Aaron Morris

As the cannabis industry matures, we are starting to get reliable data. This can help make decisions based on real sales figures and not predictions. 10 years ago, there was only one state with adult use sales (#colorado) and a handful of states with medical seals. Now there is 24 sates with adult use sales and an additional 15 states with medical seals. At the moment #california leads with total seals but #michigan leads with per capita seals. #florida leads in medical seals. #missouri with a relatively small population and only 17 months since they launched their adult-use market, is already in fifth place. Thank you Debra Borchardt from Green Market Report for the financial update. #cannabisindustry #cannabiscommunity #cannabisnews #cannabiseducation #cannabispolicy #cannbislaw https://lnkd.in/gc96gcCh

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Good morning California Cannabis Industry, Today, in the economic evolution of cannabinoids (both cannabis and help), there's one question remaining: WHO WON THE RACE TO THE BOTTOM?  I'd love to hear your thoughts.  

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This will happen to NY if things don’t change. We are headed in the same exact direction as California if NY doesn’t make changes. We are already seeing dispensaries on the COD list. We are seeing farms shut down. People didn’t survive the stampede. 280E is what really destroyed those companies. That’s why rescheduling is so important. All of those illicit shops are going to sink the industry. Things will not get better until ALL of those illicit shops are shut down, 280E is vanquished, people pay their debts, and the ratio of dispensary’s to cultivators and dispensary’s to population is correct. It’s sad to say everyone that gets a license won’t get open and you can over saturate a market with over licensing. I hope we can come up with a formula to fix things. If not things will get worse.

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The cannabis companies that ‘WIN’ in 2025 and beyond will have these five things in common: 1) They understand the scale that they are trying to achieve and their entire operation is appropriately focused based on that scale. -Local companies need to market and connect locally (in an extremely authentic way) while focusing on profitable, sustainable revenue streams that are mostly consumer driven. -Statewide companies need to do the hard math and modeling to understand what realistic growth means for them. Set specific growth targets based on achieveable modeling. Too many statewide brands operate, market and spend like a national brand, and it will cost them in the end. -National brands must focus on lean profitability and maintain a highly targeted approach to their spending, despite a world that may seem like it has limitless customers. 2) They don’t try to do it all. Developing mastery and economies of scale in specific sectors, while building strong partnerships in the rest of the market, is the model for success in the years to come. The great companies from 2025-Federal Legalization will seek out expansion via truly strategic partnerships (and careful aquisitions) while the mediocre companies attempt to do it all themselves. The largest, best capitalized MSOs will be buying up statewide and regional businesse with lean, focused, positive-cashflow operations, which solve specific problems in their infrastructure. 3) They are building a business that is designed for the New World of Cannabis, and the Era of Commercialization. -We aren’t trappers anymore. -Hitting licks can only take you so far. -Weed is a CPG product. -THCA is sold openly online and in gas stations. -D9 Bevs and Gummies are sold in some of the deepest red states. -Weed by mail is probably here to stay. -Mushrooms are legal in various cities and states. -Consumer trust in a brand is the most valuable asset in the industry. No matter their scale, the companies that win in the next five years will integrate themselves into the new ways consumers interact with and purchase cannabis…. (Online, DTC, Low-Dose, Mixed Nootropic, Bev, Smoke Shop/Gas Station, Mass Market, Seshes, N.A. bars/lounges, add-on dispensary licenses) 4) They build continuous feedback loops with their customers. The great brands and companies that succeed into the 2030’s will have a deep, data-based understanding of their consumers at all levels. Brands must understand the buying criteria of the stores that carry them as well as the buying criteria of the consumers that drive sell-through. The very best will encourage a rewarding consumer engagement loop that directly influences operational decision making. 5) They just don’t quit. (In fact, they continue to innovate, pivot, and understand that at the end of the day, their business is change). A lot of cannabis operators will quit in the next five years. In all business, but especially in cannabis, sometimes it’s just about being there tomorrow.

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In the first quarter of 2024, with federal cannabis-reform efforts not yielding any practical changes, Curaleaf made a strategic decision to enter the hemp market. This is a trend we are starting to see. Cannabis can only be sold in the state it was produced and only allowed to be sold through dispensaries (in a hand full of states such as #california it could be sold through a delivery service). Intoxicating products that derived from hemp, are legal to ship across state lines, are available via e-commerce and mainstream retail channels. As well the producers of the products do not need to comply with burdensome licensing requirement and predatory taxation. A lot of politicians say that they support small businesses, but for small cannabis businesses to be able to properly compete, they need to have access to the same distribution channels as #hemp. Thank you Chris Roberts from MJBiz for the market update. #cannabisindustry #cannabiscommunity #cannabisnews #cannabiseducation #cannabispolicy #cannbislaw https://lnkd.in/gJHjPYgG

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I’ve been describing the ‘race to the bottom’ in cannabis as a ‘race to reality’ - but hearing Mike DiLaura (HOD) Ankur Rungta (C3) and Aric Klar (Quality Roots) speak at the • Derek Dickow event this past week had me thinking differently: If we wanted to stop ‘beating eachother up’ and incentivizing a race to the bottom, what would that look like? (In lieu of some kind of corporate price fixing or government mandated minimums…) I think it comes down to three main things: 1) Brands continuing to focus on delivering value with better products, instead of with lower prices. 2) Retailers maintaining price stratification with brand diversity, while running promotions which drive consumers upward vs downward. 3) Retailers choosing not to stock poor quality, whitelabel, here-today-gone-tomorrow brands. We consider Road Trip an important anchor point in pricing for the industry in Michigan. At the top of the ‘economy preroll’ segment, priced between $2-2.50 retail per 1g preroll, we serve as a crucial pricing benchmark which bifurcates cheap, outdoor prerolls at $1-1.50 retail and full-flower indoor prerolls at $4-8. Filling this price gap with dependable, flavorful, quality product has shown a consistent conversion of ‘lowest price preroll’ buyers to Road Trip in multiple retail chains, both to the benefit of the consumer, who is willing to pay a bit more for a better experience - but hasn’t been able to, and the retailer, who achieves more profit per preroll sold. Not filling this segment with quality product exacerbates store-level and industry-wide compression toward a $.25 wholesale outdoor preroll ($.50 retail) and a $1 wholesale full-flower preroll ($2 retail). This shift could cost single stores tens of thousands of dollars on a weekly basis. This type of stratification also creates opportunities for increased retail profit via less overbearing upsells and strategic bundle pricing. While we are commited to delivering the best value to our customers, (and while we are certainly still at the mercy of commodity pricing…) we also hold a responsibility to our retail partners to do our best to preserve their profits. What that means to us is delivering more value NOT by lowering our prices, but by creating better products, producing more impactful marketing, and building a loyal community around our brand.

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Whether you are an avid golfer, runner, pickleball player, or participate in any other active sport, you know that taking care of your body is the key to long lasting and engaged performance. Our consumers continue to choose Entourus salves for both pre and post workout and anytime they are physically active, to lend a helping hand. Our latest blog for the month of June details how to best use CBD muscle cream, how frequently to apply, and how to establish the right dosage for you!

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It is sad to see the state of #california's cannabis industry. Eaze, California’s largest cannabis delivery company, that was dubbed the “Uber of weed,” is shutting down. Eaze is currently “winding down operations” with a “full closure” expected by Dec. 31, according to CEO Cory Azzalino. The company is laying off nearly 500 workers, according to Jim Araby. The failure of Eaze is only the latest high-flying California startup to fall during an economic collapse in the California market, following the likes of mega-retailer MedMen, which failed earlier this year, and Herbl formerly the state’s largest distributor, which shut down in 2023. Big or small, it is very hard to operate a cannabis business in California. We have a big battle next year. Two years ago when Governor Gavin Newsom signed AB 195, that among other things got rid of cultivation tax. The bill includes a clause that if the tax revenue from cannabis, drops for two years in a row (which it did), that the exercise will go from 15% up to 19%. This will be a nail in the coffin for our industry. Join us, to make sure this dose not happen. Thank you Lester Black from SFGATE for the state update. #cannabisindustry #cannabiscommunity #cannabisnews #cannabiseducation #cannabispolicy #cannbislaw https://lnkd.in/gKG6Dqth

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Join this pricing debate I’m having with my brother/co-founder. The deal is our ingredient costs have skyrocketed by 400%. Higher material costs naturally mean higher product costs, but then it got me thinking about our overall pricing strategy. Browniegod’s current shipping charge is £3.90 for next-day delivery. And here's where my brother and I disagree: My view is that we should reflect the shipping costs in the product price. From personal experience, I don’t care what the price tag is until it comes to shipping. Anything over £2 shipping, I won’t buy!  It's a psychological thing — I accept the price of a product, and I’m willing to pay for it… but shipping (no offence to couriers) feels like money gone in the bin. My brother says that he doesn’t mind paying for shipping and would rather see a lower product price. By his logic, he understands that shipping costs money, especially for next-day delivery. As a customer, how much does the shipping cost influence your decision to complete a purchase? #founder #businessjourney #startup

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There are three lessons I’ve learned by experience (i.e. loss, fire, failure) over the last year: 1) As a CPG (cannabis) founder, you should be spending the majority of time on five things. Those five things are: -Selling, and building a better sales process. -Sourcing, and building a better sourcing process. -Innovating your manufacturing process. -Innovating your product offering. -Marketing, and building a better marketing process. 2) All five of the tasks above could be categorized in the same way: as delivering the most value (the best product possible at the lowest price possible) to your customers. 3) The only way to spend the majority of your time on delivering more value is to have well defined processes for your core business. Time invested in developing SOPs that allow your team to run the core business, frees up more time to improve the core business. I’ll repeat that: Time invested in developing SOPs that allow your team to run the core business, frees up more time to improve the core business. If you want to work ON the business, and get out of the weeds IN the business, you have to do the hard work of getting the rest of your team out of the weeds too. Only then will you be able to focus 100% of your ‘Visionary Founder Energy’ (VFE) on The Big Problem and Big Solutions.

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California tax revenue from cannabis has declined each of the last two years from a peak of 2021. (Source:DCC) Where do we expect 2024 to finish? It sure seems to be a broken system, with very few profitable operators. The state is trying, and AB 2223 will be a pivotal moment for the industry. Many brands have given up, and are finding better margins and consumer access in hemp, that allow them to do basic things like make payroll. I voted in favor of prop 64. At the time, I had faith that the state supported profitable industry to boost the economy and provide jobs. I didn't believe they had altruistic motives to improve access to a beneficial plant. I didn't think the mismanagement would be so bad that the industry would already be in a decline 3 years into it. Question: How much tax revenue would we generate for the state if we had low-dose cannabis beverages accessible everywhere alcohol was? How much would we need to tax cannabis beverages to achieve their goal? Allowing adult beverage producers, distributors and retailers to freely sell low-dose cannabis beverages isn't competing for revenue from the dispensary channel. People buy beverages where they already are. Someone ordering a Coke at McDonalds or a Red Bull at a concert wasn't going to buy the same drinks at a grocery store later that day. Please tell me where I'm wrong, or your ideas to fix this decline -

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Wellious sales are up 850% yr/yr right now 🤯🤯 And we still haven’t raised a penny… We’re somehow keeping up with the growth of venture-backed brands and building off of profits that aren’t supposed to exist for a cpg brand at our stage... IMO this is only possible because of extreme product market fit. For me, PMF comes in 3 stages: 1. Demand: Our message/thesis/purpose resonates so much at the awareness stage, which converts awareness into demand and expedites the first purchase and entrance into our community. 2. User Experience: This is the most important part. Once someone decides to take a chance on Wellious, does it overdeliver for them? Product excellence has been my # 1 priority, and fortunately that has paid off. We see insane retention rates on every channel. Consumers being hooked on our product has created a profitable foundation that every new customer adds to. 3. Amplification: Is the affection for a product so great that people have to talk about it? It’s been nonstop how many people (from everyday customers to the biggest influencers in the world) feel compelled to share wellious with everyone from friends and family, to their millions of followers. Having a brand and product that piques interest, overdelivers on value prop, and that people feel compelled to share, creates a virtuous cycle that re-feeds every stage of PMF. While I know how much work and good intention I’ve put into every facet of this brand, I can’t help but feel very lucky that Wellious has resonated in this way.. and allowed us to grow at a rate that seemed impossible for a brand that’s still pre-investment. We’re just getting started :) #cpg #vms #foodandbeverage #growth #startup #founder

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🌿 Despite #high hopes, the #cannabis industry has faced significant challenges. Turns out, it's not as #dope as investors toked it'd be. 📉 The leading player, Curaleaf, saw its value drop from a peak of 💲11.5B in 2021 to 💲4B today, highlighting the downturn in #marijuana stocks. The #market: 💰 Total U.S. Cannabis Market (legal + illegal) is valued at 💲75B, while the the legal US TAM, currently 💲32B, expected to grow to 💲43B by 2027 (source: BDSA) 🗽Just the New York state TAM is a hefty $6 billion cannabis market (and if you've strolled through NYC lately, you'll know it's not just the hot dog vendors adding to the aroma). 🌿 🍺 In comparison, the U.S. #Alcohol Market was valued at $247B in 2021, with the beer market alone at $115 billion, a stark 8x times cannabis TAM. 💼 Diageo, the leader in the spirits market boasts a 💲76B market cap, 💲21B in revenue and over 💲4B in net income. AB InBev, the leader in beer, commands a 💲120B market cap, 💲60B revenue and 💲5B net income. Some analysts believe that if a cannabis leader emerges, it might eventually reach similar figures. A long way to go for Curaleaf and others... 🌍 Besides the US and Canada there's potential in Europe with countries like Germany, Poland, and the UK that loosening cannabis regulations. More are expected to come. The #issues: 💸 Profitability hurdles include prohibitive taxes, with cannabis businesses unable to deduct common expenses, resulting in significant tax burdens despite losses in net income. 🤝 Fragmentation plagues the industry, with no player holding substantial market share, signaling a potential need for consolidation through mergers. 📊 Data on major companies: 📈 Revenue (2023) Curaleaf - $1.35B Trulieve - $1.22B Green Thumb Industries (GTI) - $1.02B Verano - $879M Cresco Labs - $825M 💹 Gross Margin (2023): Trulieve Cannabis Corp. - 52% Verano Holdings - 51% Green Thumb Industries Inc. - 49% Cresco Labs Inc. - 48% Curaleaf Holdings, Inc. - 45% 💼 EBITDA (2023): Green Thumb Industries Inc. - $291M Verano Holdings - $284M Trulieve Cannabis Corp. - $263M Curaleaf Holdings, Inc. - $239M Cresco Labs Inc. - $125M 👥 Total Employees: Curaleaf Holdings, Inc. - 5,650 Trulieve Cannabis Corp. - 5,400 Green Thumb Industries Inc. - 4,561 Verano Holdings - 3,900 Cresco Labs Inc. - 2,760 💼 Market Cap (may 3rd 2024): Curaleaf Holdings, Inc. - $4.17B Green Thumb Industries Inc. - $3.13B Trulieve Cannabis Corp. - $2.33B Verano Holdings - $1.75B Cresco Labs Inc. - $1B Fast forward a decade, where do you envision the cannabis industry? Do you anticipate pharmaceutical companies making their mark in the cannabis market? Could tobacco or alcohol giants venture into cannabis diversification?

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Ep. 6 of paperboy ventures hit inboxes earlier this week... This week's feature --> Winnie Lou Winnie Lou is a clean pet treat brand using only real, whole food ingredients. Products feature wild, grass-fed proteins including bison, boar, elk, and venison. All details can be found in the paperboy newsletter, including: -Overview of investment opportunity -Discount code to try Winnie Lou products -Ability to connect with Winnie Lou CEO Link to subscribe in comments below ⬇ Special h/t to Ashlin Cook. Congrats on all the success thus far! #cpg #funding #entrepreneurship #startups 

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Thanks, Jordan Buckner for your transparency and for sharing this. Our experience has been very similar, if not even more challenging. Every retailer we’ve managed to get into has been through our own sales team’s persistence—spending countless hours on the phone with every store. (2023 alone, we spent $44k on samples sent to KeHE account reps with $0 ROI) We went months without knowing who our new category manager was, and communication from their team has been inconsistent, to say the least. We requested a pack size change and specifically stated that we wanted to sell through our existing inventory first. We asked, “Please confirm if this can be done.” No response. Then, we were hit with $24K in chargebacks because they pulled all of our current product to make the change anyway. While on a call with them recently I referenced that no one ever replied to the initial question about sellout, I was hit with this. “Did your team follow up to get a response.” If you’re not Kraft Foods or The Coca-Cola Company, you’re not important. Does anyone else find this disturbing? What have your experiences been like? Please share! #RetailChallenges #RetailStrategy #CPG #CategoryManagement #RetailSales #ProductPlacement

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“Every sale of THC beverages outside dispensaries robs the state’s cannabis tax fund roughly $6.08,” Caren Woodson, president of the California Cannabis Industry Association. This quote is entirely uninformed and sensationalist. Tax on zero sales is zero, nobody wants to buy low dose beverages in dispensaries and dispensaries don’t want our drinks! The dispensary ecosystem is not built for beverage. Also why do you think people are leaving your hyper taxed weed alone? Could it be you expect to take an extra 6 dollars from your constituents? America is built on finding better ways to do business, do not penalize our industry for leaving a bad relationship. If your market is worthy of THC drinks… improve yourself instead of running to lawmakers to crush us, California Cannabis Industry Association. https://lnkd.in/g2CUAMA7

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