5 things I learned at MJ BIZ 2021

After a year off, MJ BIZ was back with authority in 2021 when Chris Walsh and his team hosted a great personal event in Sin City. After watching the show for 3 days and the day before at the Benzinga Cannabis Conference in NYC, here are my insights from both shows. What ruled the quarter? What was everyone talking about? Are there any hot investment areas waiting to be discovered? Let’s dive right in!

1. Incrementalism ruled the day – After conversations with over 5 people who have been doing the MJ BIZ show for over 5 years and asked: “What did you see, what did you notice?”, All participants in the quick survey had the same answer. “Ahhh, not much, not really”. Shrugs and “nothing new under the sun” responses shouldn’t shock anyone who has been in the industry for more than a few years. After several years of dynamic and explosive discoveries and inventions, the cannabis industry has settled on the hardware, insurance, flooring, lighting and packaging side, where all new products have only minor improvements to the current systems. Has the cannabis industry already reached Moore’s Law, where after 8 years of legalization phenomenal change has taken place? Cannabis hardware and plant-contacting machines have become the smartphone industry. There’s only so much blood to squeeze out of stone, or in this case a new LED light, a new soil nutrient, a new HVAC system, a new suction system, etc. Are the iPhone 11, 12 or 13 that different? ? How about the Samsung Galaxy 9, 10 and 11? Better chip every year, maybe a slightly better camera, a pixel or two more screen sharpness, and that’s about it. The poll didn’t reveal any groundbreaking or oooowww-ahhh discoveries that would be the story of cannabis in 2022. This is a sign that margin compression is kicking in on the production side, no more big discoveries that can increase or decrease yield by 33%, labor costs reduced by 25%, which leads me to # 2 …

2. On the other hand, cannabis tech platforms and marijuana websites are very hot with investors right now. The list of cannabis menu platforms, delivery platforms, POS systems, and websites whose traffic is funded changes from week to week. Since this is about margin compression in point 1, getting consumer data and traffic is the new way to increase your margins. Just check your Amazon account and see what they show you when you log in to their shopping area and the “Customers” area. Boom, margins are rising now as traffic turns into an order for an overflight of $ 0.05 for a ranking article on Blue Dream, and now you are expanding your shopping cart without them noticing. Touching the consumer will be the next 10 year wave in cannabis, not touching the plant. Every day a new pharmacy comes online and a new black market seller sets up a website. Marijuana access and procurement is no longer an issue for 85% of the US. Consumer data, online orders, loyalty programs are the future, just look at Amazon and in some form or another cannabis will be ordered and delivered in the future. Delivery platform EAZE bought an MSO and nobody really understands how big and groundbreaking that was. Jane received $ 100 million in funding, Dutchie $ 350 million, Flowhub $ 19 million, Weedmaps is now worth $ 2 billion, PotGuide.com sold for $ 8.5 million, Bengiza Media has just been bought by Beringer Capital and the Green Market Report has been bought by Crain Publishing. The moral of the story, the traffic (and its dates) are king, always was and always will be.

3. Workaround payment solutions – Your days are numbered. All that crazy talk about processing payments in pharmacies will come to an end with some form of Safe Banking Act. Cashless ATMs where the customer pays a crazy fee? No, I’m sorry, it’s the Fed’s turn. Cash advance systems so you don’t need an MC code to go through the VISA and MC network? No, take it for granted with payday loans as the US government’s financial hawks are over this stuff too. If you offer a credit card processing workaround system, your days are numbered. Regardless of whether big banks will step in with the Safe Banking Act, high risk trade execution will surely do it. They will charge the pharmacies like adult websites (wrongly I might add) and make them pay 6%, but in the future you will be able to legitimately keep a credit card in a pharmacy.

4. Mainstream companies are infiltrating cannabis and making room for legalization – The hydroponics world is considering a possible monopoly on equipment as the Hawthorne Group, also known as Scott’s Miracle Grow and Monsanto, will be the major player in hydroponic systems in America. Mainstream companies are creating subsidiaries to divert some of the press and reputation research, but they’re in the process of splitting a slice of the cannabis industry now so they’re ready for full legalization. Also, check packaging and plastics.

5. The next big cannabis war will revolve around branding. which Cannabis.net covers here. There are two camps on branding for the future of marijuana. One warehouse says it will be super important and the only thing one bud will hide from another. The other camp says branding is a myth in cannabis, just as every cannabis consumer survey so far has shown. The people who say branding is going to be HUGE in the future are people who have serious skin in it to convince you, especially MSOs, hedge funds who have already invested in certain brands, and marketers and branding people who received a paycheck from branding cannabis products. I think I’ve heard 35 times from people who tried to convince me that branding is the future of cannabis products. The part they don’t get is that cannabis is a plant that will grow in 8 to 12 weeks. It’s not a proprietary formula or a complicated process to create. it can grow in rich and poor countries. My response to these people has always been, “Great, but what are the most popular brands of tomatoes in the store? What about salad, tell me your 3 favorite brands of salad, go … ”A blank look and silence. They told me I would look at alcohol for branding and I said, “Yeah, Bud, Bud Light, and Bud products make up 93% of beer sales in America, so how does the branding work for anyone other than Anheuser Bush mean?” Every cannabis consumer survey so far has said the same thing, the consumer doesn’t remember the brand, color scheme, or how much of the product they used. They remember how much it costs and whether they got the desired effect from the product. The writing is on the wall for branding, desperate attempts by gifted people to convince you that the Reserve, Select, Limited Edition Blue Dream is better than Bob’s Blue Dream on the corner, which has been selling at half a gram since Bob doesn’t have massive overhead or hundreds of employees to consider when making a product. The cost of water, electricity, and labor will be far more important to your cannabis investment than the colors of the logo in the future.

6. MJ BIZ saw the first fistfight there as security personnel hired by a seller at the fair got involved with some patrons of the show who may have crossed their limits with a celebrity at the booth.

Here is the video of the fight at MJBizCon. pic.twitter.com/qBWdSAKQlp

– Jeremy Berke (@jfberke) October 22, 2021

As an aside, MJ UNPACKED, the latest cannabis show trying to make its way during MJ BIZ week in Vegas, seemed to receive mixed reviews from investors and brands at best. The show wasn’t very media-friendly to the media they selectively let in to cover the show, but based on the early feedback, they spent a boatload of money building and presenting the show to what appeared to be a very limited number of attendees. Quick polls of people who spent a day on both shows say they probably wouldn’t take the cab ride to Mandalay Bay next year and skip it all together.

For 2021 MJ BIZ, see you next year!

THE NEW CANNABIS FUTURE, READ MORE …

IS BRANDING IMPORTANT IN WEED OR IS IT JUST A MYTH?

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