The cannabis industry has become a fascinating window into some of the existential questions that keep communicators up at night. Issues around ethics and optics, regulation and advertising, and using new media for content distribution are at the core of a cannabis PR pro's job.
We spoke with Joshua Otten, CEO of Ronin, the largest branding agency for cannabis and hemp businesses. Ronin helps cannabis and hemp entrepreneurs brand their products at every stage of the process. To date, Ronin has worked with 60+ cannabis and hemp brands from early-stage to scale.
As a full-fledged agency, Ronin is quite an evolution from Josh's prior claim to fame—PRØHBTD—a cannabis content network that he co-founded.
We spoke about his journey from PRØHBTD to Ronin, how quality content can make the difference between a commodity and a lifestyle, and why the future of cannabis branding will live on streaming services.
PRNEWS: Can you walk us through how you went from PRØHBTD to Ronin?
Joshua Otten: Sure. I exited PRØHBTD [this year], which morphed into Future State Brands. As part of that I negotiated this spin-off of the media assets that weren’t gonna be utilized at FSB. That was the network, the agency models, and all of the content—the IP that I created as part of the content team at PRØHBTD for five years—which was about 150 hours of content.
In a weird way, we’re kind of similar to a Vice and Virtue model. If Vice is the publication arm, and Virtue is the agency that powers a lot of what’s going on with the brands inside, then Ronin is our sort-of engine where we work with brands, retailers in Canada, startups, even other publishers.
We’re working with the group that bought Easy Riders Magazine and Tattoo Magazine, helping them launch an entire [streaming] network with a content strategy, event activations, all kinds of cool [stuff.]
My background is almost 12 years of agency experience—running agencies, working with PRØHBTD in cannabis and mainstream, helping brands create content, use content to market themselves, distributing content, etc.
On the other side we have SocialClub.tv, our distribution network, we actually have in beta right now and are getting ready to launch in January. You’re going to be able to go on and get 150 hours of content to start. There’s going to be a linear TV streaming experience, and we’ll have branded channels.
PRN: It makes sense why you’d go straight to streaming, given the stigma around the space. Avoid the politics of negotiating with the traditional networks.
JO: The cannabis industry is in such flux. Hemp’s getting beat up every other week with USDA and FDA concerns about ingestibles and all this stuff. We’re partnering with Grubhub—that’s who wants to reach our audience. Postmates, Grubhub, Lyft.
PRN: Overlapping audience segments.
JO: [Laughs] Exactly. We see that as the true value of what we’re doing. We’re here to build a network so that, when the cannabis industry is ready to go multi-state and international, there’s a framework. The way I look at it, if people say they’re building brands in cannabis—
PRN: You draw a distinction between ‘product’ and ‘brand.’ You’ve said, “A product does something, a brand is something.”
JO: That’s it. People are building commodities now. But if you look at it, Starbucks doesn’t own coffee plantations—they’re building a brand. The big issue that I see in hemp and cannabis is, people are building commodities with ingredients. If you’re selling a product around the ingredients—CBD, THC, cannabinoids, strains, or whatever and that’s your sole thing—you aren’t creating a brand, you’re creating a commodity.
At the end of the day, we can put segment brands into two broad categories. You have lifestyle, which is [when a] brand becomes part of my identity, not just a product that I use. That’s gonna be Red Bull, Nike; brands you’re not only buying because they’re functional or have an outcome that you want, but they actually become part of your identity. This becomes who you are or who you want to be.
And then you have outcome-based products like Five-Hour Energy, and that’s what hemp is gonna be. CBD has specific outcomes, but all the brands are slapping their label on 50 different form factors...slapping a label on it is just marketing the ingredients, and that’s not gonna last.
Cannabis is fully in the lifestyle market.
PRN: Cannabis users are not, and never were, monolithic. Conscious consumers may not want to be lumped in with the ‘stoner’ lifestyle or the bougie, hyper-holistic Goop set. That presents an opportunity for learning more about all these different audience segments.
JO: Yes. A brand in cannabis is not a strain, not an ingredient, not a THC level. It’s whose shirt I want to rock. For the hardcore California brands to break out of the market, they’re gonna have to start addressing the core issue, which is content, content marketing, and creating something more than a commodity.
Berner [a rapper and marijuana entrepreneur behind the 'Cookies' strain, who Otterman partners with on content] never talks about how fire his weed is, he talks about his content.
Making content, using content to build a brand. From Day 1, if it was about a strain, it was also about creating a cool-looking placard for the strain to make it look dope. That was stage one branding for him, which he’s done all the way up to now doing a collab between Cookies and Scarface, with Al Pacino picking out each piece to say if it’s appropriate or not.
The cookies x Scarface collab just dropped ! https://t.co/GCTMokccA6 pic.twitter.com/ER6JBtBOTD
— Berner (@berner415) August 24, 2019
PRN: That goes part in parcel with this trend of marketing a strain around feeling and behavior, not just how high it gets you, right?
JO: Yes, but that’s an outcome. So if you’re gonna market a strain and say, “This makes you sleep,” I say stay in the consumable route.
PRN: You also draw a distinction between outcome and lifestyle. But that’s an outcome based on first identifying a lifestyle and your audience segments, right?
JO: Well, what happens with cannabis brand-builders, and the trap they fall into, is not realizing that cannabis does both. Cannabis has an outcome—it gets you high, you can self-medicate for anxiety. But if you’re going to build a brand and say to a consumer, 'I’m going to give you this outcome,' you’ve got to lean all into that. You’re even sold in a different aisle if you’re mainstream.
When I buy Red Bull it’s in the energy drink section. And it doesn’t even really tell you what it does. But what they’re really selling you is lifestyle—jumping off cliffs, monster truck rallies. You’re finding people buying Red Bull shirts and hats because they love the F1 team—they don’t even drink it.
For them, they’re a content company that happens to sell sugar water. That’s what a lifestyle brand is. You’re selling aspiration, lifestyle and identity, not product.
PRN: But brand builders in the cannabis space must be more mindful of the nuances around these commodities. There’s more science and variables amongst the strains.
JO: True, but I’m talking about a product discovery and consumer growth perspective. Now, if you flip the other side, Cookies is analogous to Red Bull, while Dosist is analogous to a Five-Hour Energy. Both brands are clearly picking a lane.
Then you have a bunch of people in the middle trying to be both things to both people. You’re right, we do have outcomes with cannabis. My pitch consistently is that, if you’re a grower, cultivator or manufacturer on the commodities side of the business, are you prepared for your commodity to lose two-thirds of its value?
PRN: Are you suggesting that commodity producers get in on the brand building and lifestyle stuff?
JO: If you are a commodity producer and don’t want to sell only in farmers' markets, if you don’t have a real brand, capitalism will eat you alive.
Cannabis has been filled with outlaw entrepreneurs—and thank God, because without them there would be no industry. They got the ability by being first in and controlling vertical distribution, vertical integration from seed to sale...whatever product they did, sold. Those were the choices they had.
But they got fooled into thinking, “This is a brand now, and I’m going to last.” The reality is, it’s not gonna be Big Tobacco or Big Alcohol that’s gonna destroy everyone, it’s gonna be Goop. It’s gonna be these brands that we already trust. And retail stores, whether it's MedMen or somebody else, are the new Amazon.
PRN: What role should those brands play in mitigating the quality control issues around things like the vaping epidemic and Vitamin D acetate?
JO: The cannabis community knew about that before it was happening, and talked about it, because it’s a black market issue. The CDC had no problem hyping it...because it thought any collateral damage around overhype is fine. It just wanted to see it shut down.
California has 197-200 real, licensed dispensaries. Colorado has almost 5,000, but fewer people than L.A. County. Two-thirds to three-fourths of the entire California market is still black market. Three-fourths of cities in California will refuse to let dispensaries in, and they’re trying to fight delivery. The irony is, you’re allowing this black market to thrive, and when the black market thrives, they create [bad] products. When they create [bad] products…
PRN: This is an argument for regulation.
JO: Well, not too much regulation. We need legalization, and we can’t have regulation to the point where cities can decide to completely keep the product outside of the hands of consumers, because consumers are buying it anyway.
If prohibition doesn’t work, it doesn’t work. That’s the framework. Either way, you still have a black market, and that’s when the bad [stuff] comes in. The entire driver of this [problem] was the black market, and the black market was thriving because there was no access.
PRN: There’s a threshold to the lifestyle piece, though, where you can be so sold on a behavioral promise that it’s not easy to get actual info about strains and potency. There’s a balance between the marketing copy and the facts to be respected. Part in parcel, there’s also an opportunity for building out more nuanced audience segments there—not all users are Goop people, nor are they all kicking around hacky sacks in ponchos.
How does data on your consumers feed into better segmentation?
JO: Everything’s about access, so my content has to be everywhere, and that’s the goal. By the end of next year, it will be—we’ll be in about 150 million homes.
I want to data mine to see what you’re interested in. I’m going to be able to see that 90% of my audience is interested in making cannabis companies, or not, maybe just interested in funny things.
PRN: Since cannabis brands can’t buy media or ad space in traditional outlets, often the influencer or spokesperson relationship becomes much more crucial. What advice do you have about working with influencers or advocates in a sensitive space?
JO: If you’re talking about how brands can use marketing solutions and channels that are primarily off-limits to them with influencers, at least know what your brand is and who you want your consumer to be. I think the challenge is a lot of people are building by gut, not building by data. Branding can’t be just data, I understand.
PRN: The gut should be the catalyst, but you can’t stop there.
JO: It has to be, but no, you can’t. Who are you marketing to? Once you understand that, you have to have a budget for customer acquisition. Events work well. Giving people product in a legal, regulated way works well. Communicating in a one-to-one way to build trust works really well.
You still have to have contact with their Instagram pages. But give yourself a budget and some time to do long-term brand building. It’s reach plus frequency. Everyone forgets the frequency part. They get an influencer to tweet once. I tell brands to find that influencer who really speaks to your business, who gets the cadence of your audience, and go all in on a six-month plan with them.
PRN: Do you give them access to a dash and your insights?
JO: Yeah, for sure. We work with a group that just started working with an outdoor influencer community, all content creators. They went to 1,000 of them and did a survey—these are legit people who will go on a journey in Arizona that’s off the grid. They were asked what type of brand they most wanted to work with, and 90% said, “Cannabis, because we all use it.”
These are not cannabis influencers, these are outdoor influencers who love our products. So there’s a great opportunity for someone to build the Red Bull for outdoor adventurers. They’re educated, so they want to know about the product, the backstory, some discovery about the growing process, how you treat the farmers, the distributors.
I keep going back to commodity versus brand. What’s the difference? A commodity is an ingredient, a product, something that does something for you, but you don’t [care] about it. You just need it.
What Amazon, as an example, does, is take brands and commoditize them. It commoditized them by price, delivery and access. But the key to it is—by the time consumers get there, they already have to have done some brand discovery. You have to know what you want.
PRN: And that’s where the content comes in?
JO: Exactly. I’m going to Amazon because I have an account there, I have a card there and it’s cheaper, but I’m not doing brand discovery there. It’s more important than ever for brands to own their audience. That’s why brands like Nike are pulling their [stuff] off Amazon.