This week’s Trailblazer is Michael Garbuz, Founder and CEO of High 12 Brands, a cannabis-focused Consumer Packaged Goods company with the goal to build and operate premier global cannabis brands.
Questions with a Cannabis Industry Trailblazer
When did you first become involved in the cannabis industry and why?
I started in the industry as a corporate lawyer, so I was doing a lot of work on mergers and acquisitions, public transactions, and corporate financing. Then about four and a half years ago, I started doing more and more work in the cannabis space. We built out the top practice group in Canada at Cassels Brock and started working with companies like Canopy Growth, a lot of the big US companies, as well as a lot of international companies.
Going into the first cannabis files at work, and starting to see a bunch of stuff in cannabis, I got really excited by the idea of actually proving that this could be a real industry and that there was actually more to it than kind of the archaic stereotypes that a lot of our parents’ generation associated with cannabis.
I started seeing pretty early with the companies that I was working with, that the level of products, the brands, the sophistication, especially a lot of the U.S. companies that we were working with at the time that it wasn’t about drug dealing or about anything else and a lot of the stereotypes that I had felt around cannabis, for a long time, even from external places, just started to fade.
As you realized, you know, reading some of the prospectuses and understanding the thought process of all of the companies at the time were medical, so it was interesting to understand all of their ethos and values and mission and vision, we’re all very medically driven. My background was also in biomedical sciences, so it was interesting for me from a law perspective to see that as well.
What has been the biggest challenge you have faced when working with cannabis companies/brands?
I’ve done work across the U.S, across Canada, and globally and starting off one of the biggest challenges is that it’s hyper segmented in terms of regulation. So what might work for a brand in California might not work in Nevada and definitely isn’t going to work in Canada and you know years away in a country like Germany. So that’s definitely one of the biggest challenges, just the segmentation between markets. Everyone knows the regulatory and licensing challenges especially as new markets open up that they go through stereotypically in the first few years and is what Canada is going through right now.
”I'd say the second biggest challenge is not really around marketing, it’s more around education for customers.
So with existing customers, obviously by far, in every single market, it’s the illicit market and transferring all of those customers over and that’s always the marketing challenge. It’s like an insightful thing to talk about the illicit market, but at the end of the day, there’s a $200 billion industry that existed before the legal cannabis industry and that was dealing with poor quality, testing products that weren’t widely legally or practically accessible to a huge part of the global population, not branded, non-delivery methods that people liked, didn’t have the medical research. So we’re going to have quite a huge industry as those markets transition over as well as we’re developing new and innovative ways to bring new consumers in and to sort of have existing consumers find new products that they like.
But that’s obviously the biggest marketing challenge. You know who your consumers are to some degree and it’s how we attract them over with products, brands, value, proposition, convenience, and high-quality and consistent products that are going to bring them over from the black market.
If you could change one of the current Canadian or American marketing restrictions on cannabis, which would it be?
If I could change one, I would say probably the packaging and just sort of how you’re allowed to deliver products in packaging. At the end of the day, we view the industry as consumer products, goods industry, or CPG industry, and ultimately are consumer packaged goods rather and the packaging is a huge part of that component.
”If you look at any other CPG industry, you recognize brands based on how they present themselves to consumers.
When you’re looking at different options of what to put flour in, whether it’s going to be like a glass jar, plastic jar, you’re obviously looking at the cost of goods sold and the dollars, but from a consumer perspective, when you’re buying, and selling premium and you’re opening up a beautiful packaging, whether it’s a new sweatshirt or a new cell phone, that whole experience from the second that a consumer hears about your brand until they finish using your brand, you want to control as much of that as possible.
Ultimately, I think from an education standpoint and a marketing standpoint we want to have something that is attractive for people who are already consuming today and then something that people who aren’t consuming today can look at and say that might be a product for me.
In your observation, what marketing techniques or channels have been most effective for cannabis companies looking to connect with consumers?
Yeah, undoubtedly it’s, and this is global for all recreational markets, it’s connecting with the key influencers in the purchasing decision, which is usually someone sitting inside of a retail store or dispensary. So whether it’s California, where we saw, with Origin House, that brands ultimately were going to live and die by their ability to communicate effectively with retailers.
”Having your own sales team, having your own marketing channels, owning every interaction that a consumer has with your brand over the years, it became more and more important to maintain shelf space.
So I think that’s really the most important area to focus on. Given the regulations, just general awareness type marketing is a lot more limited than possible, but with COVID and the digital environment that we’re in, we definitely see a lot of opportunities. So we’re focused on a few of those and as well as a few conversion tactics online.
Are there any other Trailblazers in the cannabis industry that you follow?
Yeah, I have a lot of respect for Trang Trinh and what she’s doing with TREC Brands. When we had started High 12, we thought that we were the only ones who were thinking in that kind of way, but it was really validating to see groups understand really early on that branding was going to be really important for the long-lasting customer revenue and customer margin.
So I think that she’s always someone that I’ve really admired and I think together, we can open up a lot of these opportunities from a brand perspective outside of Canada. In California, there’s a ton of brands that really take what I think are kind of the two most important pillars for cannabis, which is a love of product and culture and mending the two. We’re seeing a lot of really good kind of culturally relevant brands that are also really passionate about cannabis.
There’s a handful that is, like Sherbinskis is doing a really good job of it right now, Old Pal on the discount side is doing a good job at it and there’s a lot of brands that are starting to play in Nevada and California that are starting to kind of rise to the top, so to speak and I would say a lot of those groups who are passionate about those kinds of things are doing a really good job and I have a lot of admiration for them.
I’ll also give a shout out to a good friend of mine, Chris Jones, who worked with me at Origin House. He is going to have a handful of retail stores open in Ontario over the next few months, which will be really exciting and I’m sure he’s going to crush it!
What is one tip or piece of advice you would give to lawyers looking to enter the cannabis industry?
It’s not all about the data, although the data is really important. It’s an industry, unlike a lot of other industries where you can’t rely on years and years of market data, but at the same time, if you’re creative and can look at both where things have happened in other markets, how things are shaping out in Canada, and then have some point of view about where things are going it’s a really fun and exciting opportunity. But it’s not without taking a step left and taking a step right, taking a step back and then getting to take a step forward.
A big thank you to Michael for participating as this week’s Trailblazer! Stay tuned for another interview with a cannabis marketing Trailblazer next Thursday in the ADCANN blog.
Interested in working with one of these talented cannabis marketers? Check out our Agency Directory for a list of all the agencies that specialize in working with cannabis companies.
Last Updated on September 3, 2020 by ADCANN
