Even in cannabis circles, BellRock Brands isn’t a household name, but the company has been snapping up some of the most venerable brands in the space including Mary’s Medicinals, Défoncé and Dixie, where Bellrock CEO Chuck Smith previously ran the show. In a new feature, the WeedWeek CEO questionnaire, Smith discusses marketing, strategy, equity and why Bellrock supports the STATES Act.
This interview has been lightly edited for length and content.
-What do you see as your advantages relative to your primary competitors?
BellRock has one of the largest branded product portfolios in the industry. With 11 brands and over 200 SKUs, we can reach nearly every key consumer group. Our portfolio of brands is based on over 10 years of history, innovation and science, and we’ve built an extensive base of intellectual property and institutional knowledge. This enables BellRock to enter virtually any market with the capabilities and expertise to win.
We are also purposely built to solely focus on brand development and the consumer experience.
-How does your strategy/company differ from your primary competitors? Why do you believe those differences are advantageous?
First, we are not a traditional MSO in the sense that we are not vertically integrated. We do not have challenges inherent in cultivation, nor do we limit ourselves to our own retail outlets. Our focus is on building brands, and we embrace traditional CPG principles that we believe will be the future of the industry.
Second, most competitors do not have the breadth or depth of experience that we do in the branded, infused manufactured products space. This enables BellRock to quickly react and adapt to the constant changes that occur on a state by state basis.
Third, where allowed, this expertise allows us to successfully own and control our manufacturing, sales and distribution in-house as opposed to relying on third party license holders. The only way to build a national brand or house of brands is to consistently manufacture and distribute brands and products that customers love and trust.
Bellrock’s target audience
What demographics of consumer are you most interested in? How are you attempting to reach them?
BellRock’s portfolio is broad, satisfying the needs of a diverse patient and consumer base. We have products that appeal to a new-to-cannabis consumer, as well as a more experienced consumer – and everything in between. Besides continued legalization, the canna-curious will be the source of exponential growth for our industry and as such, understanding them, their needs and wants and their barriers to entry are very important. Building product offerings and brands that speak to them is a primary focus.
The only areas that we do not focus on today are dried flower and concentrates. Our sales, marketing and communications teams are focused on developing campaigns and initiatives that raise awareness, attract and educate consumers, and develop brand loyalty.
– Do you support state policies which cap the number of licenses? Why or why not? How does your position benefit you? The industry? Consumers?
In general, capping licenses allow for a controlled market in the initial stages but ultimately limits consumer choice. When we enter a controlled state, in partnership with a license holder, it allows us to “plant our brand flag” in anticipation of the state opening up.
– Do you support mandatory or optional vertical integration for state markets? Why or why not? How does your position benefit you? The industry? Consumers?
Since BellRock does not cultivate or own retail outlets we do not support mandatory vertical integration. As a wholesale manufacturer of products our preferred approach is to develop supply chain relationships with quality oil or biomass suppliers and sell to as many retail dispensaries as possible, making our quality products available to the broadest consumer base possible.
Joining the USCC
– Why did you join the USCC? What do you believe it can achieve that existing groups can’t?
Dixie Brands, now BellRock, was a founding Board member of Cannabis Trade Federation (CTF). As the industry has continued to grow and evolve, a coalition of responsible business leaders and organizations under the umbrella of USCC will help develop the proper framework for federal legalization. Industry bodies can champion self-regulation, industry standards and corporate social responsibility – offering increased trust and confidence from consumers, legislators and trade.
-USCC has called for “common sense” regulation of the industry but has not gone into specifics. What does “common sense” regulation mean to you?
Common sense regulation means that we are making smart choices and doing what is best for the overall good of the industry.
– Some observers believe MSOs would benefit from an incremental legalization process that would, for example, give them access to the financial system (and major U.S. stock markets) immediately, but prolong federal legalization for a few years so MSOs can grow without having to compete against liquor, tobacco and other mainstream companies. Would you benefit from such a scenario? Why or why not? Do you believe your competitors would? Why or why not?
BellRock is a CPG-centric MSO. We believe in the industry having access to the financial system as well as a fair tax code, thus eliminating 280E for legal, regulated businesses. The spirit of the STATES Act is to regulate cannabis “like alcohol,” creating a federal mandate with a state-by-state legal framework. BellRock will benefit from this approach by building a national infrastructure that supports building our national brands. Our strategy will allow us to execute a comprehensive M&A and partnership strategy with those brands that are not in position to scale beyond 1 or 2 states.
Equity and marketing
-What do you consider an acceptable amount of social equity engagement, expressed as a percentage of revenue, for you and your peer companies? What do you consider your most important contribution to “equity” thus far? Why do you think relatively few MSOs have much in the way of meaningful equity achievements thus far?
It’s tough to place a definitive number on doing the right thing. Our job as responsible leaders is to build a foundation of inclusion, diversity and social responsibility. At BellRock, we have several initiatives in the works currently and are continuing to find additional ways to make a meaningful difference. For instance, we have implemented diversity education programs at BellRock, have supported groups aimed at fighting injustice, and are exploring the creation of a mentoring program to bring qualified candidates into our company to foster their creativity and talent.
– One prominent MSO CMO recently said it’s very early for cannabis marketing. What do you see as the current role of marketing for the industry?
Marketing isn’t advertising, it’s about making an emotional connection between a brand and a consumer around a product that appeals to that consumer’s need. Our positioning, storytelling and behaviors are crafted to raise awareness and drive relevancy, credibility, trust, and eventually, loyalty.
Now is exactly the right time for marketing in our industry. Material growth in cannabis will not come via increased consumption from the existing base (a la adult beverage), but rather from an influx of the canna-curious who must overcome a lack of knowledge, a lifetime of misinformation, and even category stigma. It is the role of smart marketing to build bridges for those people. We must understand their needs and their barriers and arm them with the information they need to make informed decisions and navigate a new industry and new products. All of that is wrapped up in a brand that offers both rational and emotional engagement with the consumer. That is why marketing and brands are critical in cannabis, not only in the future but right now.
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