While alcohol plays an important role in American culture, cannabis has been largely excluded from mainstream commercial markets due to federal illegalities and widespread prejudice. However, a major cultural shift is underway with the growing number of legal cannabis markets in the states and impending federal legalization. Recent projections suggest that the global cannabis industry will surpass $61 billion by 2026.
The modern consumer is also more health conscious, and with the increased availability of legal cannabis, many are replacing alcoholic beverages with the plant. Additionally, there have been reports of a decrease in alcohol consumption since the 1980s, and many now believe that cannabis is safer than alcohol. This belief is especially prevalent among younger generations, a factor that could have an incredible impact on the alcohol industry.
These trends are not lost on Jason Vegotsky, CEO of Petalfast, a marketplace platform for the cannabis industry, who sees a window of opportunity for alcohol companies to enter the cannabis market. With a background in the wine, spirits and food industries, which includes founding and selling the Lawless Jerky beef jerky company, Vegotsky took the business model from the food space and applied the principles for marketing wines and spirits. Petalfast is disrupting the California cannabis market by becoming the first to implement a traditional three-tier distribution model similar to alcohol.
“Using this distribution model, where brands and products are sold by producers to a distributor or wholesaler and then to a retailer, we offer established alcohol companies the opportunity to employ familiar strategies and easier to launch and grow brands within the cannabis industry,” Vegotsky said.
Vegotsky thinks alcohol companies can have a particularly big impact on the rapidly growing cannabis-infused beverage category, which is expected to reach $2 billion by 2026. ‘alcohol to grow their brands,’ he says, citing the industry’s expertise in navigating state and federal regulations and its high-level branding and marketing playbooks.
Unique barriers for cannabis brands include various advertising bans, which is why Petalfast focuses on retail, getting products to stores, and places where a consumer can learn and connect with a brand. . In California, the company deploys 18 salespeople and 75 brand ambassadors to dispensaries to conduct demonstrations and train staff.
“The high level of brand loyalty in wines and spirits does not exist in the cannabis industry today,” Vegotsky explained. “Consumers are still figuring out what’s out there and what their preferences are.”
According to Vegotsky, connecting with budtenders, the dispensary professionals serving clients, is an essential part of Petalfast’s program. “Budtenders play a pivotal role in relaying a brand’s story and recommending products, so authentic relationships where they can truly understand and appreciate brand messages are crucial.”
The cannabis industry is changing rapidly nationwide, which is why Vegotsky says Petalfast is expanding into Michigan and Massachusetts — to help cannabis brands achieve rapid growth in competitive East Coast markets. “Every supplier and distributor is looking for their niche, and capital alone won’t win this battle,” he says.
“Building a brand in this space requires a deep understanding of the intricacies of the consumer and the overall culture, and that takes time. This is why it is so important to get started in this multi-billion dollar industry now.