Subscribe to Entrepreneur for $5
Subscribe

Why Celebrities Keep Jumping Into The Cannabis Industry

Are smaller brands in danger of being overshadowed?

By
This story originally appeared on Benzinga

Cannabis and celebrities seem to go hand in hand.

Some celebs have decided to become part of the industry as brand ambassadors, while others have launched their own brands. Musicians, actors and athletes have expressed their love for the plant.

But why now? Is it because the stigma around cannabis has faded more than ever before? Or because of industry growth and the accompanying lucrative opportunities?

1933 Industries Inc. CEO Paul Rosen told Benzinga that “the industry has crossed a tipping point from an object of curiosity to a recognized credible emerging asset class promising the potential of high growth.”

The pandemic, Rosen said, has provided celebrities with new ways to monetize their brands with podcasts, Twitch performances and content subscription services such as OnlyFans.  

For most celebrities, money is an important motivator.

“This is just another way for a celebrity to leverage their own brand equity and to be crass to make money," Rosen says. "They all have their own reasons, but behind the individual narratives the one common denominator is money which as far as I can tell celebrities like as much as anyone else.”

But there's at least one celebrity who is spiritually motivated by cannabis. 

The who's who in celebrity-backed cannabis

Last week, guitar legend Carlos Santana spoke with Benzinga about the creation of his high-quality cannabis and CBD brands via a partnership with Left Coast Ventures. In October, Mirayo by Santana — a line of cannabis products influenced by Santana's Latin heritage and his dedication to spiritual well-being — was launched. Mirayo, which means “my ray,” is meant to help people find the light inside them, Santana said.

When growing up, Santana was familiar with the plant’s healing properties, thanks to his mother. Throughout his career, he talked about the benefits of cannabis, from alleviating pain and stiffness to awaking consciousness and creativity.

Doubtless, Santana’s approach to cannabis is and has always been spiritual.

"Cannabis is a window or a door to a different awareness of consciousness," Santana said. 

The star of Happy Place and Disney's Frozen, Kristen Bell teamed up with the Cronos Group Inc. to launch a CBD skincare brand Happy Dance.

“I don’t need another paycheck, so how are we going to do good in the community here,” Bell said. The Veronic Mars actress is reportedly involved in all steps of creating the new brand.

She is also collaborating with A New Way of Life Entry Project, an organization that provides housing and pro bono legal services for women needing to restore their lives after prison.

The three initial products are cruelty-free and vegan with affordable price tags. The company is donating one percent of profits from all products sold on the brand’s website to A New Way of Life Entry Project. 

“As a working mom, I turned to CBD skincare as a way to turn down the volume of my life," Bell said, "and CBD products have since become an essential part of my self-care routine.” 

In 2020, many celebrities took after Santana or others who joined the cannabis space even before him, such as Seth Rogen and Evan Goldberg, Snoop Dogg and Karan Wadhera. 

Celebrity newcomers

In July of 2020, Killer Mike and El-P, rappers collectively known as Run the Jewels,

partnered with a lifestyle and cannabis brand Cookies and its sister brand Lemonnade, to launch its first cannabis strain Ooh La la. 

In June, Wu-Tang Clan member Method Man launched a cannabis business with the goal of encouraging more black owners to join the industry. The company was named Tical (like Method Man's 1994 solo debut album), which stands for “Taking Into Consideration All Lives.” The company went on to raise $300,000 for its initial launch.

Chelsea Handler also touted a new line of cannabis products.

Timed to coincide with the premiere of her latest stand-up special, “Chelsea Handler: Evolution,” Sweet Flower joined up with the comedian to introduce the Evolution Kit, a curated set featuring Handler’s favorite cannabis products.

At least two Academy Award Winners have attached their names to cannabis brands.

Nicole Kidman, who won Best Actress for The Hours, became the first-ever brand ambassador of Sera Labs Inc., a health, wellness and beauty company known for its CBD products. Sera Labs was acquired by CURE Pharmaceuticals Holdings for $20 million. Kidman “easily” agreed to endorse the company’s topical products.

"With my injury last year, I experienced the benefit of CBD wellness products firsthand," Kidman shared.

Goop CEO Gwyneth Paltrow, who won the Best Actress Oscar for Shakespeare In Love, invested in cannabis beverage brand Cann. Other big names joined her, including Ruby Rose, Rebel Wilson, Darren Criss, Baron Davis, Tove Lo, Casey Neistat and Calesha Murray (aka Bre-Z).

Paltrow said that cannabis is a “hero ingredient of the future.”

Grammy Award-winning artist and radio personality Khaled Mohamed Khaled — better known as DJ Khaled — recently partnered with CBD company Endexx Corp. to launch a new CBD company with products.

"I was drawn to Endexx Corporation because they're an innovative company that has proven they have the keys to deliver consistently, top of the line, high-quality products," Khaled said.

Industry veterans also grabbed headlines

Some celebrities who joined the industry earlier made some major business moves this year.

For example, music industry mogul Shawn Carter, known as Jay-Z, joined a newly formed cannabis company last year. The venture was formed via a partnership between Caliva, Left Coast Ventures, Subversive Capital Acquisition Corp. and Roc Nation, Jay-Z's entertainment company. The company now operates as The Parent Company and trades in the U.S. as TPCO Holding Corp. Back in February 2018, the "Domestic Goddess” Martha Stewart took an advisory role at Canopy Growth Corp to help develop a new line of CBD products across various categories. This year, Stewart launched several CBD products, including a holiday-inspired CBD gummies line.

American actor, comedian and musician, known for starring in According to Jim, and Saturday Night Live, Jim Belushi joined the cannabis industry in 2015 as a legal cannabis farmer with a 48-plant crop.

Belushi told Benzinga that his mission in the industry is "to break even, because the purpose, the power of this plant, serves the greater good."

In 2020, Belushi’s Farm partnered with Curaleaf Holdings Inc. to create a vape pen for the Oregon cannabis market.

Former NBA star and four-time champion, John Salley is no stranger to the cannabis industry. He has taken up several cannabis ventures in previous years. Salley, who is also a member of the Benzinga Cannabis Advisory Council, announced this year that he plans to create a health insurance package for cannabis companies, their employees and cannabis users.

“We’ve literally got to a point where we can insure cannabis smokers and cannabis companies,” Salley said.

Furthermore, this October, Salley became the vice president of business development at CBD-concentrated wellness company, the Anthos Group, where he'll help launch a new brand focused on the needs of athletes.

Does a name make a difference?

One question that comes up with this subject is: How important is a famous face behind a brand and does it make a difference?

“They are celebrities for sure, but then there are the rare few that have created a devoted community," Holistic Industries’ CEO Josh Genderson said. "Jerry Garcia is at the top of the list when you think of cannabis culture and raising consciousness about cannabis in the U.S.”

Jerry Garica, of the The Grateful Dead, is the latest on a list of late celebrities whose likeness is being used on legal cannabis products. Others include Bob Marley and Jimi Hendrix.

Genderson told Benzinga that Holistic Industries has been contacted by several celebrities through the years with the idea of partnering, but the company decided to collaborate with Garcia’s family, introducing the new line in 2020.

“Jerry’s fan base is diverse in generation, geography and almost every other demographic," Genderson says. "What we all share is a sense of belonging to the unique community Jerry helped build. We wanted to give fans something new to celebrate in Garcia Hand Picked, while also creating something that would appeal to people who aren’t fans yet but know enough to try the products and engage with the brand. From eco-friendly packaging to Jerry’s original artwork, quotes from Jerry and suggested playlists for each strain, Garcia Hand Picked products and merchandise were designed specifically for the fans."

A long shadow

Does celebrity involvement mean that smaller brands are in danger of being overshadowed if they don't have celebrity backers? 

Rosen, of 1933 Industries, doesn’t think so. He says authenticity is the key.

“Consumers are super savvy and they have to love the product first and foremost not the spokesperson. I think this is a time and place event and over time I don’t believe that a good brand needs a celebrity to validate it unless the authenticity of the celebrity is beyond dispute,” Rosen said.

“Do I want to smoke a $50 Monogram joint because it has Jay-Z’s fingerprints on it? No doubt many will but the premium price likely is not borne out so much by the superior quality of the product as it is by the cool factor associated with an icon like Jay Z," Rosen added. "And to answer my own question, I definitely want to try one of those $50 joints by Jay Z, but I doubt I would make a habit out of it. As much as I am a massive Jay Z fan, that shit is just too expensive.” 

Indeed, famous names help spread the word on weed. So while the cannabis space appears big enough for both celebrity-backed and non-celebrity-backed brands, celebrity influence on breaking the stigma around the plant should not be underestimated.

As for whether the trend will continue in 2021, Rosen expects it will.

“To quote the philosopher Eric Hoffer…when people are free to do as they please they usually imitate each other," Rosen said. "So absolutely yes more will follow out of a sense of FOMO and opportunity.”