Strategic Communications for the Cannabis Industry

EisnerAmper:Thanks for tuning into this episode of CannaCast. I'm your host, EisnerAmper's National Cannabis and Hemp Practice leader. I am joined today by Stu Zakim, president of Bridge Strategic Communications. He's a strategic communications professional with senior level experience in the entertainment, media and cannabis sectors. He has a strong background and proven track record in brand repositioning, integrated marketing programs, product launches, strategic media relations, development and implementation of corporate communication programs and crisis communications. Stu, thanks for joining me here today.
Stu Zakim:Thanks for having me, Eric.

EA:
Stu, how did you get involved in the cannabis industry?
SZ:Well, in addition to being a long time consumer, about 10 years ago, when Washington State was going legal, a friend of mine was forming probably one of the first marijuana business trade associations called the Marijuana Business Association actually, based out of because he was being asked by a lot of his friends when it was going legal, "Well, I want to go in this space, but what do I do?" So he started creating what is now common, is not webinars, but meetups where they'd have guest speakers and also he needed some communications help. I wanted him to be the guy on camera when the first Seattle dispensary opened and that worked. And then that was really my entry into it, although through the other parts of my career. Cannabis has been a constant one way or another, whether in films, I worked on a bunch of Cheech and Chong films. I handled Half-Baked on TV, I helped launch Weeds, I worked at Rolling Stone. So cannabis has been a link, in Playboy as well, throughout my career, but focused exclusively, it's been 10 years.
EA:How important is public relations to this industry?
SZ:Incredibly important and I'll tell you why. There's been an enormous amount of misinformation and propaganda put out there for God knows how many years by a variety of different people with agendas, that don't really sync up or make sense. Nevertheless, people have stigma, even though the plant is legal in 19 states. And if you add medicinal, we're in 38 states now. There's still a stigma that exists as a result of this long term propaganda campaign by the government, which really was started during the Nixon administration as a way to penalize African Americans and hippies. So to me, public relations is crucial, we are the bridge to the media. And it's up to us to use that vehicle to tell the correct story, by telling the right story, we can help eradicate the stigma, at least soften it and let people understand that this plant is really a miracle plant. And when we have a world of addicts on opiates and other things, cannabis only helps people, it doesn't destroy lives. So that is why I think the public relations function is so important
EA:With what you do, how different is it working in the cannabis industry, as opposed to the other industries you mentioned earlier?
SZ:It's only difficult, because once again, after the people giggle or laugh when I call and I bring them down to reality, it's a bit of a challenge, because once again, they still have that stereotype in their minds. And when you try to demonstrate not only the medical benefits, but from a lifestyle perspective, how legalization of cannabis is changing hospitality and so it's not just about getting high, it is a cultural thing. And getting them to understand that is the challenge, but I have been okay doing that so far.
EA:At what point in a company's life cycle, should they contact you?
SZ:In my mind when they're trying to get their license, because the most important part of the license, regardless of what state you're in, is the town has to A, approve selling cannabis or growing it and B, they have to have some infrastructure set up where there's a board who approves or not approves. And the PR function at that point is more policy driven than media relations driven, because you're working to educate the legislators as to why they should advocate for legalized cannabis in their town.
EA:You mentioned the stigma associated with cannabis earlier. How important is education and changing that stigma and how do you accomplish that?
SZ:Education is probably the most important part of the tool shed for changing that stigma and eradicating it. Once people learn and see and experience how somebody who might be strung out on opiates can live a normal life and still address their medical issues by using the right strain of cannabis, is a story that nobody can refuse. The same with how it can create enormous economic opportunities for towns and for people who are looking to either switch careers or enter probably one of the last major growth industries. So by telling those stories, you hope that ultimately, that the impact will be to soften public opinion, because the role of PR is really to influence public opinion.
EA:Let's focus on New Jersey, because New Jersey recently approved and started selling adult use recreational cannabis. In the first month New Jersey's shop sold over $24 million in cannabis. How did the first month go? Absence forgetting about sales, how did the whole process go?
SZ:Two things, first of all, the dispensaries that are open are MSOs. So while it's great that there is adult use cannabis for sale in New Jersey, it almost goes counterintuitive to what the whole legalization initiative was about, was social equity in this cannabis space. That said, it went incredibly smoothly, obviously there were lines the first couple of days, but as a medical patient, I applaud the focus on the medical patient by the MSOs rather than in other states where medical is tossed to the side. In New Jersey by law, the medical patient comes first, no lines, you have parking spaces, you have a separate place to purchase your cannabis. And as of July 1st, there will be no sales tax on medical cannabis, because there's no tax on medicine. So I think it's going incredibly smoothly. And my only point of contention, as I mentioned earlier is when do the social equity people, which include women, veterans, Blacks, Latinos, everybody, they are included and 25% of the licenses have to go to that crowd, when is that going to start happening? And how are they going to raise money? Is the bigger question.
EA:Well, let's cross the water now and go into New York State and New York recently issued another 58 conditional cultivator licenses, bringing the total to the state to 146. They're considered conditional, because the state is still drafting rules for the adult use program. When can we expect sales to occur in New York? What are the next steps you expect New York state to undertake?
SZ:Well, sales is in the distance, because I believe today the OCM was having a meeting to go over regulations. They have to the regulations done first before any licenses can be issued for anything, not the conditional ones for cultivation, I'm talking regular licenses. And that state law is, I guess, once the regulations are written, they still have to go out for approval to various parties that have influence over weighing in on things before it gets locked. And the most important part, is you have to have product. Your point about the temporary licenses for the cultivators, they're limits are so restrictive that they could never generate enough product to feed the demand.