I just ploughed some of last year’s savings into “Pot Stocks.”
No, I won’t go into detail of where I put the money. This is a creativity/marketing blog, not a finance advisory. (But if you send me an email I’ll tell you).
So far so good. My picks just reported decent earnings and saw roughly an 8% gain in less than 2 weeks. There’s the changing attitude to consider too.
Marijuana is now fully legal up here in Canada, and a number of U.S. States are joining in. Pot Stocks are riding high as total legalisation sallies forth. But it’s difficult to sort the serious marijuana businesses from the poseurs.
You have properly managed companies – building relationships in different industries, increasing their yield-per-square-foot, and even starting to turn a profit. And it seems there are others too, all style and no substance, who’ve thrown their sail into the wind hoping to cash in quick.
When the dust settles, who’ll be left standing?
It reminds me of something the late Thomas Watson Sr. said:
“Nothing happens in business until a sale is made.” – Thomas Watson Sr., former CEO of IBM
Surely, the most reliable measure you can follow in marijuana is a company’s sales. After all, if my cannabis company can produce and sell a gram of marijuana for less than your cannabis company, then I am better-placed to survive.
In the excellent Energy and Resources Digest, strategist Matthew Carr uses Price/Sales ratios as one of the key indicators for which marijuana companies are good value. If you’re interested in marijuana investing, I suggest getting on their email list quick.
But even if you don’t, there’s a marketing lesson too.
Sales are so crucial because they can be reinvested into advertising. Previous customers are contacted regularly for more orders. And because you’re selling more, your marketing improves faster too. You’re testing all the time. It’s a snowball of success.
It’s why direct marketing offers such a fast way to separate yourself from the competition. Your company’s sales are directly tied to the advertising you’re putting out. You know what’s working and what isn’t. Meanwhile, you’re building a list of customers who are 3-8X more likely to buy again.
I haven’t studied the direct marketing of cannabis companies (I’ll add that to my ‘to-do’ list.) However, I’m certain those who use it most effectively would be in a far stronger position as competition ramps up. Unlike fancy logos and ‘rebranding’ events, it gives you a sturdy foundation on which to build a serious business.
Another industry which springs to mind is craft beer.
I have a friend who’s a brewer at The Greene King company in Bury St Edmunds. I figured ‘Craft Beer’ was all the rage, and those who got in quick must be making a fortune. Not so. As he told me there are some 2000 new ‘craft breweries’ sharing around 2% of the market.
It’s a bloodbath.
Most of those breweries – same as the marijuana companies – will surely fold.
But again, making sales, building a list of customers, and contacting them frequently could be a secret weapon for those who make it to the other side…and thrive.
If you already have a list of customers, maybe I can help you sell to them again. At the very least, you should fill out the FREE creative brief template available here.
Because this helps you look at your business as a customer would. It’s the first step to getting inside their brain and coaxing them to buy.