Under the Influence with Terry O'Reilly - Cannabis Marketing

Episode Date: January 27, 2024

This week, we go one toke over the line and look at the emerging world of cannabis marketing.We start with the question - just how does a plant become illegal?We’ll explore the history of cannabis.We’ll talk about which celebrities have their own brands (Hello Willie Nelson!)Which high-end retail stores are now selling expensive cannabis paraphernalia.And which non-cannabis businesses are seeing a surprising uptick in sales - like fertilizer companies and fast-food restaurants. Hosted on Acast. See acast.com/privacy for more information.

Hi, it's Terry O'Reilly. As you may know, we've been producing a lot of bonus episodes while under the influences on hiatus. They're called the Beatleology Interviews, where I talk to people who knew the Beatles, work with them, love them, and the authors who write about them. Well, the Beatleology Interviews have become a hit, so we are spinning it out to be a standalone podcast series. You've already heard conversations with people like actors Mark Hamill, Malcolm McDowell, and Beatles confidant Astrid Kershaw. But coming up, I talk to May Pang, who dated John Lennon in the mid-70s. I talk to double fantasy guitarist Earl Slick, Apple Records creative director John Kosh. I'll be talking to Jan Hayworth,

who designed the Sgt. Pepper album cover. Very cool. And I'll talk to singer Dion, who is one of only five people still alive who were on the Sgt. Pepper cover. And two of those people were Beatles. The stories they tell are amazing. So thank you for making this series such a success. And please, do me a favor, follow the Beatleology interviews on your podcast app. You don't even have to be a huge Beatles fan, you just have to love storytelling.

Subscribe now, and don't miss a single beat. This is an apostrophe podcast production. You're so king in it. You're so king in it. Your teeth look whiter than no nose. You're not you when you're hungry. You're a good hand with all teeth.

You're under the influence with Terry O'Reilly. Back on August 8th, 1964, the Beatles were playing two dates at the Forest Hill Stadium in Queens, New York. One night, they were relaxing between the two concerts in their suite at the Delmonico Hotel near Central Park. As usual, the Fab Four were under siege as fans stood eight deep outside the hotel pressing against the police barricades. The hotel lobby and hallways were constantly patrolled by security, and 200,000 phone calls were received by the hotel switchboard during the two-day stay. In the hospitality suite next door, Derek Taylor, the Beatles' press officer,

was entertaining reporters, photographers, policemen, and celebrities like Peter, Paul, and Mary, and the Kingston Trio, who were hoping to meet the Beatles. But the one celebrity the Beatles wanted to meet most of all wasn't there yet. His name was Bob Dylan. When Dylan arrived at the Delmonico, he was ushered up to the Beatles' six-floor suite. After formal introductions,

the Beatles told Dylan they were all big fans of his music. Drinks were offered. That's when Dylan suggested they smoke some grass instead. The Beatles looked at each other apprehensively, sheepishly telling him they had never smoked marijuana before. Dylan looked disbelievingly from face to face. But what about your song, he said, the one about getting high? The Beatles didn't know what he was talking about. What song, asked Lennon. Dylan said, you know the one where you sing when I touch you, I get high, I get high, I get high.

An embarrassed Lennon corrected him, saying, those aren't the words. Dylan looked puzzled. Lennon said, the words are, I can't hide, I can't hide, I can't hide. That was news to Dylan. So he offered to roll a joint, but before he lit it, Dylan suggested they all cram into a bedroom, since there were police right outside the door. Once inside, he sparked it up and passed it to John,

who immediately gave it to Ringo, who Lennon dubbed, my royal taster. Because this was all so new to the Beatles, Ringo didn't know the etiquette of passing it around and proceeded to smoke the entire joint like a cigarette. That prompted Dylan to roll more joints so everyone could smoke their own. It was a profound moment, as marijuana would go on to

infuse the music of the Beatles from that point forward. Including the song Paul would write about grass almost two years later to the very day, called Got to Get You Into My Life. life. The world of cannabis has changed a lot in the last few years. Recreational marijuana has become legal in Canada, and it is slowly becoming decriminalized in the U.S. state by state. That means pioneering cannabis growers are emerging and retail stores are popping up everywhere. Celebrities are coming out with their own brands, surprising products are being infused with cannabis, and high-end retail stores like Neiman Marcus are selling pricey cannabis paraphernalia. The devil's lettuce is having its day. You're under the influence.

Cannabis is a product with a surprising history. To begin with, it is a plant. So, how does a plant become illegal? That's an interesting story. Cannabis is certainly not an invention of the 21st century, or the 20th century, or the 19th century. Actually, you'd have to go way back to 8000 BC. Back then, hemp was one of the first cultivated agricultural crops.

Villagers in ancient Mesopotamia used hemp cord in their pottery. In 150 BC, the world's first paper was invented in China, made entirely from hemp. When Christopher Columbus sailed across the ocean, the rigging and sails on his ship were also made from hemp. In 1533, King Henry VIII of England mandated that all farmers must grow hemp. As a matter of fact, you were fined if you didn't. The first recorded cannabis crop in Canada was planted by a botanist named Louis Aubert in Nova Scotia in 1606. 200 years later, the Canadian Provincial Parliament of Upper Canada got in on the act and formed the Board for the Encouragement of the Cultivation of Hemp in 1802. With that, farmers were provided with hemp seeds

in an effort to stimulate and incentivize Canadian hemp producers, and funding was made available for machinery to process hemp. Hemp production continued for decades, but eventually began to decline with the development of cotton production, which was much less labor-intensive. In the 1900s, cannabis maintained its use as a legal ingredient in medicine. And as a matter of fact, cannabis-based medicines and tinctures were sold in mail-order catalogs from Eatons and Sears. It wasn't until the early 20th century that Canada enacted cannabis legislation. Around 1909, a big crackdown on drugs began, unrelated to cannabis.

Laws began to go into the books as a response to the perceived, quote, opium-smoking Chinese immigrants on the West Coast. In the view of the white-centric government and high society, drug issues were always framed as race-based. In 1922, a book was written by Emily Murphy titled The Black Candle. Murphy was an early Canadian women's rights activist and the first woman magistrate in the British Empire. Based on what she was seeing in her courtroom, along with anecdotes and other expert opinions, Murphy's book portrayed an alarming picture of drug abuse in Canada.

She listed the use and effects of opium, cocaine, and what she called the new menace, marijuana, making unsubstantiated claims that marijuana users became raving maniacs and were liable to, quote, kill or indulge in any sort of violence. Her writings were widely read and fueled a drug panic. liable to, quote, kill or indulge in any sort of violence. Her writings were widely read and fueled a drug panic.

The very next year, in 1923 was an interesting choice, considering 99% of Canadians probably didn't even know what cannabis was. But there was a lot of legislation around restricting opium, and even heroin, so cannabis was probably swept up in the overall drug hysteria. Not only did the public not have any knowledge of cannabis in 1923, so cannabis was probably swept up in the overall drug hysteria. Not only did the public not have any knowledge of cannabis in 1923, but the police probably didn't know how to identify it either. The first recorded cannabis seizures in Canada happened in 1932.

The first conviction was in 1937, 14 years after cannabis prohibition. Then came a certain documentary in 1951. It was titled Drugs, the Terrible Truth. It put cannabis on a continuum of hard drugs. The narrator follows the story of a teenage girl named Phyllis. In high school, my girlfriend Ann and I went around with Jim and Bob. They both smoked pop.

That's jive talk for marijuana. And after a while, Ann and I got so that we did too. Then Phyllis meets the neighborhood dope pusher named Chuck. And he introduces Phyllis to heroin. The story traced Phyllis' descent into hard drugs, then her eventual rescue by her parents. Then they decide to see if heroin has any kick. It does. Worth noting, the documentary suggested it was the communists who were secretly promoting drug

use to undermine the national morale. One thing was for sure. the film taught Canada to fear marijuana. In 1954, the Canadian government doubled the penalty for trafficking cannabis from 7 to 14 years. Remarkably, judges could also order whipping as a punishment. Even as late as 1959, cannabis was still relatively unknown by the public at large. Then came the counterculture movement of the 1960s. The Beatles, Haight-Ashbury, Woodstock. Cannabis was now out in the open. In 1969, the Canadian government commissioned an inquiry into the non-medical use of cannabis.

It became known as the Ledain Commission, named after its chair and future Supreme Court Justice, Gerald Ledain. Particular attention was given to the impact policy and laws had on the people who used cannabis. After 55 months of extensive research, the 1,100-page report even included a 90-minute conversation with John Lennon and Yoko Ono when they visited Ottawa, after which Lennon said,

this is the opportunity for Canada to lead the world. When the report was finally published in 1973, it found the penalties for marijuana to be grossly excessive and recommended decriminalizing simple possession and the cultivation for personal use, as well as drastically lessening the charges for trafficking. Pierre Trudeau's government ignored the report.

It was shelved. The first country in the world to legalize cannabis was Uruguay in 2013. As of this writing, more than 40 countries have followed suit. Even though Pierre Trudeau didn't legalize cannabis, his son Justin finally did in 2018, making Canada the first G7 country to do so. In the U.S. to date, 24 states have allowed recreational marijuana. Retail sales there are expected to reach $53.5 billion by 2027. The current size of the legal cannabis market in Canada is $5 billion. It's expected to hit $7 billion in 2024.

As a point of reference, Canadian beer sales were $9 billion last year. Canada is home to roughly 3,700 cannabis stores and retail licenses, including nearly 1,700 in Ontario alone. According to Deloitte, cannabis sales have contributed $40 billion to Canada's GDP, and the industry has created over 100,000 jobs. While cannabis branding is highly regulated, there is still some very interesting marketing going on. Licensed producer UpCannabis figured out a way to advertise legally in Canada while still promoting its products.

It put up posters that appeared to be for an online bank. The posters had headlines like Our Interest Rates Are So High and E-Transfer Yourself Somewhere Else as well as Make a Withdrawal From Everything. Each poster had a tagline that said Feel Fabulously Rich and the URL isthisreal.ca.

When people went to the website, they had to pass through an age gate, then discovered the ads were really for up cannabis. Hey, do you remember this? Hi, I'm Pierre Burton. Looking back on my career, you know, I cannot count the number of times a young man or a young woman has come up to me and said, Hey, Mr. Burton, what's the best way to roll a joint? So be sure to remove any twigs and seeds.

Now, the way you distribute the mix will determine the shape of your joint. I prefer the classic cone-shaped joint, what the young people call a coner. Pierre then gave us his best tips. Pick everything up, start in the middle, roll outwards, and let your thumbs do most of the work. I'm Pierre Burton, and that's how to roll a joint. There are quite a few celebrity cannabis brands out there right now. A celebrity brand enjoys benefits that regular cannabis brands do not. Even though celebrity brands are subject to the same advertising restrictions,

they get a lot of press. For example, Drake has invested in a cannabis brand called Bull Rider. Justin Bieber has a limited edition line of cannabis called Peaches. The Tragically Hip have invested in the parent company of Up Cannabis. They see it as an extension of the band's brand. Rob Baker, the lead guitarist for the Hip, says marijuana has been a part of the band for a long time. Interestingly, his father was a judge, and Baker witnessed his dad incarcerate people for cannabis offenses during the 60s and 70s. The cannabis company has named strains after some of the hip's best-known songs. There is one called Grace, after the song Grace 2,

as well as Morning Moon and El Dorado. Then there's Seth Rogen. He and a partner started a company called Houseplant and launched a cannabis brand in Canada in 2019, then expanded to the U.S. in 2021. Besides cannabis, Houseplant offers a line of household goods geared to the toker. Things like ashtrays and lighters, designed to be proudly displayed. The Houseplant offices are contained, not surprisingly, in a house. It features the cannabis products Rogan creates

and houses perhaps the largest collection of vintage ashtrays. While the house reflects the brand, marketing cannabis isn't easy, as Rogan told Architectural Digest. Marketing is a thing that we, yeah, we've had a real journey on it. This was one of our more simple kind of like vintage ads. We would kind of refer to them internally as it's, it's, it's

challenging stuff to market sometimes because it is not something that it's kind of new. Like it's kind of old in a lot of ways when it is kind of new in a lot of ways. And it is one of the things you sit down and you're like cars, people are advertising those potato chips. I myself have done those table lighter ashtrays. it's not, there's not a lot of ads for that kind of thing out there. And so it is always a challenge to kind of crack how to communicate. In the U.S., both Cheech and Chong each have their own weed brands. So does Snoop Dogg, Jim Belushi, Whoopi Goldberg, Chelsea Handler, and even Martha Stewart. She partnered with Canadian cannabis company Canopy Growth to create CBD cannabis products for people and their pets.

Stewart calls herself the Cool Weed Grandma. But before there was a Cheech and Chong, long before there was a Snoop Dogg, and way before there was a Seth Rogen, there was a weed pioneer.g, and way before there was a Seth Rogen, there was a weed pioneer. His name is Willie Nelson. Willie Nelson smoked his first joint in 1954. He snuck his first reference to marijuana into a song in 1971.

The title was In a Memory, off the Willie Nelson and Family album. In it, he sings, I'm a voice on a green telephone. It was a veiled reference, but it was the precursor to a song he would record 41 years later, titled Roll Me Up and Smoke Me When I Die. Willie has his own brand called Willie's Reserve. His weed company has raised close to $30 million from investors. Hilariously, Willie said, I've bought so much of it, it's time to start selling it back. Some upscale stores are getting into the act. Barney's New York, a longtime favorite of wealthy Manhattanites,

has begun to offer pricey cannabis paraphernalia. The store is only offering the items in their Beverly Hills location for the time being. On the fifth floor there, past the men's shoe section, is a department called The High End. It offers an assortment of exclusive items, including $1,100 glass bongs, $1,400 weed grinders, and artisanal French rolling papers.

A store in New York's Chelsea area called Higher Standards offers a $6,000 glass potpipe in the shape of a skateboard. Luxury retailer Neiman Marcus has started to sell soaps, lotions, and other skincare products made with CBD. They are only available in Neiman Marcus locations where marijuana is legal. As the green wave rolls across the country, there are other non-cannabis industries seeing an uptick, and some of those may surprise you. Fast food restaurants are benefiting from weed legalization. A recent study of 27,500 people in 25 markets where cannabis is legal

says 43% head to McDonald's after lighting up and getting the munchies. Jack in the Box, another American fast food chain, collaborated with a company called Mary Jane, a weed-focused digital media company owned by Snoop Dogg, to create munchie meals. The restaurant drew inspiration for the marijuana-inspired meal from its late-night menu. Each munchie meal box comes with two tacos, three crispy chicken strips, a serving of half curly fries and regular fries, and a small soft drink. The price? $4.20. Naturally.

Scott's Miracle-Gro Fertilizer created a separate division for weed growers. The company bet on cannabis as a high-growth category, with the added benefit of offsetting the seasonality of its traditional gardening business. And because hydroponic plants can be grown indoors without soil, hydroponic companies are posting year-over-year revenue growth as legalization opens up new markets. That indoor trend has also lifted the LED lighting category, as LED lights last longer, emit less heat, and lower HVAC loads and operating costs for growers.

Cannabis can be infused into many different products. There are cannabis-infused beverages and beers. One craft beer company called Saria has replaced the alcohol in their beer with cannabis, due to the fact alcohol consumption is dropping across the country. But because weed is still illegal federally in the United States, their beer has been tricky to market. And in California, it was still illegal to use the words cannabis and beer in the same ad.

So, Saria created a Spotify playlist, because playlists don't have to be federally approved. Saria concealed its advertising message inside the playlist by putting up posters in California with a scannable QR code and a tagline that said, Legally, this ad can't say much, but this playlist can. The playlist contained eight songs. The trick was to read the titles sequentially as one sentence.

The eight song titles read as follows. Hello, hello, hello. We make alcohol-free beer for people who love getting high. It was a crafty message from a craft beer. There are also cannabis-infused soft drinks, bottled water. Ben & Jerry's ice cream has a CBD flavor ready to launch. There is cannabis-infused gravy for Thanksgiving. Cannabis-infused tampons, toothpastes, and chewing gum. There is even a line of sports bras, leggings, and jumpsuits infused with 25 grams of CBD oil for your higher-intensity workouts.

And O. Henry has a bar called the 425 to eat five minutes after you've partaken. The possibilities are endless. It's interesting to watch the evolution of the cannabis industry. For a certain older generation, it must seem unreal that marijuana has gone from a criminal offense to being completely legal in one lifetime. To a younger demographic, it's more like, what's taken so long? Currently, the alcohol industry certainly has much more latitude when it comes to advertising its products

than the cannabis industry does. But that may just be a matter of time. As the first G7 country to legalize recreational marijuana use, it's smarter to ease regulation than it is to backtrack. So my guess is that cannabis advertising regulations will slowly begin to mirror the beer industry. We already see don't drive high ad campaigns out there, mirroring don't drink and drive. And you can already see the advertising straining to be set free, hiding inside Spotify playlists

and pretending to be online banking ads. To be more visible than that right now would be one toke over the line when you're under the influence. I'm Terry O'Reilly. This episode was recorded in the Terrastream Airstream mobile recording studio. Producer Debbie O'Reilly. Sound engineer Jeff Devine. Under the influence theme by Ari Posner and Ian Lefevre.

Tunes provided by APM Music. Follow me on social at Terry O'Influence. This podcast is powered by ACAST. And if you'd like to read next week's fun fact, just go to apostrophepodcasts.ca and follow the prompts. See you next week. Hi, this is Ian Hopkins from Oakville, Ontario. Fun fact, one of Bob Dylan's most famous songs is titled Rainy Day Women, numbers 12 and 35. And if you multiply 12 and 35, you get 420.

Just saying.