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Cannabis Legalization is Coming…..

Whether legislation has it on the ballot, or has it tabled until next session, one thing is clear – legalization is coming. As rest of the nation look to legalize recreational cannabis use, what product and revenue trends can the marijuana businesses in these states expect? By analyzing data from the states like Colorado, California and Oregon that have now been legalized for up to five years, businesses can now forecast these trends and position themselves to capitalize on their emerging markets.

BDS Analytics examined over a billion retail sales transactions from the cannabis industry in 2018 to help forecast what 2019 has in store.1 At a glance, it looks like we can expect evolving consumer preferences, falling prices and the building of brands. You can read the findings from BDS Analytics’ entire study here: https://bdsanalytics.com/top-10-trends-in-cannabis-for-2019/

Consumer Driven Trends

As cannabis consumption has expanded to the broader public, users are making their preferences known. In 2014 when Colorado became the first state to legalize recreational marijuana, flower made up 67% of all cannabis product sales.2 Five years later and Colorado’s cannabis industry has grown from $683,523,739 to $1,545,691,080 annually – an increase of 79%!3 But even as the industry continues to grow, flower sales have dropped by more than 20% giving way to edibles and concentrates.2 Perhaps this shift is due to changing consumer demographics. Smoking has seen a decline in social acceptability in years past and is virtually condemned by health practitioners. Yet 71% of cannabis consumers use for social purposes and 67% of Baby Boomers use for their health.1 Also, more and more consumers are preferring more consistent and lower-dose product strengths which is much easier to achieve in edible form. Whatever the reasons, it is clear consumers are driving the evolution of cannabis products. While flower will remain a commodity to derive such products, retail will need to make room for more edible, finished products. Even cannabis beverage sales are expected to increase from $30M in 2018 to $374M by 2020.1

Consumer Driven Brands

When recreational cannabis first came on the scene it was virtually all unbranded. As stringent product standards and regulations have taken hold, the market has shifted almost entirely to branded products with 96% of the edibles market in Colorado being branded.1 Competition and increased grow outputs have driven the wholesale price of flower down, a cost savings that has been passed along to the consumer.2 As flower is the primary ingredient in any cannabis product, its price decline has resulted in lower prices in edibles and concentrates too. Though due to added production costs, R&D, etc., other cannabis products have not seen as sharp of a price decline as flower alone. As the industry grows, brands will have the ability to control pricing, however it will be the consumer that will solidify their market presence. Consumers will look to brands that build a positive, more affluent stigma, a wide array of consumption methods and consistent dose packaging.

Where does this leave a new retail business seeking entry into the market? Business will want to look to brands that are delivering high quality products, innovative consumption methods and can create a social impact. Location will also be important as 67% of consumers place convenience at the top of their preferences.1 Businesses that consider the impact of delivery services and online ordering as legislation looks to regulate eCommerce markets will also be positioned to immediately increase revenue while others build out online infrastructure. In the end, the consumer is king and getting behind a strong brand that they are following will lead cannabis businesses to the promised land.

By: Tim Montague – Co-Chief Operations Officer of C E Hutton

Sources:

  1. BDS Analytics, California, Colorado, Concentrates, Demographic and Psychographic Cannabis Research, Edibles, GreenEdge, Knowledge Center – Top 10 Trends in Cannabis for 2019, January 30, 2019 https://bdsanalytics.com/top-10-trends-in-cannabis-for-2019/
  2. USA Today, Trevor Hughes – Pot smokers are setting aside their joints in favor of edibles, pills and extracts, July 24, 2018 https://www.usatoday.com/story/news/2018/07/24/marijuana-retailers-say-consumers-seeking-alternatives-smoking-pot/823668002/
  3. Colorado Department of Revenue, Office of Research and Analysis – State of Colorado Marijuana Sales January 2014 to Date, March 2019 https://www.colorado.gov/pacific/sites/default/files/0119_MJSalesCalendarReport_PUBLISH.pdf

Diversity Management: No Longer About the Bottom Line

Diversity management is paramount to the growth of companies in the cannabis and hemp industries. Times have changed, no longer can companies hide behind their lack of cultural acumen. Organizations that seek market relevancy must embrace diversity in how they think, behave and innovate.

Diversity is no longer about the bottom-line! It’s about how an organization treats its clients and employees from inception. Understandings and viewpoints regarding diversity and new best practices that allows diversity to play a more strategic role in cultivating sustainable business growth starts with authenticity.

It’s no mystery that companies in the cannabis and hemp industries are known to pay lip service when it comes to diversity and they really don’t embrace or live by it. It’s not only evident in their conversation, but it’s evident in the culture of their company. Diversity is more than employee demographics and supporting a few non-profit organizations. Companies cannot continue to buy diversity, and the ones who do, stand a BIG chance of damaging their brand.

Our global society has changed, and the new generation carefully evaluates how companies and organizations adjust to this change. When companies are not authentic; clients and employees start to question their leadership.

Here at C. E. Hutton, diversity is the foundation of our brand. We’re taking a long-term strategic approach to engage diversity while defining our new role in the cannabis industry.

Diversity is not about getting into multicultural markets; it’s about rethinking the way we do business. Embracing different people who believe different things and represent different cultures, generations, ideas, and ways of thinking drives innovative perspectives. This is Diversity.

Innovation is about looking at complex problems and bringing new perspectives to the table to help solve them. That’s exactly what companies and Entrepreneurs will find here at C. E. Hutton.

Our brand is synonymous with diversity and although we’re new to the cannabis industry, we’re making a name for ourselves by responding to the needs of our clients in an authentic way they respect.

– Khadijah Adams

Khadijah Adams is the Vice President and COO of C. E. Hutton, a minority-focused
business development and management company located in Denver, Colorado. Khadijah
has 20 years of business development, operational management, sales and marketing
experience. For more information about C. E. Hutton, go to: www.cehutton.com

Corporate to Cannabis: From Outside to Inside

It’s January 2, 2014, and Denver’s Amendment 64 is now in force and legalized commercial sales of marijuana has started. For many people, this presents a new and exciting way to think about investment opportunities, new employment possibilities, health benefit and treatment options; and an overall sense of excitement to re-channel their lives in a different direction.

As a Denver native, I had a front row seat watching my city’s landscape change dramatically and quickly with a rising population of people moving to the city, new neighborhoods being re-created, home prices blowing up and dispensaries becoming as prevalent as 7-Eleven stores.

Who wouldn’t want to participate in the fastest growing industry in Colorado and the United States as a whole?

Count me in!

However, several critical questions weighed heavy on me and I’m sure they resonate with other minorities and people of color universally when trying to venture into a new business arena.

Who can I connect with to get started?
Who has expertise?
Who can I trust?
Who has capital?
Who has ACCESS??

“These questions absolutely describe my mind-set, thinking about my start in the industry as an investor and possible entrepreneur.”

I had been grinding in Corporate America for nearly 30 years, traveled to places I hadn’t considered visiting, much less doing business there and had decades of operational and management experience. I’ve met great people and had mostly fond memories. I was struggling with change, but as the group Soul II Soul sang, “Keep on Moving”, I knew my skills and talents were transferable and it was time to move.

Two years passed, and I was still looking for that access.

In 2016 as fate would have it, in scanning my email I get a message from Facebook.

No, I’m not a big Facebook user, but for some reason that specific day in November, I received the “friends you may know” message in my email and the name Khadijah Adams pops up, “MIPR Holdings, LLC,” a professional consulting firm focused on marijuana investments in new business ventures and facilitating capital connections. The professional industry access I was looking for!

I’m thankful every day for that little message in my inbox and for the person that would eventually become my business partner.

Khadijah already had tenure in the industry, a wealth of contacts and most importantly, an entrepreneur in her own right for many years. She knew the upsides and downsides and what the possibilities are in new legal industry.

After working on a few investments with Khadijah, there was always this ongoing conversation about the lack of diversity in the industry, not just in Colorado, but nationwide in legalized states.

We both knew a paradigm shift was happening in the industry and the movement from the “underground industry” had quickly become full-fledged professional big business.

“There was this continuing conversation about getting more professional minorities in the industry through business development and management, providing communities with entrepreneurship possibilities, being a voice in the social justice struggle, and our number one mission; leaving something behind, a legacy.”

BOOM!

This backdrop was the fuel, energy, emotion and the genesis of C.E. Hutton, LLC., Corporate to Cannabis.

It’s been quite a ride since June of 2017 when the company was founded to when we officially launched February 1, 2018. There were some tough lessons learned and I continue to learn and continue to listen as smart leaders do.

“The lessons and skills I’ve learned over the years is invaluable and extremely excited to see where the C.E. Hutton company is going. We have built a proudly diverse and dynamic team of professionals who are those connectors internal to the marijuana industry and external to the wider business arena. I am beyond GRATEFUL for being blessed with the support that others have given me in my life and now I’m paying it forward. I’m very thankful.”

“Faith, Integrity and Trust (F.I.T.) for the legacy we leave for others.” – C. E. Hutton

Charles E. Hutton is the President and CEO of C. E. Hutton, a minority-focused business development and management company located in Denver, Colorado. C. E. Hutton has 30 years of Operational Management experience with Fortune 50 & 500 companies.

For more information about C. E. Hutton, go to: www.cehutton.com

Marijuana Stigma Not Keeping This Black Man Out of the Billion Dollar Industry

Now that Marijuana is the fastest growing industry in America and generates billions of dollars annually, it is believed that only 19% of business ownership is represented by Minorities according to the Marijuana Business Daily and of these companies only 1% generate six-figure annual revenue.

What is the story behind this?

One critical element is how the criminal justice system has and continues to treat people of color. Methodical racial prejudice drove cannabis arrests in communities of color and the American Civil Liberties Union and Human Rights Watch reports that in 39 states that provided sufficient data, Black people are four times more likely to be arrested for cannabis possession than white people, although they consume cannabis at similar rates.

Also, Black and Latino men are still being subjected to mass incarceration in the continuing “War on Drugs.”

Additionally, Black and Latino men are by far subjected to more criticism when it comes to the stigma of marijuana both politically and spiritually. Because of the disproportionate amount of arrests, many find the stigma hard to ignore and even harder to overcome.

One man refuses to allow the social challenges and stigma of marijuana to keep him out of this billion-dollar industry. To prove it, he transitioned from an Executive position in corporate America into the Marijuana industry.

C. E. Hutton took his first steps out of the proverbial “canna-closet” in 2016 when he made his first investment in a cannabis-related tour company. His vision to help level the playing field for minorities in the cannabis space came when he completed his first corporate acquisition.

After investing in The GreenStreet Academy, a minority-owned online educational platform focused on teaching the basics and fundamentals of investing in the marijuana industry, C. E. decided to make his transition into the cannabis industry official by launching C. E. Hutton, LLC (“The Company”) in June 2017.

The Company is a minority-focused business development and management company that offers a unique suite of business and management services to Entrepreneurs and small to mid-size companies seeking to enter or expand their business in the cannabis and hemp industries.

“It is no secret that disadvantages exist for people of color who are trying to realize their business dreams and aspirations and the existing stigma and challenges to realize them can appear to be without end. The best way to attack those challenges is to build allies, business and community networks and seek supporters that provide access and insight.

The C.E.Hutton firm will be the one of those supporters that is focused on creating positivity in the marijuana industry for minority entrepreneurs and transforming those dreams and aspirations into actual business ownership empowerment.”

To learn more about C. E. Hutton, please visit www.cehutton.com

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