The Sound is renowned for coming up with provocative insights and dropping bombs of truth and that's just what we’re about to do. Here goes….people like weed. That's right, lots of people really like weed. And here’s another truth bomb. People have been smoking weed since the dawn of time, even though it’s been largely illegal everywhere. Yes, the law has been ignored like the ass it is and people have been buying weed, selling weed, smoking weed and having a good time regardless of what the politicians say. But things are about to change. Governments around the world are looking at weed differently. Perhaps it isn’t as bad for you as we thought? Perhaps it’s even good for you? Perhaps putting people in prison for selling weed isn’t that smart….or fair? Perhaps if we regulate weed it might be a new stream of tax revenue? Hmmmm. The era of global weed prohibition might just be about to end…and we want to be there when it does.

1. THE WEED EFFECT ON THE BUSINESS WORLD

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CANNABUSINESS
Welcome TO THE WEED EFFECT
The Sound is renowned for coming up with provocative insights and dropping bombs
of truth and that's just what we’re about to do. Here goes….people like weed.
That's right, lots of people really like weed. And here’s another truth bomb. People have
been smoking weed since the dawn of time, even though it’s been largely illegal everywhere.
Yes, the law has been ignored like the ass it is and people have been buying weed, selling
weed, smoking weed and having a good time regardless of what the politicians say.
But things are about to change. Governments around the world are looking at weed
differently. Perhaps it isn’t as bad for you as we thought? Perhaps it’s even good for you?
Perhaps putting people in prison for selling weed isn’t that smart….or fair? Perhaps if we
regulate weed it might be a new stream of tax revenue? Hmmmm.
The era of global weed prohibition might just be about to end…and we want to be
there when it does.

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CANNABUSINESS
THE BIG BATTLE IS OVER;
THE BIG OPPORTUNITY
HAS just begun
Some form of marijuana has already been approved in 25
states, and roughly 80 percent of the American public
currently favors medicinal use. Support for recreational
use finally outweighs dissent.
And it’s not just liberal bastions like Washington, or progressive
states like Colorado leading the charge. Recently, Ohio voted
against full legalization but for the legalization of medicinal
marijuana making it the 25th state in the US to do so. While full
legalization didn’t pass, just bringing it to a vote shows how far
the nation has come.

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In the USA, the states of Alaska, Colorado, Washington and Oregon
have legalized weed recreationally; this means that you can pop into
a weed store, talk to a Budtender (yes that's right, a budtender) and buy
weed just for fun; no need to pretend to have a headache or be
experiencing stress to get medicinal weed. And, no need to have a dealer
on speed dial.
Some form of legal marijuana has already been approved in 25
states, and roughly 80 percent of the American public currently
favor medicinal use. And, support for recreational use finally
outweighs dissent.
So this must mean that everyone is stoned all the time and that the weed
store owners are billionaires already right? Wrong.
WEED IS LEGAL IN SOME
PLACES ALREADY
Alaska
Colorado
Washington
Oregon

6. THE SOUND
According to statistics it would seem that 1 in 4 adults have smoked weed in their lives. When we did the same survey
amongst The Sound employees we learned that perhaps everyone in the world smokes weed, and some of them every day
(this may account for your late deliverables, sorry).
In the USA, estimates reveal that people are spending approximately $6 billion on weed already, even though its only legal
in 25 states, and only four of them have gone full carrot, (and apparently if you smoke “The Full Carrot” in Amsterdam, you may get
stuck in a toilet in a cyber punk bar. Full story upon request.) and made it recreationally legal.
So this means there’s a lot of people out there who have medicinal weed cards or a nice man who delivers…
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CANNABUSINESS
BUT WEED IS niche, RIGHT?

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WHY AREN’T THE WEED
BRAND PIONEERS really rich?
USA
CAN
A
DA
These visionary men and women were first to market, so in most categories that
would tend to mean a head start on the road to riches. In the weed market,
things just aren’t that simple.
Firstly, in CANADA, where weed is kind of legal but kind of not, weed brand owners
are living with complete uncertainty as to whether their business will even be open next
week; landlords are suspicious, zoning is fluid and the police still pop by every week.
In the USA things are even more complex. Weed remains a Schedule 1 drug at the
Federal level. This means that the government still considers weed to be harmful,
addictive and of no medicinal benefit. As a result you can’t distribute weed across state
lines (even between states where it is legal), banks won’t touch the money and things
like staff costs are not deemed tax deductible.
This all means that being in the weed industry now is far from profitable and far from
easy. It all sounds very stressful, if only they had something to help them relax…

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BUT WHO WANTS TO HAVE
stoners as customers ANYWAY?
Good point. Unless you’re selling tie-dye t-shirts or Cypress Hill CDs, right?
Wrong, very wrong.
Weed users range from rap artists to stay at home dads to cancer patients to
astro-physicists and everyone in between.
In fact, when you talk to weed users and weed brand owners, you quickly learn
you’re talking to an incredibly informed and passionate group of people. Weed
users are concerned with things like efficacy, origins, ethics and the corporate
practices of growers and brands. Talking weed is a lot like talking about craft
beer, craft coffee or small batch spirits.
Who wouldn’t to engage with people like that?
stoner?

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POT. IT’S NOT just for potheads ANYMORE
Over the past 40 years we’ve watched perceptions of pot move from
menace to mainstream. With that, its acceptance has evolved from a
tolerated mainstay of youthful counterculture to become an accepted part
of life or even embraced as a miracle drug. Heck, even the ‘highest’ office
in the land, the US presidency, hasn’t been immune to the Mary Jane.
All of this is to say that the target audience for weed is pretty much anyone
“of age”. Its appeal spans race, income and social boundaries making it a
truly universal category.
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ex-
cop
ex-
cop
ex-
cop

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Legalized weed is the fastest-growing industry in the US. As weed becomes legal and regulated
we’ll see the continued expansion of the growing, producing, dispensing and accessories markets.
‣ Weed Extensions (smoking, vaping, edibles, drinks, lotions, patches, booze, etc.)
However, some of the most interesting opportunities are found in the myriad of businesses
springing up around weed. We’re already tracking:
‣ ‘High’ tech (a burgeoning tech scene has sprung around the weed-scape)
‣ Agra businesses (including equipment, fertilization, agra-science)
‣ Commercial real estate funds (dispensaries are popping up in portfolios)
‣ Investment products (pot stocks exist and private equities opportunities abound)
‣ Detection & safety (the race is on for accurate testing for law enforcement)
‣ Abuse / addiction related businesses (products like Cannitrol help people stop using)
‣ Lobbying, regulatory and legal related businesses (pot law will stay profitable)
GET READY FOR AN explosion
OF POT RELATED BUSINESSES

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Last year, weed generated
$2.7 billion in sales…
…and delivered more than $200 million
in tax revenue to the legal states.

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CANNABUSINESS
THE BATTLE TO BECOME THE
Budweiser of Bud HAS BEGUN
While pot’s not legal nationwide, many companies, both large and small, are
preparing themselves to go national when it does. But there’s a battle for the
soul of the category. That is, whether the industry should be dominated by
profit-driven Corporate Weed and Wall Street or by purpose-driven craft /
small businesses of America’s mains streets.
Some companies, like Privateer holdings unabashedly desire to be “Big Marajuana”.
Among others with grand aspirations a common refrain is to become the
“Starbucks of Weed”.
Still others in the industry, including noted advocate Willie Nelson, want to fight
against the corporatization of the industry in hopes that it might help revitalize small
farms, support small businesses and grow in environmentally responsible ways.

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As the category matures we’re already seeing growers or producers shift from selling in bulk,
to packaging and selling branded products. Not surprisingly, manufacturers want to stand out
vs the competition, and people are accustomed to knowing where a product comes from.
Currently, the weed brandscape looks immature and is dominated by wacky strain types, like
Schnazzelberry, Lucky Charms or Skrunk Special.
More recently celebrity licensing agreements have exploded. Tommy Chong, Snoop Dog and Bob
Marley’s family are of the many that have already inked deals with weed brands, accessories and
other marijuana related products.
That being said, licensing or co-branding isn’t necessarily a long term strategy to build any brand,
much less a brand in the weed category, according to HBR Author / Colorado State professor John
Quelch who recently reported on the subject.
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Puff Puff Give: SHARING
EQUITY TO STAND OUT
- JOHN QUELCH
HBR AUTHOR / COLORADO STATE PROFESSOR

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However, among the neon pot leafs and images of rap stars
smoking blunts, there are some interesting exceptions. Brands
like The Goodship Company or Dixie Elixirs and Edibles are pioneering
a sophisticated and premium packaging and branding that would be
at home on the shelves at Barney’s. It’s their efforts that are pushing
the narrative around pot beyond its stoner image into mainstream
and upscale markets.
Ultimately, as the market expands, the need for skilled marketing will
increase in order to help brands stand out. Weed focused marketers,
like Cannabrand, are already emerging to help develop the next big
weed brand and its communications.
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Help Wanted: CRAFTING THE
FUTURE NARRATIVE OF WEED

17. THE NEXT Dot Com bubble
The green rush is already on and the expected explosion of
brands and related businesses in this new category harkens
to last major category creation event – the dot com bubble.
Undoubtedly, there will be competition as the market invents
itself and brands jockey for competition. With the need to stand
amongst the crowd, will come the advertising and media spend.
And while dollars probably won’t flood the TV airwaves (due to
regulation), they will likely saturate other channels reducing
inventory and driving up costs. Print, OOH, DM and especially
digital (programatic, paid, earned and owned) will see an influx
of budget allocation.
Inevitably, competition will ‘weed’ out weaker brands and
investment dollars will dry up, as will the influx of media
dollars, leaving a more balanced flow of media investment
in the CannaBusiness space.
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So, what happens if governments make weed legal and a multi billion-dollar category
emerges into the light?
The answer is that everything changes, and nothing changes…
Everything changes in the sense of where and how weed is bought (and who is not in prison
for selling it)…but nothing changes in terms of anything else.
Well not much anyway.
Whisper it, people already use weed and making it legal doesn't make more people use it or
stop people drinking beer or start eating more chips…there might be the occasional person
who uses weed again because they lost the number of their weed dealer in 1998, but for most
it just becomes something that's easier and more pleasant to purchase. And that’s a big deal
and a big opportunity for brands both in the category and on the fringes.
SO WHAT’S GOING TO HAPPEN?

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CANNABUSINESS
At The Sound we believe that the legalization of weed is
predominantly a brand world opportunity, and a significant
legislative shift will be needed to dramatically and positively
affect some demographic groups…
Arrange for a presentation and a screening of our documentary,
Weed Co. The Branding of Weed, to learn more about the first
weed brand owners who are trying to change the world.
info@thesoundhq.com
And if we're a little slow to respond, well...we'll get back to you when
the smoke clears...
WANT SOME (MORE) WEED?
PRESENTS
T H E B R A N D I N G O F W E E D

20. V A N C O U V E R | N E W Y O R K | L O N D O N | T O R O N T O | C H I C A G O | M U M B A I
W W W . T H E S O U N D H Q . C O M

21. IMAGE REFERENCES
SLIDE SITE
COVER http://marijuanapolitics.com/wp-content/uploads/2015/05/o-MARIJUANA-MONEY-facebook.jpg
2 http://cdn.thedailybeast.com/content/dailybeast/articles/2013/04/20/pot-s-founding-fathers-the-real-story-of-4-20/jcr:content/image.img.2000.jpg/1366484489582.cached.jpg
3 http://portland.thephoenix.com/news/148267-as-marijuana-laws-ease-nationwide-maine-leads-a/
4 https://coubsecure-s.akamaihd.net/get/b40/p/coub/simple/cw_timeline_pic/c7ac578d872/06268f0dc054437fbde1e/big_1431270304_image.jpg
5 http://greenseek.co/wp-content/uploads/2015/10/Budtenders_guide.jpg
6 http://www.vox.com/2014/12/24/7408571/marijuana-legalization-colorado
8 https://vice-images.vice.com/images/articles/meta/2016/04/11/a-history-of-women-and-weed-1460395199.jpg
9 http://www.movin925.com/wp-content/uploads/2015/04/2015-04-20_1217.png
10 https://d1zcpq3nu9qcg4.cloudfront.net/production/blog/post/pictures/2176/content_1_1.jpg
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22. IMAGE REFERENCES
SLIDE SITE
11 http://www.mailtribune.com/storyimage/MM/20151001/NEWS/151009948/AR/0/AR-151009948.jpg
13
https://cdn3.vox-cdn.com/uploads/chorus_image/image/49520043/grow.0.jpg
http://www.weeddepot.com/files/9214/2790/9650/Marijuana_Stores_Turned_Into_Starbucks-Like_Establishment_-_Weed_Depot.jpg
14 http://www.marijuana.com/wp-content/uploads/2015/04/willie-nel.jpg
15
http://www.gannett-cdn.com/-mm-/2e478fbb31ee5694356867d590457c36e9278f78/c=228-0-4821-3453&r=x404&c=534x401/local/-/media/USATODAY/test/2013/12/31//1388507952001-AP-
Legalizing-Marijuana-Denver.jpg
16 http://www.thegoodship.com/wp-content/uploads/2015/05/the_goodship_cookie_marijana_boxing.jpg
17 https://d3atagt0rnqk7k.cloudfront.net/wp-content/uploads/2015/11/25112350/state-by-state-guide-to-cannabis-advertising-regulations1.jpg
18 http://www.smokingwithstyle.com/wp-content/uploads/2015/06/mmj-dui.jpg
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