Marijuana Business Magazine May-June 2019

May-June 2019 | mjbizdaily.com 69 A growing number of cannabis- infused product manufacturers are using licensing agreements and manufacturing partnerships to have their products produced and sold in new marijuana markets. It’s a sound strategy for growth, said Kristi Knoblich Palmer, co-founder of Kiva Confections, an Oakland, California-based infused product manufacturer that has used licensing agreements to expand outside the Golden State and into Arizona, Hawaii, Illinois, Michigan and Nevada. Licensing agreements, she noted, help you achieve greater brand awareness and can help you prove your brand as a leader in the industry—and, of course, the added revenue is good for your bottom line. “These agreements help the brand gain national exposure,” she said. “We see out-of-state expansion as a way to create relationships with consumers and gain their trust. Whether it’s their first expe- rience or they are a seasoned veteran, having consumer trust and a positive reputation in (a new market) will help us immensely when prohibition falls.” Here, Knoblich Palmer shares tips for how to strategically expand into a multi- state brand. 1. IDENTIFY KEYMARKETS As legalization of adult-use or medical marijuana spreads, cannabis-infused product manufacturers have more choices for where to expand their offerings. “In 2013 and 2014, the criteria for out-of-state expansion was much narrower than it is now—you were looking at any state with a cannabis program,” Knoblich Palmer said. “Now, there’s a wider spectrum of states and markets to choose from.” That means cannabis companies can be more selective about the markets in which they participate, Knoblich Palmer said. When eyeing expansion to new markets, consider: • Population and patient count: You want to tap into a healthy head count of adult-use consumers or a market with an increasing number of medi- cal marijuana patients. Markets with larger general or patient populations offer robust market share opportu- nities for brands. Examples include Michigan, a future recreational state with roughly 10 million residents, and Arizona, a healthy medical mar- ket with more than 186,000 patients. • The geographic location of a market, and its ability to influence other states in the region: Massachusetts is a good example: It is the only state in the Northeast that currently has recreational cannabis sales, and it’s close to a number of populous states looking to launch recreational marijuana programs. Massachusetts also attracts roughly 28 million visitors a year, which means there’s ample market opportunity. • Rules that allow out-of-state patients to purchase cannabis: Hawaii, for example, allows patients with valid medical identification cards from other states to purchase marijuana at its licensed dispensaries. The co-founder of California’s Kiva Confections shares four tips for expanding to new markets and identifying the right manufacturing partners. A Multistate Brand Building By Joey Peña