Article11 Defining Markets In The Global Cannabis Space, Business Strategy, And Goals
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We Return with our Latest Recording from MJ BizCon, today we are joined by Marc Lakmaaker from Audacious. Marc discusses his prior Cannabis Industry experiences, and how working with a Variety of Brands across the Globe has positioned Audacious to take on some very Audacious Goals!
We also discuss the Importance of U.S. Legalization and Policy Reform, and how the benefits of the SAFE Banking Act, & the MORE Act are vital pieces that can Connect the Cannabis Brands with their End Markets.
Hosted by Chris Day and Jill Reddish of The Global Cannabis Network Collective (GCNC), The International Cannabis Conversation takes a look into what's driving the global business landscape of cannabis.
They discuss international cannabis challenges & solutions, and trials & lessons.
Music - "Plantains and Bananas" by Noah Peterson
Global Cannabis Network Collective Website: https://alwaysdriveinnovation.com/
To reach the show: email@example.com
Chris: Hello, everybody, and welcome to this edition of the International Cannabis Conversation, I am your host, Chris Day, founder of the Global Cannabis Network Collective and your fellow voyager around the world as we talk about emerging markets and expanding markets in international cannabis. Today I have Marc Lakmaaker. Did I do alright Marc?
Marc: You did a great job there.
Chris: All right, we're trying. SVP of Communication and Capital Markets for Audacious. So Audacious. Pretty new name on the scene has some Audacious goals based on some of our discussion in the show prep. But why don't you give folks both a little bit of your background? Let's give a 30 second version of Marc and then we'll talk about the company and what you're looking at.
Marc: All right, excellent. Thanks very much for having me here, Chris. It's always nice to be talking about the companies that we work with. So as that, my name is Marc Lakmaaker, I've been in the cannabis industry for a good six, seven years now. I started working with a company called Bedrocan which is now part of Canopy. Then, went in-house with Aurora Cannabis, probably a fairly recognizable name in the industry.
Chris: Yeah two fairly recognizable names, actually.
Marc: For various reasons, yeah, when I was there I was for all the right reasons, but let's not go into that. But anyway, sort of deep exposure to the cannabis sector. I left Aurora in 2019, set up my own agency, and now obviously had been working with Terry Booth for years, and we got in touch again last December. And he said, I'm doing this new thing with what was then still Australis, which was the former spin off from Aurora. I got on board with Australis, which is now rebranded as Audacious, and we're executing on a really Audacious strategy.
Chris: That's great. You know, I think as we've seen the evolution of the industry, especially from some of those companies that you mentioned, you were at previously in sort of the learning curve that people have gone through, right? We're also starting to see the emergence of brands as part of the story, right? So early on, the company names, not a lot of thought went into it all the time, right? It's like, Yeah, we're just going to throw something out there, and magic's just going to happen. And now we see really great discussions around how are we going to cultivate responsibly? What's the sustainability model of the company? How do we want to present ourselves to the public? And so I know there's a lot of lessons learned in the industry across the board as you're looking at continuing to grow Audacious. What are you looking at now that you feel like really gives you a competitive advantage or a new pathway to build success?
Marc: Yeah, I think we're in an industry that is maturing, and I think we're sort of at a plateau phase where we're now seeing companies being led more professionally, more focused on fundamentals and doing things right in response to how the market is reacting to them. I think if you look back at the Canadian LP experience that we had, you know, there's a lot of mud thrown at the LPs, but I think people should remember that we were operating based on the best information available at the time. And you know, some of that information was probably a little overoptimistic, but that's what companies were executing on. So it's not maliciousness. It wasn't incompetent. It was just we're flying into a future that none of us knew what it was going to look like. So it's slightly different now. And I think what you mentioned earlier, so true, we're talking about the emergence of brands. Yeah. And I think for companies is really exceptionally important. For them to connect with their end markets, because end markets at that time were not very well defined, and I think now we're seeing that are becoming more defined. There's still a lot of growth to come. There's a lot of development to come. But I think the companies that will get it right are those that will develop products. Brands basically promises that are kept towards the consumers. So I always say, you know, so what does it take to be successful? That takes a lot of things to be successful. But at the bottom it for us, and that's where we feel we're differentiating is a very capex lights infrastructure have. We're not spending a lot of money ourselves on building infrastructure. We're actually working with partners who are building the infrastructure. We're helping them with them through our agency Alps, where design and engineering agency. And in return, we get the fees for helping them with that, but also with certain companies get part of that Canopy dedicated to growing our cultivars, which we then buy back at a low price cost plus, you know, five percent in some instances. But on top of that, that's just your infrastructure. On top of that, we've got the products, we have the brands and then you have to look at the distribution. And all of that is steered by the team. And we've got a very accomplished team with a very broad skillset.
Chris: Yeah. And so when when you start talking, you're based north of Toronto, in Ontario. But you told me your focus is long term global, but looking really at the U.S. market, correct? So. And looking at the U.S., I mean, we're sitting here in Las Vegas, Nevada at MJBizCon, and it's just convoluted as hell, man. So like when you look at all the individual states and how you operate? Yeah, I have to ask why? Like, nobody knows what's happening with federal legalization, how's that coming? So why take on that challenge?
Marc: And that's a great question, and there's a lot of answers to that. But in short, the U.S. market still has a lot of growth coming. Also the way things are structured right now with the regulations I actually quite like it that it's federally still a classified substance because what that means is that the big boys with the huge budgets can't come in and outcompete us simply with marketing budgets. And for me, I want to see the More Act pass. I want to see the Safe Banking Act passed because that will just remove a lot of nonsense that we have to deal with right now. But federal legalization for me doesn't have to happen now because it gives companies like Audacious, which is still fairly small, the opportunity to go through that rampant growth race, you know, and gain critical mass where we can engage as partners or competitors with the much larger companies out there. So back to your question, why do you ask the US is basically 50 different countries from where the cannabis is standing. From our perspective, each market has its own entry points and we're sort of got a very sophisticated model that tells us what part of the value chain we need to be in in order to be profitable or highly profitable operate on. And I feel that gives us a competitive advantage because we're not dealing with huge incumbents that are so well-established that older customers aren't beholden to them. So we're able to disrupt not just a one market, but in many markets, and all these markets all got tremendous growth to come. So it's the sheer size of the opportunity.
Chris: Yeah, I like the way you described it as sort of 50 countries. I've used that very analogy when I've talked to folks from, say, Peru or India or any of the European countries that are looking at the U.S.. Yeah. And I tell them, don't look at it as the United States as a whole, because if you do, you'll get burned. You need to think about the long term. Those things will eventually fade away. In some form or fashion, you'll need to be able to compete. But in the meantime, it's a fallacy to look at the United States as a market in totally.
Marc: I totally agree. And you're so totally right, because when I grew up in the Netherlands, you know, to me, it wasn't even the United States, it was America. It was sort of this homogenous entity. It and obviously it now live in Canada. I do a lot of work in the U.S. our headquarters are here. You start to learn the differences between the states difference and policies different in politics, difference and culture. Now, because culturally, it's a very diverse country. And you know, that's what makes it such a fascinating place to be.
Chris: Yeah, I recorded a show a couple of weeks ago and we were talking about Africa. Of course, I think if you don't spend a lot of time studying the continent, people describe Africa as it's Africa. It's an enormous continent and all of these countries, you know, we were specifically focused on the Congo. And there's two hundred million people, I think, in that country and you think of that, that's two thirds the population of the United States, one country with a unique culture and unique markets. And so being able to acknowledge that across, I mean, we all know California is definitely its own country. Yeah, right. You've got New York doing all of its things. Finally, Texas is on and those three states are the ones that when you talk to people internationally, they just assume is the United States.
Marc: Yeah. And that's so wrong. It's like, what do people know about Omaha? What do they know about Nebraska? It's like it's very little known. I mean, I don't think many people can actually name the 50 states, right? But each state has got its own character, and that's something that people kind of should know. Yes, because like I come off sort of a small country, the Netherlands, where the physical distances are small, but the psychological distances are huge. And I think people see here, like a city like Toronto, for instance, it's got a periphery with lots of other small towns, but it's kind of one homogenous unit. Whereas in Holland, it's like one city, 20 kilometers down the road that might speak in a very different dialects. But still get like Toronto or New York or Chicago, they're very different from each other. Same as every state is very different. I think for the cannabis industry, that translates into the need to be able to adapt to local circumstances. Some of those are hard set like regulations, but some of those are cultural and you know, that's what you need to be able to do, not just deal with the local variances and regulations, but being able to discern where your audience is, where your consumers are, where your products need to go, what products you need to put into the market. I mean, one good example for us, we're operationalizing a facility in Missouri. But before we hit the market with that, we're not just going to sell what we sell elsewhere. We're doing a deep study of what is going to work in this market that will enable us to operate profitably.
Chris: Yeah, that whole profitability thing is important. And it's been forgotten often in cannabis, as often happens at the beginning of high growth periods in time. Yeah. So we saw it in the 90s with with tech. Certainly, we're seeing it in cannabis now. But it is, I think I won't say it's settling, but there is more rational sort of thought going behind it.
Marc: Is sort of an analogy I find quite interesting. If you're familiar, if you're familiar with the Big Bang at the moment, the universe was created the first 300000 years. It was an opaque soup of particles. And then after about 300000 years, these particles started coalescing and starting to form the kernels of what became the universe. But what it also meant was that light and information started traveling and started to become visible. And I think that's where we're now in the cannabis industry. We have that opaque era. The first few years where you kind of knew what you had to do, but still you were lacking a lot of information that would enable you to make accurate decisions. And we're getting there now. So there's still a lot of work to be done. There's a lot of opportunity that that creates. But we're seeing where we need to go to. And like I say, you know, it's being a company that is able to make promises. To its customers that it is able to keep. Yeah, and that's basically definition of brand.
Chris: Yeah. And I love the analogy and all of you listening. What other cannabis industry podcast are you going to get to hear a discussion about the origins of the universe? Like, if you haven't subscribed, you really should. I do like it when you're looking at sort of the the US market, which states right now, do you guys find most exciting? Like what's most interesting?
Marc: We're very highly focused on moving into sort of the eastern northeastern port, I would say, the eastern part of the US. That doesn't mean we're forgetting the rest of the country. So like I said, we've got this very sophisticated model that tells us what markets we should be in. We're in California and California is a very difficult market to operate profitably, but I think we have the model that will work there. Beyond that, we're obviously in Nevada where we're doing really well. We've got a partner in Massachusetts with whom we're working on their facility. That's, you know, that model where we get 10 percent of their canopy and we're doing a number of branding initiatives to get a company called Bell Florida, the founders of Rapper Weeds known through, you know, one of them being the discoverer of Machine Gun Kelly and having that connection to the culture. But sorry, back to your question.
Chris: No, it's fine.
Marc: Like New York, Connecticut, New Jersey, Florida, Pennsylvania, Massachusetts, obviously Illinois, Michigan. And there's a number of states, you know, further west as well that we will be moving into kind of one step at a time, but we're pretty fast and our move.
Chris: Yeah. No, that's great. And clearly with all of the changes in the Northeast, it makes sense that would be the region to go into.
Marc: And it's not just the size of obviously the size of the market is a huge thing. I, you know, New York alone is huge. You know, we had Florida, Illinois, etcetera. You've got a huge market that is many times the Canadian markets. But beyond that, it's a very interesting area to play because if you look at the development of the legacy markets, which is very strong on the West Coast and it's the West Coast that is feeding the sort of the legacy market in the eastern states, so there's no Humboldt County right in New York. So we're going to see sort of a migration of techniques, technologies and brands from the West Coast. And that's one of the reasons why we're in California. Because if you have a brand that works well in California, the chances are it's going to be recognized in other states, but it's going to be different here. Like New York we're kind of waiting on what the regulations are going to look like exactly. I think there's some unnecessary restrictions for now, but that's being worked on, but there's lots of different entry points and it's kind of an ability to develop the industry in you had to not do things that didn't quite work out on the West Coast, but still take the positive from there I used on the East Coast
Chris: and yeah, well. And so I spent 20 plus years in the advertising agency world prior to my shift into cannabis and when we were working on how do you introduce a large scale, say, fashion brand, right? You knew you had to own the coasts and then you move in? Yeah, from there, because that's you don't have to like it, folks. But that's the way brands in the United States work. If you own the coasts and you move in culturally, it's predictable. Part of why I got out of it was because it became so predictable that it wasn't fun anymore. But in cannabis, now it is so unique. We're starting to see some of those attributes of other industries where you can take some of those learnings and adapt it to roll them out. But there's still so many little nuances that it makes sense.
Marc: And that's what I love is like, and I've seen it happen. Like cannabis. The way the industry or even our industry, let's say the way the consumers are very diverse group, but there's this group called the culture, which is a generic term for a very diverse group of people, but it's a group of people who by and large are a bit more resistant to the traditional CPG approach and regulations won't allow sort of the traditional CPG approach, either. And so you have to be creative and different and kind of connect with the culture to make that first foray successfully into the industry. And to me, it's become how cannabis is not a singular item in someone's life. It is part of a lifestyle that includes music, art, foods. Name it. So if you are able to interact with that continuum of lifestyle elements, then you will do well. And now you can establish a brand that will be recognized by the culture and the culture right now is kind of seen. And I don't like saying the culture because it's such a generic term for such a diverse group of people, but we'll do it anyway. Otherwise, we still sitting and talking tomorrow.
Chris: Oh yeah, and we we end up talking about market segmentation and demographics and psychographics and the whole thing, and we will do that in the future. But what I just heard was, if you're going to come in and you're going to build a brand, you're going to build a company. You have to be unique and you have to be Audacious. So you are appropriately named. And Marc, I want to thank you so much for joining us today.
Marc: Thanks for having me it was fun.
Chris: Yeah, love this style. Just able to have a conversation. And I wish you guys all the luck.
Marc: Thank you so much.
Chris: We'll have you back on in six seven months. See how it's going. Thanks, everybody for listening in to this episode of the International Cannabis Conversation. Don't forget to hit that subscribe button at the bottom, and we look forward to talking to you next time.