The Business of Cannabis: Lift & Co.
By Jason Gorber
As part of our Business Talks with Canada’s top cannabis CEOs, we had the pleasure of speaking with:
CEO, Lift & Co.
What does your company do? We are a publicly traded technology company on the Toronto Venture Exchange with a technology mandate to modernize marketing in this industry.
How have you seen the industry change? Our company is focused on the biggest change: the evolution of cannabis from its current post-prohibition format, to consumer packaged goods (CPG). It’s the evolution happening with the introduction of branded products – soon, higher margin value-added products like edibles and concentrates, distributed through retail channels to a consumer that’s increasingly starting to self-educate themselves.
How would you like to see it further change, and how are you contributing to that change? We are in the business of helping that CPG evolution happen quicker. We are here to bring this ability to the industry through data and through connection to consumers, to retailers, to brands. I would like to see more product formats entering, more consumers, more distribution – that enables us to collect better data on the market and consumers and gives us better insight into how we can move this industry toward CPG.
What do you see as your biggest challenge or roadblock? The biggest challenge for us as we scale the business is the slowdown of the market. For example, data collection is our main strategic initiative. The retail slowdown of licensing is hindering that ability because now there’s less retail points to be able to collect that data from – same with the regulations allowing for things like edibles and concentrates.
Previously you had an illegal product, therefore you had no legitimate business space. On the other hand, you have regulations now which are, in some ways, inhibiting and, in some ways, carving out a niche for you to exist at all. Regulations have created the opportunity for businesses like ours to exist. Our business benefits from strict regulations on producers and retailers as it prevents them from advertising. It limits their ability to collect data, so in a sense, the strict regulations and slow-down gives us the first mover advantage. We love the regulations, the restrictions on advertising, marketing, lack of data – those are good for our business.
What do you see as the biggest misconception of this industry? One of the biggest misperceptions on the consumer side is that cannabis is primarily a dried flower product: the bud. Look out 20 years, and you will have cannabis infused in all sorts of product formats, whether it’s topicals, patches, listerine strips, edibles, vape pens, all sorts of value-added products that we haven’t even conceptualized yet. As technology advances and these products become available, cannabis will not be the way we think of cannabis today. That only comes at the end of prohibition.
Can you give an example of a product that has gone through this type of transformation? I think we see it in the disposable vaporizer pen. It looks like a cigarette almost, yet it completely changes the use case. Traditionally, you had to roll up your flower, whereas with a pen, you’re able to use it in all sorts of environments. [It’s] discreet, dose-controlled, interchangeable, more portable, easier to use. That’s opened up the market both to new types of consumers and to new use cases. It lowered the barrier to entry for dose, and it’s completely changed behaviour on cannabis.
Where do you the industry in five years? I’m sure a lot of people have told you about consolidation? That’s definitely something I anticipate.
Some people see consolidation; some people actually see fragmentation, so that’s why I’m curious where you’re at. At the ground level, I see consolidation. I think opportunities like the legalization of edibles, for example, might create a window of time where there’s fragmentation, but long-term, you’re going to move to consumer packaged goods, where a few umbrella companies own the majority of brands that consumers interact with, so I’m very bullish on that outlook.