This week’s Trailblazer is Dave Marino, President of Spirit Leaf Ontario Inc. & owner of over 40 cannabis stores operating under multiple banners including Spiritleaf: winner of the 2021 and 2022 ADCANN Awards for National Retail Brand of the Year.
Questions with a Cannabis Industry Trailblazer
When did you first become involved in the cannabis industry and why?
Shortly after getting married in 2015, my wife & I were traveling across Australia on a working holiday visa when I started to realize the very realistic possibility of Canada federally legalizing cannabis, prompting me to return home so I could get involved with the emerging industry as a longtime advocate for the benefits of responsible cannabis use.
Being a retail real estate broker by trade, my firm Marino Locations Limited had strong connections to the team that was beginning to establish the Spiritleaf brand, leading to an invitation to join Inner Spirit Holdings Limited as an initial pre-IPO investor as well as becoming the National Real Estate Director for Spiritleaf. In this role, I was responsible for securing qualified locations on which acceptable business terms could be negotiated in a hyper-competitive leasing market, allowing for cannabis stores to be opened legally in 6+ provinces from coast to coast. Spiritleaf quickly became the first brand nationwide to reach the 100-store milestone after impressively averaging a new store opening every 10 days.
When my home province of Ontario pivoted from its initial plans of a government monopoly to instead favour a privately owned retail framework in 2019, I subsequently established the Spirit Leaf Ontario office in Toronto, obtained my cannabis retail operator and store licenses from the AGCO to open one of the first hundred stores in the province in the heart of the Bloor West Village neighborhood in which I grew up. Since then, Spirit Leaf Ontario Inc. has successfully opened and/or acquired many additional stores resulting in the current portfolio of 41 locations (and counting) operating under 3 unique banners (including Value Buds & Superette) employing around 300 staff across the province.
What has been the biggest challenge you have faced when working with cannabis companies/brands?
The biggest challenge has been bringing good ideas to life in a way that is compliant with multiple levels of regulation, including federal, provincial & municipal. Those who have been in the industry for long enough are likely already painfully aware of the strict legalities surrounding cannabis marketing, which make it difficult to attract new customers into the stores. Thankfully, there are always creative ways to push boundaries forward whereby the rules will eventually become no more restrictive than for other similar categories including alcohol & gambling, which are more relaxed in comparison.
We’ve already seen progress in certain provincial jurisdictions with the easing of regulations allowing simple visibility into the store from the exterior of the premises, which is a huge step towards reducing stigma associated therewith & protecting the security of the store itself as well as promoting the safety for those inside (staff & customers alike) given the ability to see threats as they approach the premises.
I expect this trend to continue as cannabis continues to become more normalized over the course of a generation (or two) whereby cannabis purchases, consumption & advertising will gradually become more acceptable in society, thereby allowing both traditional & new marketing techniques to prevail while continuing to protect the most vulnerable sections of our population from any potential harms associated therewith.
Another major challenge has been with the inconsistency applied by social media platforms based in jurisdictions where cannabis is not legal at the federal level and therefore very difficult to market given the particular regulations of the platform itself (i.e. Instagram, Facebook, Tik Tok, etc.), failing which accounts can be deleted losing months or years of organic community growth, which is of course very difficult & time consuming to replace.
If you could change one of the current Canadian or American marketing restrictions on cannabis, which would it be?
I think that retailers should be able to more directly support charitable initiatives without fear of inducing the sale of cannabis as a result. Although the Cannabis Act does not prohibit the sponsorship of a person, entity, activity or facility, any such sponsorship cannot be used to promote cannabis and it is prohibited to display a brand element of cannabis. While I understand the hesitation to link cannabis purchases with charitable efforts, I fear this regulation could be preventing additional social good from occurring by companies who are otherwise willing to give charitably, essentially blocking potential support from reaching those in need. This is shortsighted as adults should be trusted to make purchasing decisions that support social responsibility (including those promoted for the benefit of registered charities) in addition to protecting the public from the relatively low documented potential harms of cannabis use (when compared to other substances).
I also encourage readers to add their signatures to petition the House of Commons to increase the maximum THC allowed in edible cannabis products from the current 10mg to 100mg per package. Since the intention of cannabis legalization was to replace the illicit market with a legal one, we must ensure that the regulations allow the sale of in-demand products without having to bend the categorization of such items with confusing semantics. Rather than re-write the rules to eliminate these products, we should be asking ourselves why these products cannot be sold in the first place – or finding ways for them to be sold responsibly. Sometimes, the best way to market a product is to merely find a way for it to be sold legally as we’ve seen customers return to illicit channels as a result of higher potency products being removed from store shelves. The mere news of changes to these regulations would bring these customers back as most would opt to buy legally if given the choice.
In your observation, what marketing techniques or channels have been most effective for cannabis companies looking to connect with consumers?
I think the most obvious answer is the correct one in this case, meaning the best way for brands to connect with consumers is by ensuring that the products they release achieve the desired results for consumers who see the value proposition available to them on a consistent basis. Anything less cannot be relied upon to sustain long term success in a rapidly evolving market where gimmicks or swag do little to impact brand loyalty or the ongoing buying decisions of the core cannabis consumers who are driving the bottom line with regular in-store visits to make larger, bulk sized purchases for consistent results.
Are there any other trailblazers in the cannabis industry that you follow?
It’s inspiring to see what Dave Berner of Cookies has created in establishing not only a global network of cannabis retail stores (including many in emerging markets like Thailand & Israel), but also such a passionate fanbase of those who champion his brands with excitement levels normally reserved for rock stars & professional athletes. From pheno-hunting to branding, design to real estate & celebrity partnerships to new store launch events… Cookies are definitely setting the bar for worldwide cannabis retail excellence & I’m always impressed watching to see where their explosive growth will take them next!
Here in Canada, I admire the licensed producers who are pushing the regulations forward by releasing products that have creatively found a way to their intended audience despite exceeding typical THC limits on a per package basis due to their categorization. There’s no limit to how much alcohol one can purchase, despite the potential lethal harm such a dosage could cause regardless of what form or potency in which it is sold (i.e. beer, wine or spirits). Cannabis should be no different as we would not tolerate having to purchase alcohol in tiny, travel sized sample bottles where many multiple containers had to be purchased in order to achieve the desired effect from this other legal, recreational drug.
I applaud these companies for challenging the regulators since evidence continues to show that anything the legal market is unable to provide will be supplied by the illicit market instead. With 100 mg packages commonplace in many comparable US jurisdictions, I think it’s only a matter of time before these regulations evolve (and reduce wasteful packaging in the process). In an industry where marketing is so limited, the ability to find loopholes such as this may be the best way to the top of a budtender’s recommended product list as one of the few items in store that can meet the needs of a higher tolerance customer by way of a single, economical unit. These products are the hardest to keep in stock regardless of their subjective taste as consumers are more attracted to their ability to achieve desired effects.
What is one tip or piece of advice you would give to marketers looking to enter the cannabis industry?
Marketers must remain aware of the ever-evolving regulations to ensure their campaigns remain compliant at all times. Leverage real relationships with buyers & budtenders to get products onto store shelves & into the carts, hearts & minds of the consumers. Remember the names of the budtenders, managers & buyers to earn trust and mutual respect. Establish what truly differentiates your product from a competitor & don’t underestimate the importance of packaging & format. Don’t assume that a male staff member is in charge as I’ve seen sales reps bypass female managers causing very negative unintended consequences as a result!
Finally…please arrange store visits in advance as one would expect in virtually any other B2B sales industry, as this is generally preferable to the current norm of showing up unannounced & expecting the store manager to drop whatever they’re doing to listen to a sales pitch about your newest drop. This sets the meeting up for success to ensure that attention can be given with the right amount of time reserved for meaningful discussion. Sales reps need to not only know their own portfolio of products but also any competing products & what people are saying about them to justify why one item should be carried versus another similar SKU, including compliant samples (for educational purposes only in accordance with non-material inducement guidelines) to substantiate their claims and allow for subjective feedback, which should be taken seriously to facilitate continuous improvement Be honest and maintain trust with your customers as it is quite possibly anyone’s most valuable asset in this business – once trust is lost, it cannot be recaptured!
A big thank you to Dave from Spirit Leaf Ontario for participating as this week’s Trailblazer! Stay tuned for another interview with a cannabis marketing Trailblazer next Thursday in the ADCANN blog.
