Top takeaways from the MjBizCon International 2019 cannabis conference.*
*You must be 19+ years to view this content.
By Arundati Dandapani
The Marijuana Business Daily hosted its annual MjBizCon International Conference in Toronto this past week. The global showcase of experts brought a largely North American audience closer to distant corners of the globe including pioneer nation Uruguay, experts in LATAM, Europe, the Middle East, Asia, Africa and Australia. Day one was a pre-conference aimed at investors, while days two and three focussed on keynotes, breakout panels, individual presentations and expo hall display events.


Top highlights include:
Investors look for crazy founders who will never give up — founders’ depression and giving-up being all too common and soul crushing, and the top reason companies fail. Investors must attack the “balance sheets” and look for founders obsessed with making a fortune more than fame. Strong teams are critical for success. Intimate knowledge of companies and their founders, past performance and the competitive landscape are other qualities you need to analyze the performance potential of a firm.

Codie Sanchez of Cresco Capital Partners, Paul Rosen of Breakwater Venture Capital, Melissa Diaz of Rebel Rock Accounting, and many others were especially vocal about optimizing investor matches and backing next-level ideas to harmonize global consumption, production and sale of cannabis. This is an industry that’s pegged to bring in $32 billion (USD) in worldwide legal cannabis spending by 2022! Cannabis is the fastest growing sector with a 17% CAGR (US led) when compared to sectors like organic food (14%), food (7%), pet food (4%) and alcohol (3%) – Arcview Research & BDS Analytics. This is also a sector where a lot of companies are or should be rushing to develop their intellectual property (IP) to set the precedent and grow their claims in a cash-intensive industry.
Be careful! You’ll lose more money than you’ll make in this industry…. This is a very expensive industry to be in.
Paul Rosen, Breakwater Venture Capital

The Canadian Securities Exchange (CSE) works with entrepreneurs and companies looking to access looking to access the Canadian public capital markets. CEO Richard Carleton works with companies to maintain a policy of ongoing disclosure. There are a lot of rules in the Securities Act, so they work with companies to develop their disclosure statements without being promotional, and vet companies strictly prior to listing them on the CSE. Cannabis companies have been their driver of growth in the past 5 years.
Disclosure is the best disinfectant!
Richard Carleton, CEO, Canadian Securities Exchange
The end of Canadian domination (in cannabis) is near, we learn. Federal legalization of cannabis looks increasingly likely in the US, as popular US opinion reigns in favour of full legalization and re/de-scheduling of cannabis. Canada must turn to her mature capital markets and be prepared to act as multi-state operators. We shouldn’t be afraid of buying or setting up companies in the US and injecting Canadian capital in US markets or elsewhere. Still, it will be increasingly tough to compete with US brands and companies as we navigate the regulatory processes of “Legalization 2.0”. Mergers and acquisitions are on the horizon. Companies must bring together the board they want to grow with in their pre-revenue stage than wait till when their growth spirals out of control.
Go after your niche.

Building a niche may take a lifetime (or less), but knowing who you serve and who you don’t, makes it a lot easier for your customers, and also helps you target more effective messaging. Seeing that as a pact of honesty with your abilities (and consumers), makes the mission surmountable. Be exclusionary. Don’t try doing 37 things where you can do just 1 or 2.
Market widely.

In Canada, brands are limited by regulatory standards in how they can and cannot market cannabis. Successful brands in Canada capitalize on ancillary products, and also market with communities and experiences. Cannabis brands enjoy more recognition in the US, where advertising is a lot more mainstream and product variety exciting and normalized. Walk into a CVS and Walgreens in the US to witness many varieties of infused confectionaries and concentrates in their legal markets. So long as no health claims are being made on your cannabis products, you are free to advertise in states where adult-use is legal in the US. North America and Europe are leading the way with CBD (even if only 14% of Americans consume CBD), with Japan showing promise in Asia as a CBD market. Asia is consistently referred to as the sleeping giant of opportunity in cannabis owing to its ancient ties with farming, and medicinal, pharmaceutical, spiritual, religious or social use of the plant.

The industry is growing too fast, so plan well ahead. International markets will catch up with North America eventually. Trying to keep pace with the rapidly changing cannabis trade or regulatory frameworks in different markets is challenging. Of an approximate 195 countries in the world, nearly 40 have some legalization framework, and 9 have noteworthy commercial markets including US, Canada, Germany, Australia, Brazil, Chile, Israel, Italy and the Netherlands, according to the Brightfield Research Group, Prohibition Partners and the Marijuana Business Daily. The current international market size is led by the US with estimated medical and recreational sales in 2018 between US $8.5-10 billion, followed by Canada at between US $700-800 million, followed by Australia, Brazil, Chile, Italy, Israel and the Netherlands with combined sales at US $10-20 million. By 2023, they project between $25-30 billion sales in the US, $7.1 billion in Africa, and over $8 billion in Asia by 2024.
Sin and sustenance?
Moral and social acceptance of cannabis consumption centres on varying levels of stigma, awareness and brand/product perceptions. Branding and corporate reputation remained a consistent theme for quite a few panels as an ongoing challenge in the light of recent incidents of non-compliance with industry standards . We learned that it is better to have a reputation than none at all, perception being a key consumer metric brand marketers trigger. Managing Partner of Leger (a “Big 5” Canadian market research firm), David Scholz, gave the example of Maple Leaf Foods, which was able to overturn a major corporate reputation crisis when some of their shelf-food led to fatalities and an outbreak of Listeria. They did this by capitalizing on their pre-existing goodwill with customers and thoughtful messaging. Consistency and communication demonstrate transparency that only boosts corporate reputation. Always have a crisis-communications plan in place, ahead of disaster.
Canada’s 19th Prime Minister Kim Campbell in her opening keynote had also earlier that day urged everyone to challenge knowledge gaps with more consumer advocacy and clear communication, a commitment to ongoing education, partnership and business integrity.
https://platform.twitter.com/widgets.jsCanada’s 19th PM @AKimCampbell talking to @MJBizDaily about business integrity and corporate reputation: issues of high relevance to an industry that’s impacted a lot by perceptions, stigma, policymaking. #MJBizConINTL
— Arundati Dandapani (@itadnura) September 5, 2019
Industry must work wi gov to create clarity in regulations pic.twitter.com/tN2joUVDxU
Jonathan Zaid, Director of Corporate Social Responsibility at Aurora, talked about the importance of establishing CSR processes and engaging with data for impact. No matter what stage of firm you were, you could always adopt more sustainable practices to grow your green footprint while serving stakeholders. For a nascent industry as cannabis, it was a good idea to draw from the CSR successes of other industries, said Zaid. You can take Aurora’s survey here, to offer inputs on their materiality assessment survey.
An open, collaborative industry leads by example into the future, where legal cannabis is the new “internet” and will far exceed the success of companies that made trillions off the dot-com boom. Pot stocks might be down right now, but the future of legal cannabis is in creating strategic partnerships. Strong knowledge of regulations and strong relationships with the regulators, measurable targets and benchmarking will ensure our success in this industry. Cannabis is interdisciplinary and inclusive, and we need to keep it that way to grow exponentially. Embedded below is a video excerpt with the British Columbia based Co-founder and COO of Vitalis Extraction Technologies, Pete Patterson, from a larger upcoming feature on the economics of extraction that points to a global industry outlook.
Europe and LATAM spell opportunity, trailing behind North America.
Germany and Netherlands are leading the way in consumer sales in Europe. Netherlands already enjoys high social acceptability around cannabis consumption, so it is only a matter of regulatory catch-up. Canada already exports medical cannabis to Germany. Greece and Portugal are important from low-cost large-scale cultivation stand-point, largely owing to their sunny climates where farming cannabis yields higher returns than elsewhere, so these will be markets to watch. EU-GMP (Good Manufacturing Practices) was a hot topic that every company was trying to understand whether plant touching or ancillary and the CCI presented on the challenges and opportunities in being GMP and GPP compliant. Every company wants to show they uphold the gold standard in compliance. The Latin American market is full of interesting players, and like Europe is dominated by medical cannabis, with the exception of Uruguay, the first country in the world to legalize medical and recreational cannabis in 2013. You can access the detailed breakdown of activity in the Latin American and Carribean markets here.
Independent or Consolidated?

Cannabis brands might often find themselves in a target market quandary. What constitutes craft or artisanal? A substantial portion of the labour that goes into the production of the good must be manual in order for an item to be truly considered “craft” or artisanal. In times when there is no Big 5 or Pepsi/Coke yet, brands must leverage their immediate customers and target hyper-locally. Ted Whitney of NUG, Travis Lane of Levity Cannabis and Kristin Nevedal of the International Cannabis Farmers Association drew on a lot of symbiosis and partnerships when trying to define how cannabis opened more opportunity in the craft and artisanal markets, resembling craft beer. The three mentioned that craft cannabis demonstrated batch variance unlike other cookie-cutter formats and categories. In cannabis, consistency was hard to find with every experience being highly curated, every user-experience being different.
Communicating the “why” of your brand craft was key in putting it to market, said Whitney, and using data to drive further value. Hyperlocalization of cannabis was less of a problem and more of an opportunity, said Lane, who believed that so long as he never ran out of provincial customers in BC, he would continue to thrive. If this meant pooling resources with neighbourhood brewers and cannabis producers who otherwise comprised competition, he was all for community building and experience seeking consumer initiatives: “Let’s all brainstorm over beer about how to sell weed.” Fragmented markets co-exist as communities in the competitive landscape, but consolidation is an imminent opportunity or threat depending on your situation, network, community and outlook, as a lot of processes get automated and machine-human interactions evolve.
A “delicious” category, but know your consumers.

Regulations aside, consumer cannabis conversations have now bifurcated around CBD and THC products regardless of their uses (medical, recreational, pharmaceutical). Lawyers and doctors like Trina Fraser (Canada), Daniel Podesta (Uruguay), Matt Maurer (Canada) and Deepak Anand (Canada) shared detailed overviews of what’s allowed and what’s not and also their primer for what’s ahead in Cannabis 2.0 as the Canadian market opens up to edibles, extracts and topicals. Omar Yar Khan, VP of Public Affairs at Hill + Knowlton shared that although 20-25% of Canadians have a significant interest in edibles and infusables, 20% of Canadians say that they would stop purchasing a favourite brand if it started producing cannabis-infused products! Interest in THC and CBD infused beverages are at 51%, CBD-infused beverages at 58%, THC and CBD infused foods at 56% and CBD-infused foods at 59%, according to Hill + Knowlton Strategies’ May 7th-15th, 2019 online survey release of 1500 adult Canadian residents weighted to representation. Price, potency and prolongation of effect remain the top drivers of cannabis purchase, according to the same survey.
In Canada, dried flower remains the most popular form of consumption, being used by 57% of cannabis users, but 41% reported using edibles that they either made themselves or acquired through black market sources.
Data from Vividata- Vivintel 2019

Where do we go from here?
Knowledge is about moving conversations in what is primarily a “people business” where you place your bets on people not ideas. High degrees of ambition, creativity, openness, attention to detail, discipline, commitment to equity and ability to connect across governments, industries, talent and technologies will drive this momentum forward. Keep growing your brand, but never confuse it with your reputation, the larger sum of your brand’s impact along with many other measures. Acquiring deep speed – our ability to react to change with thoroughness quickly – will reward us in this high velocity and fast changing industry, as we grow our waters and green print as global leaders.
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