Gary Vee Has Some Important Advice for Cannabis Entrepreneurs
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Last month, thousands of cannabis industry professionals descended on Santa Rosa, California for the Hall of Flowers cannabis trade show. The highly-anticipated event brought together top cannabis brands, retailers, creatives, and media together under one roof (actually three) to share, showcase, and discuss their products.
Many big names were in the house participating in a speaker series, including Berner, Chelsea Handler, Al Harrington, and Dr. Dina. Gary Vaynerchuk, the chairman of VaynerX, CEO of Vayner Media and a social media giant, was on hand to answer questions and to offer his own brand of brutally honest but inspiring advice to budding entrepreneurs.
Never one to mince words, Gary Vee had lots of opinions about where the cannabis business is, where it's going, and how to succeed in the game. Here are 5 takeaways.
1. Don't hold your breath about cannabis going federally legal.
While some have boldly predicted that the federal government will legalize cannabis in the next two to five years, Vaynerchuk is not in that camp.
"If I'm a betting man, I think that the state-by-state reality will be in play probably in perpetuity," he said to a standing-room-only crowd. "And so I do think that people that are going for it and are really trying to remain at large scale, we'll need to diversify. He predicts the continuation of multi-state conglomerates "like the wholesale liquor industry, that become national, and use their scale to leverage being in 27 states instead of one to have a competitive advantage."
What does that mean for small businesses?
2. Build your brand
Vaynerchuk believes the best insurance policy against big cannabis, big pharma and big tobacco taking over the industry, is to build a strong brand.
"Brand is the only protector to lots of money and lots of scale," he said, offering the same advice he would to any entrepreneur in a nascent industry. "Slow and steady. Execute. Build the brand. Bring value to people that are trying to put your product in their stores. Build awareness around its brand."
He stressed the importance of staying true to your own vision. "Do not let outside forces dictate anything that you are thinking about," he said, even when you read every day about companies merging and closing billion-dollar deals. "Your success doesn't have to be measured by somebody else's success."
Vaynerchuk predicted that many of the well-funded cannabis businesses are going to go broke. "Well-funded companies are going to spend their money on dumb fucking executions and marketing events and other shit. Just because you have a lot of money, doesn't mean you're going to spend it well," he said.
Related: 11 Cannabis Predictions for 2019
3. Produce lots of content at scale
Vaynerchuk has made a fortune branding himself through his podcast, Instagram and books, so it's no surprise that he's bullish about content marketing. And don't start with him about Instagram's harsh restrictions on cannabis companies.
"The amount of people in this industry that cry about not being able to buy Instagram ads is maybe the most laughable thing I've ever seen in business," Gary Vee said. "For everybody who is so frustrated that you can't run Facebook and Instagram ads, how about the fact that you're in a business where everybody loves the fucking product?"
He suggested refocusing your energy on other content such as podcasts, not just for marketing but for posterity.
"Most people think that other people are not interested in their shit. The reason most people don't post is they think. Why would anybody care? My big thing is if you just documented for your great grandkids to listen to in 70 years, that's enough of a reason to put out content and put out a podcast. If nobody ever listens, let me promise you somebody who lost both of his grandfather's before he to know them, I would have listened and so you should just be putting out content for your legacy and you're going to really enjoy having it when you're 99 and then if something good along the way happens for your business, that's just extra."
Podcasting isn't your thing? Vaynerchuk had some other suggestions for getting your brand's message out there:
- Apparel "has clearly been something that a lot of people have been flirting within this space," he said.
- LinkedIn "When I come back here next year," he told the audience, "I have a funny feeling a couple of you are going to grab me and talk about how LinkedIn worked for you."
- Alexa "Have you started thinking about sound or voice, whether it's Alexa or Google home?" Vaynerchuk asked. "You should be thinking very heavily about what is the three-second jingle or sound that represents your brand. And pound that in the consciousness of the consumer and then use it.
4. Focus on wellness opportunities
Vaynerchuk admitted to being more intrigued by the health benefits of cannabis than the recreational side.
"There are things that this product is so disproportionally capable of helping, where people are using much worse substances to address whatever pain they are dealing with mentally and physically. That is going to be a space that will continue to evolve over the next hundred years of your life," he said.
"I believe the health benefits are disproportionately fascinating from a financial and rewarding standpoint."
5. Sit down be humble
A lot of newbies to the industry don't know a lot about the plant, but they make up for it by either "making shit up" or being "scared of putting content out," Gary Vee said. Neither approach works. Vaynerchuk said it's better to honest than wrong.
"You put out content every day. If it starts with, 'I'm curious about it, or 'I'm going to go on a journey to figure out if', or 'There's something in my gut that tells me'," then you're more likely to win people over, he said.
Vaynerchuk let the audience in on a little secret as to why he has over 5.5 Instagram followers. "The biggest difference between me and the majority in the market is every time I put out a piece of content, I literally -- through my brain, through my fucking soul -- think, What's this going to do for them? Ninety-nine percent of people when they post think, What's this going to do for me?"
6. Be a tortoise
Towards the end of Vaynerchuk's panel discussion, he was asked an emotional question by an OG grower that was on the minds of most entrepreneurs at the Hall of Flowers show: Do you sell out when the market's this hot, or do you hang in there and risk the chance of being flattened by the bigger, better-funded competition.
"How do we protect our brand? How do we not get it stolen from us?" the grower asked.
"By not taking the money," Gary Vee said. "By owning 51 percent of the business."
He explained that he could have raised a $300 million fund a few years ago but passed because he didn't want to sell out. "I didn't want to be an investor. I didn't want to be a VC. I didn't want to take the money because I didn't see my self-worth or my happiness predicated on me making $25 million a year by investing in other companies. I wanted to do what I wanted to do."
As Gary Vee sees it, green entrepreneurs have two options: Negotiate a deal with a larger company that retains your leverage or "just stay really slow with tried and true," he said. "Be a tortoise. Do your thing. It's your passion. Do you know how many people in this industry right now that are just jumping into the next hot thing? If you love it so much -- and there's some real passion in the OG shit --you could just stay slow."