Marijuana Business Magazine November December 2018

the parent, but the stars of the show are the brands.” Colorado is where the company's product research and development happen, as well as where standards of procedure and other important com- pany guidelines are drafted. For production, Organa Brands partners with marijuana business license holders in states where it wants to do business. When deciding on a partner, Driessen said, Organa Brands seeks “money, morals and marijuana.” In other words: Does the potential partner have enough capital to scale, the morals to be compliant and enough raw cannabis for the quantity of products the company wants to produce? To help new local partners learn the company's processes, the firm deploys a “travel team” from its Colorado headquarters that comes in from sales, marketing, distribution, logis- tics, production, research and product development. “We are able to deploy rapidly because we don’t have to hire a chem- ist and other key personnel in every market,” Driessen said. “We have them in Colorado, and their expertise is what gets licensed out.” Know Your Markets Organa Brands decides which markets to pursue after extensive research.The business evaluates the number of poten- tial patients and consumers, the competi- tion that might already be there, what sells and what doesn’t, as well as market needs that aren’t being satisfied. Organa Brands also sends executives and other team members into the market to explore real estate possibilities and interview potential executives and other staff. “Being data driven, we always do heavy market analyses before we decide to go into a market to understand what’s the ROI, what products can we bring to market, what’s the demographic, what are the regs,” Driessen said. “You need to know what’s unique about each state. Different brands resonate to different degrees by state,” Driessen said. For example, Organa Brands has found that its higher-end Craft Reserve Distillate cartridges and Reserve Pure Oil Cartridges – sold under the OpenVape brand – are popu- lar in markets such as Northern Cali- fornia and Oregon. However, another product, Ish, a big-batch, flavored distillate that tastes like vanilla cake or blueberry, doesn't sell well in the Pacific Northwest, but it does well in Colorado and other Southwestern states. While Organa Brands executives would ideally like the company’s prod- ucts to be in all legal cannabis markets, they fear that doing this would spread the company too thin. Consequently, the company has chosen, for now, to stay out of small markets such as Alaska, Hawaii and New Hampshire. “You have to be cognizant of the time, talent and treasure you’re going to put in versus the opportunity and expected return,” Driessen said. Consider Alaska. While it has an adult-use program, transporting prod- uct across the vast state is expensive. “We really shine when we can sell to everybody on an open, wholesale scale,” Driessen said. “In Alaska, you can, but you might need to take a bush plane to some places; that makes the cost model nonsensical to us.” Organa Brands also stayed out of Illinois and New York because of what it considered excessive regulations, high costs and too few patients. “One day, both those places will be amazing markets. But the way they are set up right now, you are set up to lose,” Driessen said. ◆ Chris Driessen serves as president of Organa Brands. Photo courtesy of Organa Brands You need to know what’s unique about each state. Different brands resonate to different degrees by state. 74 • Marijuana Business Magazine • November/December 2018