Celebrity marijuana brands outperform traditional brands, data suggests

July 13, 2023 · MJ Biz Daily

It’s no secret that celebrity-backed marijuana brands – such as actor Seth Rogan’s Houseplant or rapper Wiz Khalifa’s Khalifa Kush – can leverage legions of fans and social media followers to attract consumer attention and buzz.

An MJBizDaily comparative analysis of recent retail sales data suggests these inherent characteristics and others, such as promotional events and partnerships, also help drive consumer purchases.

Celebrity brands in the California market – including Cann, Houseplant and Mirayo by Santana – outsold traditional marijuana brands by a healthy margin in the first quarter, according to data compiled by Seattle-based cannabis analytics provider Headset.

And in terms of price point, celebrity brands actually tend to charge less than the $23.14 per item that traditional cannabis brands do, according to Headset data.

The snapshot of the first three months of 2023 compared 20-plus celebrity brands against a representative sample that included more than 1,300 traditional marijuana brands.

Traditional brands in the first quarter averaged $26,591 in monthly sales, according to Headset.

At least nine celebrity brands exceeded that figure, with five generating monthly revenue well above the $100,000 mark.

Cann, a low-dose marijuana beverage maker endorsed by Hollywood celebs, influencers and professional athletes, outsold traditional cannabis brands by nearly a 30-to-1 clip.

Cann’s investors and brand ambassadors include actress Gwyneth Paltrow, entertainer and comedian Rebel Wilson and former NBA player Baron Davis.

“From my perspective, a number of celebrity-affiliated brands have been able to find success relative to the typical California cannabis brand,” Headset data analyst Mitchell Laferla told MJBizDaily via email.

On the business side, celebrity brands can open doors and connect with potential partners, which can help create unique promotions and meaningful interactions with customers, according to Drew Punjabi, brand manager of 22Red, a California cannabis lifestyle brand founded by Shavo Odadjian, an entrepreneur and bassist of heavy metal band System of a Down.

On the consumer side, celebrity appearances in retail outlets are in high demand and can help drive engagement and ultimately sales, Punjabi noted.

“It’s 2023, and influence is king. Celebrities have that equity with their fans and followers,” he said.

“In an industry where physical in-person retail sales are still paramount, it’s a huge advantage to be able to pull hundreds of people to a dispensary for a meet-and-greet or event tied to product promotions or new drops.”

Canned and delivered

Los Angeles-based Cann is the undisputed brand champion in the celebrity arena with average monthly sales in California of $751,760 in the first quarter, according to Headset.

The company early on partnered with Imaginary Ventures, a New York venture capital firm that helped grow celebrity apparel brands Good American and Skims into multibillion-dollar enterprises.

The two companies were co-founded by Khloé Kardashian and Kim Kardashian, respectively.

But instead of relying on celebrities with cannabis cred – such as rapper Snoop Dogg or country music legend Willie Nelson – Cann chose a different route.

“We thought if we could be the first cannabis brand to get a mainstream celebrity that does not have a public image that’s associated with cannabis, then we could change the conversation and normalize it in a really new and powerful way,” Cann co-founder Luke Anderson said.

“We were able to paint a picture that this is something for everybody. It’s not just something for people who want to get really high.”

Still relevant

The duo of Cheech Marin and Tommy Chong revolutionized stoner comedy in the 1970s with their two-man act eventually immortalized in low-budget cult classics such as “Up in Smoke” and “Nice Dreams.”

Five decades later, they remain relevant in entertainment and cannabis circles through their company, Cheech & Chong’s Cannabis Co.

The brand was No. 13 on the California list with monthly median sales of $7,696 in the first quarter, below the traditional brand average.

To help broaden reach, the entertainers hold interview sessions with young social media influencers at their custom-built studio near Los Angeles International Airport, where they often talk up the brand’s range of offerings, from cannabis flower and infused seltzers to delta-9 gummies and merch.

Cheech & Chong’s Cannabis Co. has also leveraged Marin and Chong’s generational appeal on Facebook, Instagram and TikTok.

“Being able to have a robust following through all three and be able to entertain and get people to engage on those networks is a way into the younger generation,” said Jonathan Black, CEO of Cheech & Chong’s Cannabis Co.

TikTok, in particular, has been instrumental in expanding awareness, according to Black.

That’s an interesting insight considering that nearly half the platform’s 50 million daily users are younger than 30, according to data trackers.

And nearly half the platform’s content creators belong to Generation Z, roughly 18 to 24 years old.

TikTok does have stricter community guidelines than other social media platforms and videos can be removed for including words and hashtags associated with cannabis.

Given the demographics, Tik Tok users might know Chong’s character Yax in the animated hit “Zootopia” more than his bandana-clad, slow-talking characters on stage, film and sitcoms such as “That ’70s Show” and the recent Netflix reboot “That ’90s Show.”

“We saw massive growth on TikTok,” Black attested.

“The younger generation knows Cheech and Chong. How they know who they are is always tough to tell.”

An investor’s perspective

Tress Capital, which has offices in California and New York, has invested in the cannabis space since 2013.

It was an early investor in Headset, product testing operator SC Labs and industry publisher Cannabis Now.

A few years ago, Tress started researching potential investments in brands, weighing the prospects of building a national one through multimillion-dollar investments.

But returns were uncertain, so Tress turned its attention to celebrities engrained in marijuana culture with massive fan and social media followings, a contrast to Cann’s approach.

“Cannabis people sniff out authenticity,” Tress Capital President David Hess said.

“If it’s not authentic, we’re not going to embrace it.”

The firm’s portfolio of celebrity cannabis brands include:

  • Tyson 2.0 (former boxer Mike Tyson), No. 3 in the California rankings with median monthly sales of $290,730.
  • Highsman (former NFL running back and Heisman Trophy winner Ricky Williams), No. 9 on the list with $51,133 in monthly sales.
  • Tical (rapper and actor Method Man), No. 10 on the list with $50,565 in average monthly sales.

Each celebrity is passionate about cannabis, Hess emphasized.

“If they don’t have the passion or understanding of the culture or the product, it’s probably not going to be a good fit,” he added.

Unique challenges

Working with celebrities bring its own challenges beyond the everyday pitfalls of operating a cannabis company.

Overcoming consumer perceptions is right at the top, according to Black.

And those perceptions run the gamut, from product quality and brand/celebrity authenticity to retail prices and how much the celebrity is involved in operations.

Brand stewardship guides most of Black’s decisions, along with a sense of “do no harm.”

His ultimate goal: “Don’t mess up 52 years of fantastic lineage here,” he said, referencing Cheech and Chong’s longevity.

“There’s a lot of pressure in running a brand like this.”

Unexpected incidents and scandals as well as the potential threat of “cancel culture” are big concerns for celebrity brand operators as well.

A few weeks before Tress invested in Tyson 2.0 last year, Tyson was involved in a physical altercation with a belligerent airplane passenger.

The video captured national attention, but Tyson’s image didn’t take a hit.

“There wasn’t much blowback,” Hess said.

“If he can do that on an airplane and still be beloved, that’s staying power.”

Despite the celebrity pull, consumer awareness varies from market to market, according to Madeline Scanlon, cannabis insights manager at Chicago-based marijuana analytics provider Brightfield Group.

Surprisingly, more than 80% of California cannabis consumers are unaware of the Cann and Houseplant brand, or their celebrity affiliations, according to Brightfield data, suggesting that product positioning, marketing and general operational efficiency might play a bigger role in success, Scanlon contends.

“Just being a celebrity brand doesn’t cut it,” she said.

“There has to be those other components of a true good brand.”

Long live the Dead

The life span of a celebrity brand might also hinge on the longevity and relevance of the celebrity behind it.

It’s a perennial challenge for executives behind Garcia’s Hand Picked, No. 7 on the list with $80,587 in monthly sales in the first quarter.

The brand, a unit of vertically integrated Holistic Industries, commemorates Grateful Dead front man and counterculture icon Jerry Garcia, who died from a heart attack in 1995.

Winning over Deadheads, a notoriously opinionated, anti-corporate fickle bunch, isn’t easy.

They want top flower, interesting cultivars and new SKUs (stock-keeping units) all the time, according to Kyle Barich, chief marketing officer for Maryland-based Holistic.

“A good portion of my professional life is catering to that very difficult audience,” he said.

The brand just concluded a major sponsorship at The Peach Music Festival in Scranton, Pennsylvania, where the logo was displayed in signage and on one of the main stages.

It was a first for the company and a unique industry crossover into mainstream music events.

Holistic, which works with the Garcia family trust and foundation on SKUs, merchandise, branding, marketing and other business decisions, takes its role in the Grateful Dead world seriously.

“We have the glorious pleasure of being able to honor the legacy of Jerry Garcia, who we all freaking love,” Barich said. (Full Story)

In category:Celebrities
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