Marijuana Business Magazine July 2018

¬NFUSED BUS¬NESS STRATEG¬ES T he brothers behind the Seattle- based Zoots brand initially con- sidered taking their lozenges, baked goods and other cannabis- infused products national by getting licensed in each state and setting up shop. But then the three siblings did an about-face and decided to get other companies to do the work for them. The Devlin brothers – Patrick, Michael and Dan – founded Natu- ral Extractions in 2015 to hold the trademarks, copyrights, recipes and other proprietary information involved with Zoots. The Seattle company used licensing deals to expand the cannabis brand from its home state EXECUTIVE SUMMARY The three brothers behind the Zoots brand were the first to receive a license to manufacture cannabis-infused edibles in Washington state in 2014. To grow their brand, the three siblings founded Natural Extractions in 2015. Natural Extractions used licensing deals to expand Zoots from Washington to Colorado and Massachusetts, and it now has its eyes on additional markets. The company’s strategy involves: • Using licensing deals to cut the cost of building facilities in new states. • Acting as a consultant and sending staffers to new states to work with licensees on various stages of the manufacturing process. • Helping its manufacturers be more space efficient by shipping licensees packaging materials and dry goods – including chocolate, flour and sugar – on an as-needed basis. • Promoting Zoots by dedicating 5%-7% of gross annual revenue to marketing. Licensees also assist in marketing Zoots by keeping budtenders educated about the benefits of the products, asking for highly visible shelf space and using in-store advertising. of Washington to Colorado and Massachusetts. Under the company’s business model, Natural Extractions gets paid a fee from licensees that want to make and sell Zoots products. The edibles manufacturers help Zoots reach new markets and transform the label into a national cannabis brand – without Natural Extractions having to shell out big bucks to establish manufactur- ing and marketing operations in each state. In return, the licensees consult with Natural Extractions’ staff on how to set up production facilities, what equipment to buy and how to create Zoots brand products. Licensed to Thrive A Washington state edibles company uses licensing to expand its Zoots brand nationwide, allowing it to avoid pricey construction and marketing costs By Adrian D. Garcia The Bronnor Corp. makes Zoots products in a Colorado facility through a licensing agreement with Seattle-based Natural Extractions. Photo courtesy of Natural Extractions 98 • Marijuana Business Magazine • July 2018