Weekly Wrapup: 5 Cannabis Business Takeaways From Denver 4/20 Events

Image for wrapup of medical marijuana news

Last week, we wrote about how some medical marijuana companies in Colorado decided to target the recreational crowd for the first time on 4/20 in light of cannabis legalization, seeing it as the perfect opportunity to begin tapping a new market.

We got a first-hand look at both the risks and rewards of this strategy over the weekend. Events tied to 4/20 in Denver showed the cannabis business community that:

#1. The market for the recreational use of marijuana is unquestionably massive, as tens of thousands of users converged downtown for a rally and, separately, another 10,000-plus at the first-ever US Cannabis Cup held about two miles away. Related concerts and other events drew thousands more. The companies that can effectively market to this crowd are in line for some major growth in the years to come, in part because…

#2. Recreational users are extremely excited about legalization and, just as importantly, willing to spend money. Cannabis Cup attendees – a recreational-use minded, mostly 20-something crowd with a slight advantage toward males over females – seemed pleased and happy to be there once they got inside, eagerly engaging with each other and with exhibitors. All the vendors appeared to be doing a brisk business, even those at the far reaches of the exhibit hall.

The first-ever US Cannabis Cup attracted huge crowds.

The first-ever US Cannabis Cup attracted huge crowds, underscoring the immense business opportunities created by legalization.

However, cannabis businesses are in for some challenges because…

#3. Competition will be fierce and marketing will be challenging. Exhibitor and vendor tables at the Cannabis Cup were sold out well in advance. Vendors offered a broad range of goods and services, from clothing to home-growing and home-extraction equipment to paraphernalia and edibles. Reaching adult users through traditional channels will be difficult – in part because of expected restrictions on marketing to under-age users, much like cigarette manufacturers have faced in recent years. Vendors were going all-out to jockey for attention (see next point below) and there were many of the same types of exhibitors at the event, particularly head shops, merchandise vendors and hydroponics equipment providers.

Aside from competition, cannabis businesses focusing on the adult-use market could experience setbacks because…

#4. Professionalism and legitimacy will likely prove elusive for some time. For one, there were some noticeable hiccups at the Cannabis Cup. The sheer number of people – and the lack of crowd control – at the event prevented attendees from flowing freely around the venue. Some exhibitors were sold tables that didn’t in fact exist, leaving organizers to scramble for solutions. What’s particularly surprising is that the logjam was entirely predictable. Tickets and exhibitor tables to the Cannabis Cup sold out weeks ago, and there has been much buzz and anticipation about the event in its run-up.

Many attendees smoked wherever they could get a little elbow room, despite signs such as this one.

Many attendees smoked wherever they could get a little elbow room, despite signs such as this one.

Additionally, the crowd at times lived up to its reputation. The first-aid tent did a brisk business assisting attendees who had over-consumed, and the venue guidelines about where consumption was allowed were unclear, and thus largely ignored. This could reflect poorly on exhibitors that have built a solid, professional reputation in the medical marijuana space and are now attaching their brands to this crowd.

Lastly, one stereotypical marijuana marketing tactic was on full display: Half-naked girls peddling bongs and pipes. Not exactly the best image for a business still trying to gain legitimacy with the masses.

The industry’s reputation will also take a hit because…

#5. A shooting at the 420 rally downtown will give anti-marijuana advocates another reason to bash the industry. Thankfully, the direct injuries inflicted on the three people and one animal hit – as well as the secondary injuries naturally sustained when a large crowd scatters quickly – were not life-threatening. However, the stories hitting the mainstream press about the annual day of celebration and activism to legalize cannabis were dominated by the search for suspects, the aerial video of rally-goers streaming from the park immediately following the incident and the conditions of the victims.

Even though these types of incidents unfortunately occur at all types of events these days – including Denver’s summer jazz festival last year – and are not necessarily reflective of the gathering’s purpose, it will no doubt hurt legalization efforts at a critical time. Everyone should be breathing a huge sigh of relief that the shooting happened at the open-air park with no fencing, rather than at the jam-packed, enclosed and chaotic Cannabis Cup.

In a nutshell, the potential for this market is huge, as we all know. The challenges will be to exude professionalism to help spread legalization and win over the public, market effectively to beat out the competition, and convince those outside of the target market that the downsides associated with legalizing marijuana for adult use will be worth it.

Other top stories in MMJ Business Daily last week:

1st Dispensary Opens in Rhode Island

Fate of San Diego Dispensaries on the Line

Cannabis Legislative Roundup

Photos by Cassandra Farrington

5 comments on “Weekly Wrapup: 5 Cannabis Business Takeaways From Denver 4/20 Events
  1. Dustin Arth on

    Couldn’t agree more about the image problem with MMJ. There’s a website called Hopegrown.org that is aiming to change the image of MMJ launching in Sept. If you go there now you can see their video about their mission! I’ve been sharing with EVERYONE!!

    Reply
  2. Kayvan Khalatbari on

    Too bad no one likes to pay focus to the good parts of 4/20 like the Green Team! Businesses aren’t as unprofessional as the media would like to make people believe. Two states, 160+ volunteers, over a dozen businesses IN THE INDUSTRY, two very large marijuana celebrations, four years and a hell of a lot of respect from the people actually on the ground….no mention outside of a great piece in the Denver Post. Maybe if you focus on the good, the good will start breeding.

    Reply
  3. Timothy Tipton on

    COLORADO:NOW THAT WE HAVE WON, Let’s Be Clear….

    CO:” WE THE PEOPLE” BEAT The DUI-D BILL Marijuana Postponed Indefinitely!!
    Driving stoned bill fizzles in Colorado Senate
    http://m.denverpost.com/denverpost/db_21611/contentdetail.htm?contentguid=49umOxFs

    This effort is a Fourth WIN for community activists, who kept a solid pace to KILL THE BILL again, this year.

    Further proof, is also illustrated by the recent U.S. Supreme Court ruling (Blood Draws Now Need Warrants), that their is no Science Based Test for Impairment by marijuana, to date.

    Again, this effort is a Fourth WIN for Grass-roots non-funded community activists, who have kept a pace to KILL THE BILL this year again.
    BIG VICTORY for Science and Impairment based prosecutions, and further effort towards an eventual END to Prohibition.

    This WAS NOT a win created by Safer, Sensible Colorado, MMIG Medical Marijuana Industry Group, ASA Americans for Safe Access, NORML, CONORML, DRUG POLICY ALLIANCE, LEAP, or Others. These groups, in the past, have positioned Lobbyists in the ‘alleged’ “SELLOUT” position which benefitted their Business interests, oftentimes ignoring the interests of patients. This has worked to their detriment, and in the end, “WE THE PEOPLE”, a grass-roots effort prevailed. “It is sorta like a David and Goliath WIN,” said Court-certified cannabis expert Timothy Tipton. “It’s About Time The People untangle the perverted Lobbying Mess at the State Capital. I SMELL FREEDOM!”, a quote he received in Time Magazine’s December, 2012 issue. This came after passage of Amendment 64 Recreational Marijuana.

    Untiring work and Deserving THANKS Goes to folks like Kathleen Chippi, Rico Colibri, Michelle LaMay of Cannabis University, Jessica Cheesecake, Audrey Hatfield, Jesica Cheesecake, Timothy Tipton, The Rocky Mountain Caregivers Cooperative (1,000+Legal Medical Cannabis Patients, since 2005), the Cannabis Therapy Institute, The Cannabis Policy Project, Colorado Coalition for Patients and Caregivers, and a whole host of unnamed volunteers.

    Anti-Prohibition activists say, wnow the focus of future efforts will naturally gravitate towards untangling all Marijuana related laws “On the Books”.

    The 5 nanogram standard was long consider by many as having nothing at all to do with Impairment. Statewide statistics did little to bear out any possible evolving problems with marijuana impaired driving since Colorado became a medical marijuana state in 2,000.

    Other, of the Eighteen Legal Medical Cannabis States also show no relevant increase in driving fatalities, or otherwise.

    Reply
  4. Billy Downs on

    There are going to be hiccups as the underground whines and bellows about legalization. Unfortunately the way they communicate is through violence.

    Security, communication, and cooperation with law enforcement on local and state level is vital to make these events safe to the public. Otherwise the gangs and the press are going to have a hay day with this movement.

    Reply
  5. Timothy Tipton on

    SORRY, BILLY, But WE are NOT at Legalization! Do you see it? Oh, that’s right, you MUST be one of those in a Business ‘Catbird’ Position to Monopolize Both MMJ and Recreational. SORRY, But THAT is NOT gonna happen!

    WE THE PEOPLE, NOT “Underground whines and bellows”
    will redirect your situation to more the ‘Mom & Pop’ Level playing field of opportunity. KEEP BIG MONEY LOBBYING behind the scenes, But as with your paid off politicians, WE, the Old school Long Term Medical Patients, who you have been Financially gouging will lead to your demise.

    AND, for your information, over the years the Rocky Mountain Caregivers Cooperative, 1,000+ Legal Cannabis Patients Statewide since 2005, has had Nine Amendment 20 Compliant facilities, ARE friends of LAW Enforcement, and have NEVER been RAIDED, or other problems. But, keep up your rant, WE “THE PEOPLE” are listening!
    http://www.Legalize2012.com will Educate you further, as to EXACTLY what Legalization is. Be Well

    Reply

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