Profit From Marijuana’s Makeover
A brand is a powerful thing. It’s why Ford’s F-150 is synonymous with the pickup truck. It’s why Coke is a household name and waiters and waitresses the world over have to ask, “Is Pepsi okay?”
Marijuana itself has a sort of “brand,” and it carries a lot of baggage. It still conjures up images of Cheech and Chong, Willie Nelson, long hair and Woodstock for some.
But many Americans are beginning to look at cannabis in a different light.
As today’s chart shows, a majority of Democrats, Independents and Republicans support cannabis legalization. And that says a lot when all three of these groups align on anything these days.
This proves cannabis isn’t just for hippies and college kids anymore. It’s a legitimate business. Nowadays, dispensaries are almost as common – and look as nice – as Starbucks or Apple stores.
Cannabis can even be used to treat anxiety, cancer, post-traumatic stress disorder and many other conditions. In fact, its medical use considerably outpaces its recreational use.
It seems weed has lost its edge. It’s gone corporate. Mary Jane traded in the tie-dye T-shirt for a suit and tie. And that’s fantastic for your portfolio.
But the biggest profits may come from a source other than marijuana growers…
Cannabis companies are spending more and more each year on branding. Having sleek packaging and a slick image is vital to standing out in a rapidly crowding industry and throwing off the baggage of marijuana’s illicit past.
Companies like design startup Wick & Mortar are making money hand over fist designing for cannabis brands.
And these brands have downright cool packaging.
For example, you can find vape boxes made with gold leaf that look like they contain the latest iPhone.
Wick & Mortar is doing extraordinarily well for itself, but it’s small as far as cannabis branding firms go.
The kingpin is KushCo Holdings (OTC: KSHB).
Despite its name, KushCo doesn’t actually grow any kush. It focuses entirely on branding and packaging. Through its Kush Supply Co. subsidiary, it sells generic packaging, vapes, rolling papers and more to pot startups.
KushCo’s other subsidiary, The Hybrid Creative, does extensive custom brand design work. The company will design everything from logos and websites to packaging and marketing materials.
The Hybrid Creative’s revenues and profits have more than doubled each year since 2015.
There’s really no way to know for certain which cannabis companies will be the Apple and Google of weed. But all of them need a recognizable brand to prosper in a rapidly crowding market.
Another way to make a fortune in this green gold rush is with the people who know how to make it sexy. The people who know how to sell it to your grandma, the cop on your corner, your kid’s teacher… You get the idea.
Any of these cannabis startups could sell the best marijuana on the planet, but if they can’t make people want to buy it, they won’t go anywhere…
It’s the companies that market the products most successfully that will light it up.
*The views and opinions expressed in this article are those of the author and do not necessarily reflect the official position of Wall Street analysts.