Marijuana Business Magazine July 2018

PICKING THE RIGHT PARTNER well as packaging material, Natural Extractions ships the materials from its larger operations on more of an as- needed basis. “When our licensees place an order, we send them a kit that comes to them with all the basic ingredients except for the THC and water. We also send our packaging that works well with our manufacturing design, so they are able to quickly get the products on the shelves (of retailers),” Devlin said. Natural Extractions’ licensees are not restricted to making only Zoots products. Sira Naturals, for example, manufactures Zoots edibles as well as its own line of products, including Honey Stix in jars and Microdose and Macrodose Caramels. “This is one of the advantages of licensing: Our licensees learn from our expertise and then they’re able to do a white-label brand with their own name on it,” Devlin said. “We think that the most successful manufacturers out there will be manufacturing other brands.” Spreading the Word Within the cannabis industry, an edibles brand is only as good as the number of dispensaries that want to carry the products and the number of customers who want to consume them. That’s why Natural Extractions dedicates 5%-7% percent of gross revenue to mar- keting Zoots each year, Devlin said. “That’s our part,” he said. “We expect our licensees to contribute a significant amount to marketing as well.” Licensees spend thousands of dol- lars to market Zoots. Marketing regu- lations vary from state to state. But for the most part, traditional forms of advertising are limited. Licensees assist in marketing the Zoots brand by keeping budtenders educated about the benefits of the products, asking retailers for highly visible shelf space and using in-store advertising on video monitors, posters and counter- top flyers. From the company’s early days, Zoots advertisements in print publications suggested the brand was “the Johnny Walker of pot” and included “normal- looking people like you’d see in a stock photo,” Devlin told Forbes in 2015. The hope was that featuring ordinary (and sometimes older) people using cannabis would suggest quality mari- juana could be used in daily life. More recent Zoots posts on Face- book, Instagram and Twitter, however, appear directed at a younger, more diverse audience. A Facebook video, for example, features ZootDrops con- centrates being used to make infused cocktails. An Instagram post shows a woman holding a bottle of ZootBlast cannabis-infused energy shots on a winter mountain trek. Natural Extractions keeps details close to the vest about where it spends its marketing dollars. But Devlin said the budget is intended to reach its three customer types: dispensary managers, marijuana cus- tomers and budtenders. “You can do non-infused samplings and product displays. Most stores will have ‘meet the vendor’ days, where people come and set up. That’s all a part of it. But it has to be a total pack- age, and you can’t rely on just one thing,” he said. ◆ N atural Extractionswants to license its legacy cannabis brand Zoots to edibles manufac- turers that are positioned to capitalize on the day Uncle Sam legalizes marijuana – assuming, of course, that ever happens. The Seattle-based company aims to enter states where recreational marijuana is legal, so the 31 SKUs in its portfolio – including the popular ZootBites Caramel Espresso brownies and the original Kooki Dough Blondies – can be deliv- ered to retailers. Beyond that, Natural Extrac- tions wants to set up in heavily populated areas such as NewEngland and spread out across the country in case interstate commerce becomes a possibility. To date, its licensing deals include sales territories that encompass the entire state where the partner manufacturers are operating. “It’s really important to choose the right licensing partner,” said Patrick Devlin, co-founder and president of Natural Extractions. “Youwant someone who really understands food manufacturing, so they really don’t underesti- mate what they are getting into.” It’s ideal to find a company that has someone on staff with experience in the food industry, but it’s not essential to form a partnership, Devlin said. Natural Extractions helps its licensees hire staffers, and it shares sample job descriptions to find the right candidates. “We develop a manufacturing plant that operates at FDA (Food and Drug Administration) standards, so that when the federal government hopefully eliminates national prohibition, the edible manufacturing will be regulated by the FDA, and we’ll be ready,” he said. – Adrian D. Garcia Patrick Devlin is co- founder and president of Seattle-based Natural Extractions, the company behind the Zoots brand of cannabis-infused edibles.  Photo courtesy of Natural Extractions 102 • Marijuana Business Magazine • July 2018