitly prohibit the advertisement of cannabis products.
In the absence of reasonable advertising regulations for the cannabis industry, many business owners have turned to a new and rapidly growing form of advertisement: Social Media Influencers.
What is a Social Media Influencer?
A social media influencer is a person that uses their large social media following (which can range thousands to millions of followers) to promote certain products or services. Outside of the cannabis industry, one of the most successful social media influencers is Kylie Jenner, who companies will often pay hundreds of thousands of dollars for single social media post promoting their product.
Does Influencer Marketing Work?
While some may balk at the idea of paying a person thousands of dollars to promote a product on Instagram, the numbers do not lie – influencer marketing works. Approximately 49% of consumers depend on influencer recommendations. Companies that use influencer marketing earn on average $6.50 for every dollar spent. By 2020, the influencer market is expected to grow to $10 billion.
Why Are Cannabis Companies Turning to Influencers?
As alluded to earlier, advertising in the cannabis industry is difficult. Not only are advertising regulations for cannabis complex, but also traditional means of advertisements are expensive. Buying ad space on television, radio, or a billboard can cost companies thousands of dollars with little guarantee of success. In contrast, influencer marketing is loosely regulated (for now) and less expensive.
It is also easier to target specific demographics by relying on influencers that appeal to your core audience. Cannabis business owners may not know who is going to view their highway billboard, but they do know what kind of person is going to visit Snoop Dogg’s Instagram page.
Who Are The Leading Cannabis Influencers?
The question of who the cannabis industry’s leading influencers are is a topic for debate. Unlike other industries where the practice more prevalent, influencer marketing in the cannabis industry is still relatively new. Consequently, it is difficult to say who is the “top cannabis influencer.” However, there are at least a few cannabis influencers that stand out from the pack. Here’s five cannabis influencer that have turned their social media following into big business:
Comedian Seth Rogen has built a career off of starring in stoner comedies like Pineapple Express and This Is The End, so it is only natural that he would use his talent and fame to spread the word about cannabis. With 6.6 million followers on Instagram, Rogen might not be the world’s most widely followed celebrity, but he has built up a strong and loyal social media following. Hoping to capitalize off of his reputation as a cannabis connoisseur, Rogen and his fried/business partner Evan Goldberg have teamed up with the world’s largest cannabis company, Canopy Growth, to launch a new hemp and cannabis company called Houseplant. Understanding the power of social media, Rogen announced the brand by leaving a cryptic message asking people to follow the Houseplant’s Instagram page.
Not content to be the World Heavy Champion of Boxing, sports legend Mike Tyson has dived headfirst into the cannabis industry. Like Seth Rogen, Tyson has leveraged his fame to turn himself into one of the industry’s leading advocate. Tyson has partnered with the upscale cannabis dispensary Planet 13 to be the exclusive launch partner of his 40-acre cannabis resort, dubbed Tyson Ranch. In addition to Tyson’s 7.6 million Instagram followers, Tyson has a popular cannabis podcast called Hotboxin’ with Mike Tyson, which has close to 90,000 followers.
“Tyson Ranch, consists of a team with 100+ years of industry experience focusing on quality to make premium cannabis products. We are all about going the extra step to offer truly great cannabis. The Planet 13 Cannabis Entertainment Complex offers customers an ultra-premium cannabis experience that dovetails perfectly with Tyson Ranch’s belief that not all cannabis is created equally,” said MikeTyson.
Dan Bilzerian, owner of the cannabis brand Ignite, is perhaps one of the biggest influencers in the cannabis industry. Often a polarizing figure within the industry, Bilzerian’s social media pages are filled with bikini-clad models in various states of undress, exotic locations, and more often than naught firearms. While some may characterize his social media presence as the epitome of toxic masculinity, with more than 26 million followers on Instagram, it’s hard to argue that he doesn’t have a strong following.
Bilzerian became one of the world’s most successful professional poker players, winning over $50 million in a single year. Despite not adhering to any social norms — and continuing to be unapologetically himself — he developed a reputation within the gambling community for always doing what he said he would do, a mindset that he’s carried with him into numerous investment opportunities, business ventures, and personal pursuits — creating an empire. Now, he’s dedicated to building a brand in the cannabis industry to live the Ignite lifestyle.
Michael Straumietis, also known as Big Mike, is the CEO of the cannabis fertilizer company Advanced Nutrients. Straumietis has built a career off of developing cannabis-specific nutrients and has leveraged that fame into an Instagram following of almost 3 million. Unlike Dan Bilzerian, Straumietis positions himself more as a cannabis thought leader than a globe-trotting playboy.
In 1996, BigMike took $25,000 he’d made from a small illegal grow in Temecula, California, snuck into Canada with a fake passport and built a growing organization 200 people strong. He then used his growing and business expertise to start his company, Advanced Nutrients. Today, Advanced Nutrients is the maker of the #1 selling cannabis-specific nutrient line in the world, with over $110 million a year in sales from 93 countries. Advanced Nutrients also lends seed money to individuals in developing countries who dream of starting a small business, but lack the means to do so. BigMike‘s charity Holiday Heroes feeds over 30 thousand people in need, each Thanksgiving and Christmas.
Charlo Greene is a former journalist turned cannabis entrepreneur that gained overnight fame after she announced live on television that she was quitting her job to pursue a career in cannabis. Greene is a somewhat controversial figure in the cannabis industry after running afoul of regulators in Alaska for launching eponymously named Alaska Cannabis Club. With approximately 214,000 followers on Instagram, Greene is what is called a “Micro-Influencer,” which is someone that has a small but dedicated social media following. Nevertheless, Greene has carved out a niche for herself in both the cannabis industry and the wider entrepreneurial community.
The world of cannabis influencers may still be new, but it is rapidly developing. Even if cannabis advertising regulations relax over the coming years, don’t expect cannabis influencers to go away. Influencer marketing is an incredibly powerful form of advertising, regardless of the industry.
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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis