LucidMood's Great Trick: Selling Cannabis to People Who Don't Like Feeling High
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Two young men with bloodshot eyes walk into a Colorado marijuana dispensary.
One of the store’s salespeople, known in the industry as a “budtender,” stands near the entrance at a disposable-vaporizer pop-up display and shakes his head when he sees them: No way would these guys buy anything from LucidMood, the vape pen company that is there this afternoon to pitch customers.
That’s because LucidMood is not like other marijuana ventures. The company isn’t trying to sell to stoners. In fact, its mild-potency products are specifically designed for the roughly 160 million Americans who never got into smoking weed -- maybe because it left them too paranoid, too withdrawn or too cloudy. So while two stoned guys in their late 20s might be the target demographic for most other items at this pot shop, LucidMood’s vapes are probably too weak to even get them high.
But Charles Jones, LucidMood’s crafty CEO, is always up for a sales challenge. “Give me a chance,” he tells the skeptical budtender, and then welcomes the pair of potheads with a warm smile.
“Hi, how ya doing?” he says. “Do you guys have girlfriends?”
Four years after Colorado became the first state in the nation to allow recreational weed sales, the novelty of legalization has started to fade and the people who come into dispensaries tend to be people who already know they like pot. Since aspiring cannabis moguls like Jones can’t draw newbies with free samples outside a juice bar or coffee shop -- dispensaries are the only place where marijuana is legally available -- they have to contend with the fact that the best path to new pot consumers is often through old ones. The two men with bloodshot eyes, along with most of the other shoppers and employees at Colorado pot stores, therefore present a crucial challenge for a company like LucidMood: How do you convince heavy marijuana users to get behind a product that barely works for them, but might work for their lightweight friends?
Turns out, the stoner guys do have girlfriends. One of them apparently likes weed, but the other woman is what Jones calls “impairment-intolerant,” meaning pot makes her uncomfortably intoxicated or anxious. Jones understands people like this, because he is one himself. For decades, he was an “ambivalent, occasional cannabis user” who sometimes enjoyed the heightened sensations of being high but couldn’t handle the hazy, slow day that inevitably followed. Now LucidMood is his go-to source. Didn’t this guy want his girlfriend to give it a try?
As the stunned budtender looks on, the man with the bloodshot eyes and the pot-hating girlfriend reaches for his wallet. He buys two LucidMood pens.
The first time Jones went into a marijuana dispensary, back in 2014, he bought a gram of every kind of weed they had. At the time, he was a 52-year-old executive coach to Fortune 500 companies and had no intention of becoming a heavy marijuana user. But his background is in software and cognitive science, and curiosity got the better of him. He wanted to know what this big range of newly legalized products actually did. Everything he bought had a strange strain name, so he relabeled them based on what he found them good for: Creativity, Sex, Hiking, etc. This naming convention struck him as far more efficient than the 10-minute spiel the dispensary’s budtenders had given him about the supposed differences between the strains. Maybe, he thought, he was onto something here.
The project was hard to continue after a while; the weed left him foggy for at least 24 hours. So he started researching and discovered that the negative side effects he’d thought were an essential part of the cannabis experience -- the social anxiety, the short-term memory loss, the lethargic hangover -- were often the result of too much THC, the chemical in pot that causes a high. These negative effects could be mitigated, Jones learned, by using a 1:1 ratio of THC to CBD, the other main active chemical ingredient in the plant.
Now he was seeing a business opportunity.
He developed a set of custom formulations with the kinds of simple names he was once using for his personal use -- like Relax, Energy and Sleep. Then he raised a quarter-million dollars, hired a Ph.D. neuroscientist to help him refine his products and testing methods, and organized clinical-style trials with 600 weed-averse people.
“Are you sure this is pot?” one middle-aged woman asked at an early LucidMood testing event. “I don’t feel anything.”
Yes, it was pot, they told her. Twenty-five minutes after she hit the vape, one of her teenagers called and she stepped out to answer the phone. When she came back in, she said, “I’m sold. I talked to my kid, I had no problem at all, and when I went to the bathroom just now, I realized I’m actually pretty fucking high.”
The positive testimonials continued to roll in. Some test subjects said they’d been limiting cannabis to weekends but could now use LucidMood on weeknights. Others with medical problems said LucidMood helped them be functional and pain-free during the workday. And jackpot: Test subjects who had quit marijuana years ago after too many bad experiences said they finally found something they like. Jones got excited. At the end of 2016, he gave samples of his LucidMood vape pens out to Colorado’s cannabis dispensaries, confident the product would soon be flying off shelves across the state. But he didn’t anticipate exactly how retail in the cannabis world worked. A product didn’t just sit on a shelf, awaiting discovery by consumers. He’d need to first win over any dispensary’s most ardent cannabis connoisseurs: the budtenders. “It was freaking disastrous,” Jones says.
The product, it turned out, would be the easy part.
As the primary people who customers interact with at a dispensary, budtenders have enormous influence. They function like a concierge -- listening to people’s needs and habits, and offering a product to match. Industry data shows that more than 90 percent of consumer-buying decisions are based on budtender recommendations. To even reach consumers, a new product manufacturer must first win over the budtenders -- and in Colorado, this turned out to be a big problem for LucidMood.
“They were like, ‘It tastes like aromatherapy. I didn’t even get high,’” Jones says. This was a tolerance problem; most budtenders use cannabis every day, so LucidMood, which is designed for lightweights, had no effect on them. Budtenders then just figured the project was garbage. Only one out of every eight dispensaries Jones sent samples to was willing to stock it. Jones searched for a solution. It couldn’t be advertising; because weed is still a federally illegal drug, advertising opportunities are limited. He realized he needed to somehow win over the budtenders, so he began organizing meetings with them to explain his product. But that was a waste of time -- the budtenders were yawning, drinking coffee and unconvinced. He decided to try a new approach: He’d ask people who love weed about the people in their lives who don’t.
“People who are enthusiastic about cannabis might think it can help someone in their life,” Jones says. “So we would go and talk to the buyer and say, ‘Do you have a spouse?’ The manager’s wife is often the one. And they would say, ‘Yeah; we can’t get her to use any cannabis products.’”
Jones started working to get LucidMood vape pens into the hands of those people. At the Village Green Society dispensary in Boulder, for example, the budtenders hated LucidMood, but one manager had been trying unsuccessfully to get his mother to use cannabis for her pain and anxiety. He agreed to give her a LucidMood product. Less than a week later, the shop placed an order. The budtenders finally understood it.
“It’s definitely for people who want a very mild high, because it doesn’t get you stoned out of your mind,” says Rachel Sukhovitsky, the current Village Green Society manager. “But they sell really well. A lot of people like them.”
With this new strategy, LucidMood’s fortunes changed. At first, only about 12 percent of shops Jones had contacted would take the product; now 80 percent were. And the approach began creating new opportunities too. Whenever a new dispensary ordered LucidMood, he required the store to do an in-store demo, like the one where he asked the guys with bloodshot eyes about their girlfriends. That way, he could show budtenders how easy it was to sell the product, even to frequent marijuana users, by bringing up the subject of people they knew who weren’t as into pot.
Soon Jones figured out the golden ticket: If he could get a store manager’s mom to use LucidMood, that store manager would repeat the story to everyone.
“If you have one brand champion for your product per dispensary, things go well,” Jones says. “You just need one person who really gets it. And if that person leaves the dispensary, we find someone else.”
The strategy is working. By early this year, LucidMood had become the top-selling disposable vape pen in most of Colorado’s dispensaries where it had been on sale for more than three months.
Two years after LucidMood launched in Colorado, John Kagia, chief knowledge officer for the Washington, D.C.–based cannabis research and analytics firm New Frontier Data, heard some numbers that caught his attention. One of the dispensaries stocking LucidMood had reordered from the company five times in five weeks, each time thinking it was picking up a month’s supply.
“Customers don’t come back to buy a product that doesn’t work,” Kagia says. After that, he started paying close attention to Jones’ work. “At a time when so much of the industry and its products were aimed at existing, regular consumers, they understood that there would be very significant opportunity to serve both new and infrequent users.”
But while LucidMood’s market strategy may be novel, its actual product lives in an increasingly crowded field. Jones isn’t the first guy to sell cannabis based on how individual strains will make a user feel -- sleepy, excited and so on. And at this point, there’s little science behind any of it, says Jay Czarkowski, a prominent cannabis investor and consultant and the founding partner at Canna Advisors. He knows and likes Jones but cautions that most effect-based products are relying almost entirely on anecdotal evidence.
For a company like LucidMood, though, that all means one thing: It has to make its own case to consumers -- and do it faster than its competitors. To accomplish this, Jones has developed two valuable new strategies.
The first is to target dispensaries and delivery services that primarily serve tourists, women, seniors and other groups that are less likely to be regular cannabis users. These people often have no prior experience with legal marijuana, which means they’re intimidated and perhaps a little put off -- but open to finding a brand they trust. Lauren Petersen, the general manager at Silverpeak Apothecary in Aspen, says LucidMood has become one of her go-to products for out-of-towners. “It’s more relatable to customers who come in and are newcomers, and it’s not as intimidating as crazy strains like Green Crack,” she says.
The second strategy is to move very early into states where cannabis becomes legal.
This past spring, for example, LucidMood launched in Maryland just as the medical market was beginning. The number of registered medical cannabis patients there tripled in the first half of 2018. And once the local budtenders understood the product, they’d introduce it to people who were often walking into their very first dispensary.
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This serves two purposes, as Jones sees it. There’s the simple first-mover advantage, where a brand locks in a consumer by just being there first. But more important, LucidMood is a good on-ramp for these new consumers. If they buy something strong from a dispensary, they may feel overwhelmed and never return. But his light product may bring in repeat business. “Once people tried it, it sold itself,” says Abigail Diehl, who is responsible for getting LucidMood on dispensary shelves in Maryland. “Everything else gets you super high. People don’t need to get that high. It’s the soccer mom pen.”
And Diehl now represents another, largely untapped customer base for LucidMood. She’s a regular cannabis user and enjoys being high -- but, in truth, wouldn’t mind dialing back the experience when she needs to be sharper. “You’re not going to have that solid, THC head high where you’re intoxicated and messed up,” she says.
That may be a harder sell for the budtenders, but Jones isn’t intimidated. He’s sold the seemingly unsellable before. And the industry is just getting started.