Cannabis Marketing And The Future Of CBD, With The Brightfield Group

Speaker 0 00:00:00 I'm Matt balm. And this is the ministry of hemp podcast brought to you by ministry of hemp.com. America's leading advocate for hemp and hemp education. Speaker 1 00:00:15 Welcome back Speaker 0 00:00:16 Ministry of hemp podcast. This is Tuesday, it's a wet day. And as I sit here recording this, I have no idea what has happened with the election yet, and I'm not going to lie. I'm a little nervous. I voted by mail. I didn't see a whole lot of people in line today. So I think a lot of people in Nebraska also did, but I am a little anxious and I'm taking my CBD today to help me stay calm, collected, and you know, head in the game. I hope you guys all had a chance to vote. I hope you're not as anxious as I am, but if you are, it just so happens that CBD is great for election day anxiety, as well as a lot of other types of anxiety. But we're not here to talk about that today. We are going to talk about CBD, but we're going to talk about the marketplace. Okay. Speaker 1 00:00:56 As a whole today, Speaker 0 00:00:59 I'm talking with Connor Skelley. Speaker 2 00:01:02 Um, my name is Connor Skelley and I'm the marketing director at Brightfield group. Speaker 0 00:01:07 The Brightfield group is a marketing group that sports, the most comprehensive data in CBD and cannabis out there today. They've been tracking this market pretty much since its birth, which as you'll hear has been pretty exciting for a guy like Connor. Now there's still a lot to learn, but just like any other product CBD cannabis is sold to people and you got to market to people. It's a very cool conversation about the state of the cannabis market today, dealing with COVID the election and whatnot and what it's going to be like next year. Here's my conversation with Connor Skelley of the Brightfield group. We opened with some discussion of 2020, the cannabis market Speaker 1 00:01:53 Zooming out over the, over the course of this year, this very long year. Yeah, Speaker 0 00:01:59 It has pretty long hasn't it Speaker 2 00:02:01 It's been a pretty long year. It's the same amount of days as last year, but it still seems a lot longer. Speaker 0 00:02:06 I don't know if that's true. Let's to be quite honest at this point. Speaker 2 00:02:10 So what is, what has happened to a lot of these, these CBD brands is they've had to significantly adjust their marketing strategy and their digital strategy and how they go to market. When, when COVID hit across most of the United States in March, these brands who were predominantly in brick and mortar sausage, significant declines in sales. Yeah. Just like everybody, right? Yeah. So not just, not just with them, but everywhere. And even, even online first CBD brands. Um, you know, they saw it too as consumers and, um, just people across the country were evaluating their budgets. Many people were getting laid off. Um, it was just a tough economic time for really every sector and the ones who were able to adapt very quickly or those online first brands, the ones who had a strong DTC model in place already. Um, the ones who were able to who have, are even setting up strong marketing channels online, where everyone was just spending, um, everyone's just online even more. Right. Right. And so over the course of the past six, eight seemingly a hundred months, um, a lot of the, these, these, these brands who, um, may have had strong distribution networks able to get into brick and mortar very quickly, um, they are now adapting, um, strengthening their D to C models, trying to play catch up, um, in the, um, on their digital marketing strategies. Speaker 3 00:03:38 What, so you've been working with a lot of these brands. I'm guessing you guys, you work in strategic data and insights. I'm looking at your website right now. It's a good looking site, by the way. Thank you. And it's coming from a guy that helped people with broken websites. So I appreciate that. What kind of, what, like, what is the strategy when something like COVID hits? Cause it, you would think most, a lot of people would think, well, you said brick and mortar stores have had trouble, but online brands, what's the problem. There, there should be fine. Right. I mean they're online and CBD is the hottest thing in the world. Is, is it still as hot as it was? Is it just COVID that is pushing this stuff back right now? Or are there other things that are causing issues as well? So one of the larger Speaker 2 00:04:23 Things, um, in, in the CBD industry was price compression. So in Q1, a lot of, with the steep decline of, um, hemp going down, you know, it's going down and down more and more, um, CBD brands wants to be able to reach more consumers by doing, you know, 30, 40% price cuts across their entire portfolio. And so seeing that in Q1, a lot of people not, you know, no one knew that COVID was coming. They saw significant revenue declines, even though a lot of that sales volumes still remain relatively strong going into Q2. Um, so back in, back in July, we reforecast it, um, our USCBP market market sizes. And that was one of the biggest contributors to it was that even though sales volume was still going strong, um, the CBD brands were adjusting their pricing strategies and the pricing models and it just brought everything Speaker 3 00:05:21 Right. Which good for the consumer, but scary for the actual brand. Speaker 2 00:05:26 Right? Absolutely. Yeah. It makes, you know, revenue targeting or revenue forecasting CNH significantly harder to do. Sure. Um, and it, it just makes it much harder that situation, um, you know, in Q2 was it, it just made significantly harder to like predict for the future, even like some of the top brands who are, um, who were performing really well, uh, last year and early this year, um, they're, they're in a tough spot. Speaker 3 00:05:50 Do you think that this is something like the price that we've seen the declines? Because I have seen that through a lot of brands have drastically been cutting prices. Do you think that's something that stays when things start to rebound? Is this going to become the new normal? Because it does seem like, to me just dealing with a lot of people that have questions about CBD and brands, you know, CBD brands and whatnot, it seems like the biggest entry way, like blockage is price. And as price comes down, that seems to get more people buying it and checking it out and helps more people. Do you think prices stayed down after this? Is this a new name? Speaker 2 00:06:27 Yeah. Yeah. Price is presence. Should roughly stay the same. Um, if not go lower on, on some of those, uh, products that are more easily available to produce like capsules, for example. Um, and like, you know, there, there have been a lot of brands doing, um, big awareness grabbed, you know, from a marketing standpoint, um, being able to do these large awareness grabs just to get consumers in the top of your funnel, giving away free product for, you know, 30 days or whatever it is, uh, for a 30 day supply. And, um, just a way to get those people in at a relatively low cost, um, ha has been really popular. Definitely I'm sure. And, and what, what we're seeing in our data is consumers are, you know, they cared about price for a long time, right? Like pricing and education have been, had been some of the top things. Um, and what they look for in brands is trustworthiness and high quality products. And like that is now quickly becoming table stakes. And so if, if that's the standard for a CBD brand, how else can you further differentiate yourself? And so that's where we've seen a lot of these online first brands over the last few months, really try to differently differentiate themselves, um, and you know, through, through the marketing. Sure. Speaker 3 00:07:47 So who comes to you? Who do you work with? Like what kind of brands you look at? Like big, huge brands, little brands, all kinds of brands like who is coming? Speaker 2 00:07:55 Yeah. All kinds. I mean, we work with many of the top CBD brands in the space. I mean the top cannabis brands as well, ones with, with CBD products. Um, and we've, we're, we're hearing it from all angles. Like the, the top brands are experiencing challenges, surely like, you know, prior to COVID we were tracking 3,500 roughly CBD brands in the, in the U S alone. Wow. So that is, I mean, any industry like that is due for like a shakeout, right? Like you can't have a healthy industry with that kind of saturation. Um, so it was due for a lot of these small brands to kind of get, um, to, to leave, uh, and COVID accelerated that significantly. And so the ones who were able to, the smaller brands who were able to stick around were the ones that were often online. First, the ones that were brand first, the ones that were customer first, um, consumer centric, they were, they were thinking like, like a real company. Sure, sure. Where at the end of 2019, or even just like at first, when the farm bill got passed in 2018, like you just had a lot of bad actors in the space that were just trying to sell this product. Um, and a lot of times it was just olive oil. Um, so, so that, now that we're kind of over this, like, um, like this we're past the curve of disillusionment, um, we're kind of past, or we're passing sort of this like massive, Speaker 3 00:09:24 You say that like the bubble has burst. Would you say that like, I mean, just like any other marketing aid gets huge and bubbles up, everybody wants part of it. We're all going to get into those bad actors as good people and then bang it pops and you do shed a lot of those bad actors because they go, well, what's the point right now? You also sheds unfortunately, some really cool people who just couldn't survive, but ultimately it does seem like it's better for the business, right. Speaker 2 00:09:50 Ultimately yes. Right. That that's, um, ultimately overall for the industry, it does strengthen it. Uh, and this was, this was going to happen anyways and COVID just accelerated it where another, another possible consolidation point or another sort of come to maybe come to Jesus moment for the CBD industry will be when the FDA, uh, provides more guidance on specifically ingestibles. Um, because then that will, that will shake up the space a lot more. And they have, since you accelerated their guidance a bit, um, which is, which is promising, especially for a lot of these large CPG companies that are holding out to make a stronger decision. Um, but once those companies come in, uh, they're going to be looking at brand acquisitions. They're going to be looking at doing their own product innovation. And to your point about our, to your question around, you know, what else has happened this year? Like innovation did not slow down. Companies are launching new products. They didn't ever, um, adding in like minor cannabinoids into products, trying to find new ways to position. I'm thinking much more strategically about how they can get in front of different types of consumers for different needs States that really, um, that didn't slow down at all as a result of COVID. Speaker 3 00:11:01 So what's hot right now. Like you said, like there's all kinds of new innovation. They've been forced to innovate basically because there's so many companies what's hot right now. What's the new hot cannabinoid, if you will. Speaker 2 00:11:13 It's kind of the, the biggest one. Um, it's, you know, w w with all the, with all these cannabinoids, the, the jury's still out on how conclusive the sciences around all of it, the CBD brands, you know, they've been very careful about making health claims and that's kind of the biggest number, one thing that you shouldn't do. Right. Um, the good ones have been very careful about, Speaker 3 00:11:33 And there's plenty of bad ones that have not been very careful about. Right. Speaker 2 00:11:38 And, you know, it was CBN it's, um, it's being positioned for sleep more and more. It does have, um, it does have properties that, um, alleged to help with insomnia and in overall sleep issues. Um, so various brands have launching products, um, with CBD and CBN, with CBD CBN and melatonin, um, to further use those kinds of functional ingredients, to not only help position a product when people are, you know, they have that need state of, I need to improve my sleep and they go out and find that product. Sure. Um, melatonin can help with that. Um, but now we're seeing more of products with just CBN and CBD. And so they're taking out that functional ingredient from it. And now just sort of strengthening the positioning of CBN as a potential sleep aid. Speaker 3 00:12:26 Yeah. I've seen a lot of those. I've actually talked to a few companies that are really pushing CBN, and I've got to say, I really like it personally. I found a couple that work really well. And I found a couple of that didn't do anything. So, I mean, you gotta look it up. Speaker 2 00:12:37 No, it goes right. And, and, and kind of getting at that point around like trial, right? Like trying out different products, brick and mortar is fantastic for that. And that's where a lot of these innovations have. Um, they have kept launching and I expect that a lot of those innovations will ramp up faster as brick and mortar opens back up. But definitely, um, because that's, it's a great Avenue to do trial packs, um, for our customers just to grab a quick thing that may be on sale, um, for them to try out. And, um, we're starting to see that more in the earliest channels that we saw that in, um, during COVID was like convenience and, um, the C stores and, and, uh, gas stations Speaker 3 00:13:22 Before we go a lot further with this. Tell me a little bit about before we go a lot further with this. Tell me a little bit about you guys, about what you do at the Brightfield group. Like where are you located? How do you find clients? Do they come to you? What do you guys do? Exactly? Speaker 2 00:13:36 So, uh, we are a, um, market research firm and, and consumer insights firm. And what we do is, um, the core value of our business is our ability to implement a multi-source methodology, to get as much information around emerging markets as possible. And so with CBD and cannabis, um, we have been able to leverage multiple sources. So on the research side, you know, doing the, doing the desk research, doing, um, the modeling out for market forecasts and, um, talking with doing various in-depth interviews, uh, with retailers and brands and manufacturers and everyone across the supply chain, as well as, uh, um, partnership partnership network with various brands. So we can understand, um, sales a lot more. Uh, and then on the tech side, being able to, um, do digital menu audits, uh, across, across retail, uh, social listening, um, our consumer surveys integrated with social media. So we can better tie usage and attitudes and psychographics to, and product usage to, uh, actual social media behavior. Um, so taking all of these inputs and using a research team and a team of subject experts to look at this and be able to provide the most robust view of the industry possible. Speaker 3 00:14:58 So why strictly cannabis? You guys, I mean, you guys are obviously marketing nerds. I can tell, by the way you're talking Speaker 2 00:15:06 This, this approach to research works really, really well in emerging markets when you just don't have the data elsewhere. Speaker 3 00:15:14 That's exactly what I thought you were going to say. Like, this is a pretty much a baby market. I mean, we now have about what five, eight good years of marketing research on this basically. Does that, is that more difficult or is it easier to deal with what, wait, what do you mean? The fact that it's so young, is it easier because you can see it and track it from its birth? Or is it more difficult because you're not looking at something like, I don't know, pork belly futures or something, you know, that have been around since both before the dust bowl, you know, Speaker 2 00:15:45 It's a bit of both, right. It's, it's extremely difficult because you don't have the traditional data that you would to track say general food, like beverage companies or beverage industries, right? Like you don't have the, the Nielsen data or the Mintel or the spins data that has been tracking this stuff in store for years. And then after a few years, they'll put it into their consumer surveys. And then you finally start to get more consumer data about that. You just, the time hasn't happened sure. First to get that. So our approach to it is collecting as much data from as many sources as possible, um, and creating a larger picture that way. Um, and for markets like CBD and cannabis, that it really is the main way that you can do it because you're, you're gonna miss out like point of sale for CBD, for example, like a lot of it happens online and your huge data gap there. Right. Uh, a lot of it happens in like independent pharmacies and so like, they don't have a lot of them don't have the point of sale infrastructure. Yeah. Speaker 3 00:16:42 A lot of them are dealing in cash because they don't even have credit card like usage that they can work with right now. So Speaker 2 00:16:49 Exactly. So, um, so that's, that's our approach, uh, to tracking these markets. Um, and consistently we were the company that had originally predicted, um, the CBD boom in 2019 and like, well, before the farm bill was passed and that it was all under the, the hypothesis that the larger, you know, the Walgreens and the CBS's of the world, they're going to see the opportunity they're going to want to get in. And we did see that, um, you know, at FDA COVID, those are our big blockers to it. Um, but our, you know, the way that we approach this stuff, it's, it's worked really well. Speaker 3 00:17:28 Let's take the best case scenario, call the, gets cleaned up. The FDA goes, all right. We figured our crap out. Here's how it works. And they spell out the rules. What is the next big thing for CBD for cannabinoids? Speaker 2 00:17:41 Well, this has been going on for a couple years. Um, maybe even more than that, it's such a large industry looking at, well, first I'll I'll, I'll, I'll look at CBD and where it's being used as in being positioned as just an ingredient that can fit into all different types of categories, food drink, capsules, tincture, and that happened, right? Like the CBD brands. Um, they've, they've done a very good job of creating robust product portfolios around CBD as the category expands. It will be, and more of these larger players get into the space, um, ingredients companies, CPG companies, um, it will continue to be used as an ingredient to focus on wellness positioning. Right. Which is, which is a big topic, right? Like wellness is a huge category. Something like $4 trillion is the global wellness market or for anything Speaker 3 00:18:40 It can mean like anything Speaker 2 00:18:43 From like spas to like my Fitbit to CBD. Right. Um, and so where, where I see this going is these companies will begin to use CBD more and more in a wellness positioning and really targeting those need States of consumers under for many companies where it makes sense for their brand under a wellness umbrella. And, and there's a lot that you can do with that, right? Like there is, um, a lot of these brands, um, moving more and more into the wellness space because there's only really so high. You can go, um, for like a growth potential in CBD, unless you want to end up like crate them, you know, in a gas state, in every gas station. And there's going to be, there's always companies like that. Right. There's always companies that they stay in their lane, they know what they're doing, and they do it really well. And there's nothing wrong with that. Um, and so, and there's a lot of companies out there that want to continue to grow. So you think Speaker 3 00:19:38 The growth though, is moving into more of like a, a wellness lifestyle type situation, as opposed to just a tincture that you take to help you sleep, or a tincture that you hope to take, or things Speaker 2 00:19:48 Becomes more lifestyle related. Yeah. Companies will start to, and not just CBD brands, right. Other companies that, that want to enter this space, they will begin to look at what are those other tangential products, lifestyles, services, things like that, that fit into an overall CBD consumer. So what are you looking at? Like what kind of things do you think, like what, like recovery drinks and a protein, those are happening now, for sure. Um, you know, to back to the point around innovation, um, there's been a ton of like beauty products, like beauty and skincare has exploded this year. Um, and Speaker 3 00:20:27 Cause no one can go out, we can't do anything. Why do we need to be so beautiful here, man? I stopped cutting my hair. Even I was like, ah, screw it. Speaker 2 00:20:37 And so we've seen it like in the beverage space has been really big. Again, the growth of it is, is kind of artificially constrained by the FDA guidance right now. Um, but uh, all these different kinds of positionings, um, focused towards recovery, focused towards energy, all of these kinds of like aspirational needs States that consumers have, um, CBD brands and other companies are getting better and better at starting with those needs States and then figuring out what products, how do, how do my existing products meet those needs? And if they don't where, you know, this will be going in the next year, two, three years, um, they'll say, well, what other products can I create? Who maybe what other brands can I partner with, um, to further create that experience for our customer. Speaker 3 00:21:27 That seems, and I don't know, I don't work in market research, but I do feel like I've seen a lot of these companies that are marketing to athletes or to weekend warriors. And that seems to be where a lot of this is going like gym culture and health culture like that, where, yeah, it's, it's just part of the deal, you know, like you have your drink, your special drink and you get your CBD and it helps you with your muscles and whatnot. Is that the way to go or is that going to get played out real quick? Yeah. Speaker 2 00:21:59 Not every brand is going to do it. Yeah. You know, um, there's going to be a lot of, there's going to be a lot of brands that, you know, they, they perform really well in pharmacy. Right. They have a, when you say positioning for their brand, what's that Speaker 3 00:22:12 You say they performed really well in pharmacy. Like how, how do you mean like full on like in a pharmacy like wall, you know, Walgreens type setting Speaker 2 00:22:20 Your Walgreens, you know, they, they may have whether it's their entire product portfolio or the company has created a separate brand geared towards a pharmaceutical audience. Um, there, you know, there are many companies that are moving in that kind of direction where they, they, they find that they could be channel driven and then so they'll create a brand position or products differently around that specific channel and the consumer behavior on that channel. Fair enough. Um, and so that, that's just one example. There will be a lot of brands that will continue to move more into this, like wellness or active or these other kinds of positionings. Um, it will just kind of depend on how they want to grow as a company and where their current, where those overlaps are with their current consumers and their prospective consumers. Okay. So let's play, I'm a CBD Speaker 3 00:23:07 And I come to you. It's been a rough year. Oh, COVID is killing me. What is the worst mistake Speaker 2 00:23:13 That I made this year Speaker 3 00:23:15 As a worst possible thing that you've seen brands doing in your opinion, I want to go the opposite side of as opposed to like, here's what you should be doing. What's the worst trend you've seen Speaker 2 00:23:25 Ignoring digital really like altogether ignoring, like just saying, nah, we're just all we are Speaker 3 00:23:32 Brick and mortar. That seems insane. I can't believe anybody's doing that. Speaker 2 00:23:37 And this doesn't just apply to CBD. This applies to coverage in general. Like there have been some, um, a lot of companies spending more money on social media and social listening tools. There've been companies that are spending more on, um, you know, on market research and things like that. Cause that's what you do when markets sound is you need data to back it up. Uh, the, the people that aren't able to quickly meet their customers to where they are, um, are in a lot of trouble. Yeah. How do so? And they come to you, I'm struggling doing that. I'm having so much trouble. What do I do? What, what do you say to these clients that come in? They're like, I'm just screwed. I don't know. I'm screwed. It's our data. You listened to us. Um, so you know, CB brands, for example, you'll come to us and say like we're having, we're having, um, we're steadily losing sales. Speaker 2 00:24:28 You know, we, we don't have a problem getting people to come to our site, but they don't convert or things like that. Um, then we could help them, uh, understand who their core consumers currently are and everything about them from how they're using those products. So, you know, basic things, demographics, usage, attitudes, all that. Um, but then also help them understand, well, how are they talking about this stuff on social? What's the context in which they talk about these things on social? Um, what are the, uh, what are the different points in their journey that you can continue to educate them? Cause that's very important. What's the right way to educate them for your brand and the brand direction that you want to go. There you go. Yeah. Because there's, Speaker 3 00:25:09 You can tell them, but there's also a right way to tell them these things and a wrong way to too. Speaker 2 00:25:15 And especially early on, it's just kind of like this buckshot thing where it's like, we're just going to put this out and kind of see and put it out in a bunch of different places and kind of see what happens. Right. Speaker 3 00:25:28 We'll tweet about it. Well, we'll talk about an Instagram, whatever, you know, but God, there's so many, like you said, there was 3,500 a year we're tracking and they're all doing that. It just seems like Speaker 2 00:25:38 At first we talked a lot about extraction and then we talked a lot about the kids. Speaker 3 00:25:44 Like what kind of oil are they using or what kind of pill is it or what, and then we talked about specific things like, well, this product will help you sleep. Or this probably CBG is a new one that we're learning about, you Speaker 2 00:25:55 Know, is it that differentiation Speaker 3 00:25:58 Where everyone's good at? Like you had spoke earlier saying CBN like seems to be popping up, is CBG doing something similar? Is that coming up Speaker 2 00:26:05 And do you think definitely is, do you think that differentiation is because of where we're at? What's that, Speaker 3 00:26:11 That differentiation, is this also just because of where we're at, everyone is trying to survive right now? Speaker 2 00:26:15 Carbon niche. Yeah. I mean, I would say it's especially with like CBG where the positioning on it, isn't a hundred percent defined. Right. Speaker 3 00:26:24 That seems like a really tough one right now because it does, we know what's a thing, you know, we just don't test it to know what that thing totally does. Speaker 2 00:26:33 Right. And that goes with like all of it. Right. Um, but to me, the, the positioning on CBG has always kind of been more wellness. Okay. Um, which like to the right consumer, there is nothing wrong with that. If you're able to business your product of like, this has enhanced wellness features or, um, or properties, you know, that'll be music to their ears and those products will perform well with those consumers. Um, so I think that's kind of where that's one of the areas where the industry is advancing right now and how they're they may have a tough time, um, or they may not need to position their products any differently than they do now. But if they want to be more innovative in how they're positioning those products, a lot of them are using cannabinoids to do so, especially as the cost of hemp decreases. Um, I'm assuming, and I'm guessing that over the next year or two years, it's gonna become a very complex like brand and consumer targeting space. Right. As you Speaker 3 00:27:34 To drill down into this and decide like, and again, not making health claims, Speaker 2 00:27:38 But, uh, CBG helps Speaker 3 00:27:41 With X or it's really good for Y type of person Speaker 2 00:27:45 You're going to start to get into more, very Speaker 3 00:27:47 Much directed marketing to that. Whether they're athletes or they're senior citizens or they're kids with anxiety or something, Speaker 2 00:27:55 You know, what do you think Speaker 3 00:27:57 Next year? What do you see as like, Speaker 2 00:27:59 Again, we're forecasting here? No, one's saying like, go bet on what he says, Speaker 3 00:28:03 It's folks, you heard it here, you know, there's your hot tip about like, what do you, what do you see trending up next year? Speaker 2 00:28:10 Well, um, with the FDA guidance, likely getting figured out by middle of next year, um, that's gonna, that's going to open the flood Gates, Speaker 3 00:28:23 Like food and beverage, you think like more than anything or what, or do you think it's going to maintain a larger business in the tinctures and pills and whatnot? Speaker 2 00:28:33 I would think you've got companies like, there's no way Coca-Cola, isn't just waiting for some FDA, you know, so they can go, boom, Speaker 3 00:28:43 Gatorade. We put it in diet Coke. We put it in this, you know, I mean, I would guess that. Yeah. Speaker 2 00:28:49 Is, I mean, just massive take that new product from Pepsi drift. Well, right. Oh, I don't even know what that, on that, um, it's this it's a sparkling beverage, uh, that has like calming properties in it. There's no CBD in it. Um, there's no CBD, there's no hemp, uh, in that product. Um, but that's definitely where I see these companies going do is they're going to use their existing. Yeah. Like their, their brand prowess, their distribution prowess. They're going to use all of this to really target after those needs States of consumers. Right. And they're going to do it significantly better than a lot of these CBD brands have. Now a lot of those top CBD brands, um, they have done extremely well on it and they'll some of them, you know, they may be looking to be acquisition targets. They may be, um, want to still, you know, compete against all those big CPG companies. And they very well could, um, it will be a very brand centric space. Speaker 3 00:29:54 Do you think you, you said like, or next year, sometime when FDA fingers crossed the FDA figured us out and gives us, gives us rules for this cross next year happens. Yeah. No doubt. Like, well, I'll believe it's there when we get there friend. Okay. But as soon as these FDA rules come in and you start to see major players come in, is it going to turn into like what we see with microbrews getting famous and then getting purchased by like Coors and all of a sudden it's like, yeah, they still maintain this, you know, type of beer, whatever, but it's not really them anymore. It's is that what's next for these companies blow up, get acquired, make your money start a new company. It seems, that seems to be what happened in, in brewing in the United States. As beer got more and more popular, microbrews got more and more popular. The idea was go get bought. That seems like the next frontier to me, for a lot of these CBD CBG CBN companies get acquired. So now you're still your company, but it's your company CB, you know, CBD in Gatorade for example, or something. Speaker 2 00:31:02 You know, I, I think there's, there's definitely a lot of brands that they want to be acquisition targets. Right. You know, there's a lot of those founders, they've, they've put in a lot of the work for all these years and they saw the space, um, moving this direction and they want to get acquired by Pepsi. Right? Like there's nothing wrong with that. Um, and they should absolutely make sure that they have a strong brand and a strong connection with their consumers. So then it's an easy, it's an easy sell to them. I think there's also a lot of, a lot of these top brands. Like aren't going to want to give up their seat. Right. They have very established relationships with consumers. Like I said earlier, trustworthy high quality products are some of the top brand descriptors that we get from consumers. And a lot of those top brands, you know, they, they rank highly for those descriptors. And so when you bring in another brand, say like a Coca Cola or Pepsi that have strong brand affinities across a wide range of consumers that the jury's still out on, are they going to be trustworthy on a CBD side? Yeah. Speaker 3 00:32:06 I th that could, it, the exact opposite could turn a lot of people off that are into this sort of wellness, you know, ideal. And they look at major companies like Procter and gamble getting involved, like that's scary, I'm out, you know, like, uh, not touching Boulevard got bought by Coors, for example, Boulevard, brewery, and people, just a lot of people said, I'll drink something else. Thanks. Speaker 2 00:32:26 And on that same, that same token, it could just strengthen the relationship that those consumers have with their existing CBD brands. So, you know, over the past few months, we were starting to see brand loyalty, grow a bit more brand preference, girl, a little bit more across different attributes and descriptors. And there's, there's a good amount of evidence to show that CBD consumers, they may want to stick with their current brands. Even if a larger company enters the space. Speaker 3 00:32:51 It does seem like we're in a space right now with CBD, where again, we don't have a lot of government oversight and so it can be hard to find good quality CBD. And when you do, yeah, people go, that's the one, I don't want any other one. I want that one. I'm sticking with it. And that can also be good and bad in the sense that it's like a company goes out of business or what do they do? Maybe they go, well, screw it. I'm going to try something else then, because I can only trust those one guys. Is there a danger there of when this starts to get regulated? I mean, I want regulation. We need regulation. If nothing else that we can see these people are doing it, right. These people are doing it wrong. Do you see any sort of day of reckoning coming? If you will like an Armageddon almost that is going to shake out like a lot of these companies and the stronger it's going to survive and the others will just go into the next wild West, whatever. Speaker 2 00:33:51 I think a lot of that has already happened actually with last year. And COVID accelerating a lot of the, you know, uh, a big shakeout, um, uh, a lot of that has already happened. And I think the top players will continue to strengthen, even though there's, uh, you know, across different channels, like independent pharmacies are online are still like high they're, highly competitive. Right. Um, the entire industry is highly competitive, but there are certain channels where, you know, top 10 brands could look very different. Um, yeah, definitely in a year from now. Um, so no, I don't, I don't think there will be this kind of reckoning, um, in that sense, but when these CPG companies, what these, see what these brands should be doing now is using this time before FDA guidance wisely. Like that's been our, a big talking point to CB brands that we have had here. Um, it was like use this time to your advantage, continue to build up a strong brand, continue to develop, set the foundation for long-term relationships with your customers, listen to them, meet them where they are. Um, and, and you'll be well set up to effectively compete or be ready for an acquisition target. Speaker 3 00:35:04 So it's still a good time to get in the business. It's not as scary as we all thought, because I honestly, I didn't think you were going to come in and be like, Oh, doom and gloom. Good Lord. But it's, it's scary and a little more complex right now, but would you say still a pretty good time to get into the business if you're going to do it right? Speaker 2 00:35:23 I think so. Yeah. I mean, I, that, we're, we're seeing a lot of, a lot of bounce back from Q2 and I definitely want to acknowledge the hardship and a lot of the challenges, all brands, uh, and especially the brick and mortar ones have faced over the last year. Sure. There's you absolutely have to, you can't, you can't negate that. Uh, no, of course that is we're progressing, you know, in, into 2020, 20, our, uh, through 2020 and into next year, uh, you know, economies are opening back up. Um, and we're seeing in Q2, we saw a steep decline in new users entering the category, definitely compared to last year. I'm sure we're starting to see that number come back up and ha and the, those that are heavy users are, is, has been steadily decreasing since last year, or, sorry, steadily increasing. Since last year, Speaker 0 00:36:20 I was going to say like, this year has been so awful that I've needed my CBD more than ever. Speaker 2 00:36:26 Yeah. And it was, we started asking questions, um, related to COVID to our, to our cannabis and CBD respondents. Um, and if Q1 and the most recent data that we got showed that like 75% agreed that this helped them through the pandemic. Definitely. And, um, so that, that usage continues, um, new users are coming back in, um, and close to 50% of respondents are saying that they're starting to purchase their CBD, um, in store again. That's great. Yeah. And so like, what's also interesting is yes, they're starting to purchase in store again. Um, but we saw it was something like roughly like 20, 22%, I think in Q1 purchased online, it more than doubled to Q2 purchasing online and that's continued to stay strong. So that's going to keep being, it's going to continue to be a strong channel for, uh, for brands. Speaker 0 00:37:27 Awesome. This has been fantastic. And it's not something I really get to talk about. Usually we're talking about processes or we're talking about quality, or we're talking about this cool cloth that could replace cotton someday, who knows. And it's really interesting to talk about this from a market perspective, because I mean, you wouldn't think about it so much because it is CBD and it seems like the separate thing, and it's still new whenever, but you have to market it just like anything else. And you're selling it to people and people are going through a tough time right now. And that means it's going to be a tough financial time for all kinds of markets and whatnot. Huge, thanks to Connor for coming on the show and giving me a chance to have a conversation that I haven't really had. It, it's amazing that marketing firms really are paying attention to this market because it is huge. And while it has been struggling, it was really nice to hear somebody like Connor, who is deeply entrenched in this with such a positive outlook for what comes next and for companies that are doing it well. And not to mention the fact that he seems to think the FDA is going to figure it out sometime next year, which would be good news for everyone involved. Speaker 0 00:38:46 Well, that about brings us to the end of another episode of the ministry of hemp podcast. I'll have links to the Brightfield group in the show notes. And speaking of show notes, we here at the ministry of hemp believe that an accessible world is a better world for everybody. So you will find a full written transcript of this show in the notes as well. Next week, I promise we're gonna get to that show about Delta eight, THC. I finally have locked down an expert and I'm super excited to talk to him. Not just that I am going to take Delta eight THC and let you know about my experience right here on the show. If you're looking for more hemp news and information right now, head over to the ministry of hemp.com, where we have a Delta eight fact sheet, you can check out to prepare for the episode. Speaker 0 00:39:32 I keep telling you is coming, sorry about that. And we have a brand new ministry of hemp verified seal that we are giving to cool brands that we've reviewed and researched and talked about. So if you see that seal, the ministry of hemp verified seal, it's green, it's really cool. You gotta check it out. You know, we've done the hard work for you, and this is a brand that you can trust. We wanted to do something to help you, the consumer make good choices with your money while we're waiting for FDA regulation, it's a cool stand, but I even suggested we make t-shirts of it. So let me know what you think. If you want to help support hemp education and spreading the word of hemp education, head over to Patrion, backslash ministry of hemp and become a ministry of hemp insider, it gets you access to all kinds of cool stuff like this. Speaker 0 00:40:20 Week's podcast, extra, where I am talking to Connor about how a marketing guy ends up working in cannabis. It's a fun little conversation. And then you get so many other things too, like early access to articles and extras that we don't even put on the site. Not to mention the fact in doing so you are directly helping us spread the word, keep the site alive and keep this show going. Please head over to Patrion backslash ministry of hemp and become an insider today. Learn about does it for me. I'm about to go huddle in front of the television all night and, uh, hope for good news and the election results. We'll see either way, we'll be back here next week and we'll deal with it one way or another. I promise you're not alone. And the good news is there's things like CBD to help you with your anxiety. If you need it for now, remember to take care of yourself, take care of others. I hope you voted because it's your patriotic duty to do so. And I hope you made a good decision. This is Matt balm in the ministry of hemp. Sorry. Speaker 1 00:41:17 <inaudible>.