April 20th might be just a date on the calendar in most areas of the world, but in Colorado the date is known as 420, the day people celebrate the consumption of marijuana. This year, the University of Denver hosted a Marijuana Summit on the day to showcase the university’s professors who are researching the industry. The event brought together experts in law, biology, psychology and business.
Five Daniels College of Business professors shared their expertise in the areas of real estate, finance, law, management and marketing through a panel called “50 Shades of Green.” The professors emphasized that the industry is changing rapidly and rapidly affecting our state as well.
Finance Professor Jack Strauss said Colorado’s tax revenue has had a steady increase, bringing in around $135 million in marijuana licenses in 2015. In addition, a portion of the sales tax collected during marijuana purchases gave around $29 million to schools that same year.
Associate Professor of Real Estate Ron Throupe said economic impact and cultural shift in Colorado has also created a new boom in real estate. While the real estate market has started to slow down recently, it is still one of the top markets in the country.
You’d think with the success of these companies, they’d be in fierce competition with each other. But, Management Assistant Professor Paul Seaborn explained how many dispensaries decide to work together to promote the industry in his presentation about counterintuitive business strategies that have been adopted by the industry.
Unlike traditional successful businesses, those who work with marijuana are also making different choices in terms of buying versus renting and the amount of automation in their production processes. Legislation behind marijuana is still constantly changing, so investments in property or machinery could be rendered useless a couple of months down the road.
“Companies in any aspect of the industry need to be careful as they expand because of different legislation from state to state, or even city to city,” Seaborn said.
Other differences include the industry’s relationship with banking, intellectual property, its attitude toward regulation, and the benefits of selling retail versus wholesale. Seaborn, who will offer Daniels’ first undergraduate course on marijuana next year, discussed the likelihood that the future of the marijuana industry will parallel that of breweries in America. Factors that will impact this future include the industry identity, consumer taste and demand, regulation and resource partitioning.
Assistant Professor Andrew Schnackenberg discussed the characteristics of different legalization campaigns which were successful. He compared campaigns in five states which were successful in legalizing marijuana to five states which were unsuccessful. He noted that there were four topics that all campaigns touched on, but that were stressed at different levels: the profession, state, community and market.
Schnackenberg found that successful campaigns were far more likely to openly discuss community issues such as the potential for children to gain access to marijuana and the distance of marijuana dispensaries to public schools. “The public needed to be comfortable with the issue before they understood how to vote,” he said.
Assistant Professor Heather Kennedy finished off the panel discussing the marketing tactics behind marijuana’s success. Kennedy compared to the growing industry to her experience starting the natural foods movement during her time at Whole Foods Market.
“The success of a new product, especially one that is unfamiliar to most potential customers, relies on education,” Kennedy said. “First, retailers need to be educated on their product and the industry so they can accurately explain it to the end user.”
As an intoxicant, it needs to be explained to customers how to safely consume and what products will reach their goals, similar to alcohol. Successful packaging for marijuana needs to clearly, yet cleverly explain what the product does. Her example of the “Rookie Cookie” makes it clear that it is for someone who is new to the world of marijuana, implying that the product is made for “rookies” or those who have not smoked much or at all.
Panelists acknowledged the continued uncertainty facing the industry and its effect on farms, dispensaries and other marijuana industry trades. They were all encouraged by the progress the industry has made and Colorado’s position as a national leader as legalization spreads to other states.