Has the Green Rush become a Greed Rush?

Amidst all the media hype, it would be easy to believe that the next decade would be the financial hit in the global cannabis industry for years to come, but 2020 has seen a bit of a comedown. After the giddy heights of 2019, the industry is seemingly heading south and the promise of a massive surge of immense riches appears to have turned into a stream of doubt and financial instability. 

Should the industry in the UK be donning their tin hats and running for the trenches or is this just a case of teenage growing pains and a case of an unsightly pimple that’s to be expected in any pubescent industry. Or does the blame lay with the epidemic of financial mismanagement and corporate greed? 

We love to ponder the Big Questions at The Telegrass, and who better to help us muse over the issue than Owen Reader, Global Cannabis Practice Lead at Cult Collective. 

Owen has worked with many brand leaders, including the MacDaddy of them all Canopy Growth, helping them navigate through the market, whilst developing more tightly-focused products.

Owen’s assessment is that the recent downturn is set to continue, and it is “just the first wave of disruption in the industry”. In his book “The Pot Apocalypse”, he predicts that 80% of cannabis brands will go under in the next three years and that’s some serious blood on the carpet.

One of the major factors guiding his argument is that where two to three years ago demand for legal cannabis - in North America - outstripped supply, but now the opposite is true. This means that many smaller companies simply cannot provide products at competitive prices any more. This, along with the Vape crisis and a rollback on legalisation in Canada and some US states has somewhat rocked businesses looking for calmer waters and a steady ship to sail in.

Bringing things closer to home and how to flourish in the future CBD market, Owen had this advice: “I would be very, very focused on whom I am trying to serve. Frankly, I probably wouldn't even try to be a CBD brand. I would be a brand for a specific segment of the market… a brand for stay-at-home moms, or business travellers. I’d think about places where my products might be able to add value to someone's life, and really narrowly focus down on whom I serve.”

He also feels engagement between customer and brand is key. “I would try to find a way to build meaningful relationships with my consumers, even on a one-to-one level. I know that sounds silly in a business that aspires to scale, but the reality is that some of the biggest success stories grew from doing non-scalable things. So, don’t get too greedy too soon!”

Ultimately, Owen is extremely excited and optimistic about the future of the cannabis industry, “It will only grow, and in the next 20-30 years, we will see almost everyone interacting with some form of cannabis product… and there will be remarkable brands out there doing really remarkable things.” 

So, the green rush to ‘making a fast buck’ may not lead to instant riches, but if we slow down and consider every step, the industry will have a long and prosperous journey ahead of it.

Many thanks to Owen for giving us his time and sharing his knowledge. We’ve only used excerpts of our conversation in this article, so keep an eye out for an extended version at a later date.

His book “The Pot Apocalypse: Revelations for the cannabis industry” should be available from Amazon UK in the near future…or if you’re really keen drop us an email and we’ll see if we can’t get hold of one for you.