Navigating Global Expansion: Strategies for Taking Your Cannabis CPG Company International

Introduction

Jake Litke: Welcome to Cannabis Marketing Live, where we talk about strategies for your cannabis brand or retail business. Today we have Jamie Pearson joining us, and I am actually going to read her bio, because there's too much in it for me to remember, so let me bring this up real quick. Okay, Jamie Pearson is a renowned leader in the cannabis sector, with over a decade of experience, twice recognized by High Times as one of the most influential women in cannabis. She boasts deep ties to the industry, fluent in German, Jamie has 30 years in global real estate across three continents. She's an advisory board member for Ellison Raines, Sellotex — I think I'm pronouncing that right — Lift & Co, and Alpine Group. As the founder of New Holland Group, she offers expertise in various business areas, including international development and financial turnarounds. Before this, Jamie was the president and CEO of Bhang Inc., a top cannabis edible brand, expanding its reach globally, she also serves as Bhang's vice chairman, and is a sought-after speaker in areas like IP licensing, global expansion, and leadership. That is a lot of things you've done, Jamie, lots of years to fill with stuff.

Jamie Pearson: Lots of years to fill.

Jake Litke: So, Jamie and I've spoken many times in the past, at lots of conferences, I've gotten a lot of good insights from her. Let's start with the topic, which is global expansion — I think, for our business, we work primarily with US companies, we've done some work in the UK, a little in Asia, but I'd like to joke about the US industry as operating in 35 countries all by itself, because each state is different, but you're taking things off to Europe and other places — give us just a high level, what does global expansion mean for cannabis brands specifically, for companies in the US today?

What Does Global Expansion Mean for Cannabis Brands?

Jamie Pearson: So, for companies it's different than for brands — just like it is in the US, there are a lot of similarities when you're crossing borders. What I think it basically means is, if you've got a product or a company performing well stateside, and you think that's a big opportunity over in Europe, and the Europeans or South Americans in those different countries are going to want access to my product or my brand, depending on whether you're a company or a brand, then companies and brands start looking at taking that leap, instead of expanding across a state border, they look at going into different countries.

Jake Litke: And what would be some initial things to think about, as a brand that's considering, how do you even start to think about being ready versus not ready, what are some big topics to think about, for a company that's like, "should I even consider this, given the stage I'm at?"

Jamie Pearson: Well, first, let's set a parameter here, that we're going to talk specifically about brands, knowing that if we talk about some of the larger companies in the middle of international expansion, they consider themselves brands, clearly — Curaleaf, GTI, truly — but let's just talk about taking an individual product, I think it'd be easier at a micro level. I think about some of the great brands that exist in cannabis right now, and if you were going to move them anywhere outside of the US, I think the biggest thing you have to figure out is supply chain — my recommendation is always, you start from the shelf and work backwards, because we've all seen a lot of people who can grow excellent cannabis, and then, once they have it, think, "now what do I do with it," and you really need to do that differently, starting from the sale backwards to the product — go find what customers are looking for, what are the holes in the market, what's a niche you might fill. And, when people approach me a lot about, "I want to go to Germany," the first thing I usually ask is, do you have experience, or a team that's already done cross-border expansion, whether it's crossing a state border, maybe into Canada, or from Canada to the US, because I wouldn't recommend someone make that leap on the international level, where you're contending with different currencies, languages, and cultures, before you actually have an expansion strategy dialed in and buttoned up.

Jake Litke: On that topic, inside the US, generally you need to manufacture the product inside the state's borders, the brand itself can move across state borders, and I know the rules are a little different, there's some movement of stuff across borders, but what does it look like today — can you move products physically across borders, and if so, which ones, national borders, international borders?

Moving Product Across Borders

Jamie Pearson: Oh, absolutely, there's a huge import-export market in the international world — the latest statistic, it used to be that Germany was the largest importer of cannabis, now it's Israel, Israel took the top spot, Australia took second, and Germany's third, and they're importing a lot of flower. So flower specifically then needs to go through the process the individual countries require — in Germany, for example, they do a lot of irradiation, you're not allowed to have anything foreign, any kind of microbial problem, it's zero tolerance, so you see a lot of that flower getting irradiated, and there's a lot of controversy about whether irradiated flower has the same potency and entourage effect. But, yes, there's a lot of import-export activity going on internationally — as far as finished goods, not so much, because you've got to figure out how to get that finished good through that country's process, you really do need to manufacture it on-site.

Jake Litke: Okay, so you've got the bulk product, and where's it getting imported from?

Jamie Pearson: Canada imports or exports a lot of flower, a lot of exports coming out of Australia, New Zealand, Colombia — so, imagine, where you see a legal medical market, two things have to happen, the country receiving the cannabis has to have imports allowed, and the country sending it has to have exports allowed, and those two countries have to have some sort of agreement that product moving between them is allowed. So it's not just a matter of Germany allowing imports and Colombia allowing exports, boom, you've got business — Colombia and Germany have to allow that between those two countries specifically. So what you'll see happen a lot is companies will export to Portugal, which is kind of an import hub, and then go through the process of making the products the way they're supposed to be per regulations, and then, EU country to EU country, it's quite a bit easier, the product is marked as EU and can go where it needs to go. But I want to make a distinction, because there's some confusion right now — there isn't adult-use cannabis in Europe at all, other than in the pilot programs, so the one thing people don't realize is that European cannabis, on the legal side, of course there's a robust illicit market, but it's "pharma" —

Medical Cannabis vs. "Pharma" in Europe

Jake Litke: We lost Jamie again for a moment there — oh, and you're back, you know, I think we were supposed to have commercial breaks, I'm not sure why, maybe it's Zoom — but you were saying it's all medical in Europe?

Jamie Pearson: Medical is not in Europe, or South America, like medical is here — in the US we put an air-quote on "medical," because what medical basically means is, there are some true medical states, like Florida, where you've got to go get a doctor's prescription, it's not about pot, it's about medicine, but in the majority, really including Florida, it's an air-quote medical program, where you're not running to your local CVS and picking up a finished cannabis product, you're going to a dispensary, and the prescription process is a little different than the normal prescription process. In the medical market in Europe, that's not the case — in Europe it's a straight-up pharmaceutical model, the doctor has to give you a prescription, the prescription has to be filled by a pharmacist, insurance will cover those prescriptions — that's another whole conversation — and in the medical markets in South America, it's also true.

Getting a Product Into Germany: A Case Study

Jake Litke: Okay, so backing up, let's talk about getting a finished product on the shelf in Germany, for example — let's say I have Jake's Pre-Roll brand, which isn't a real brand, but we'll say it is for now — do I try to figure out the bulk product in Canada and get it shipped to Portugal and work with the manufacturer there, or do I work with the manufacturer in Portugal and they figure out the bulk product?

Jamie Pearson: Is Jake's Pre-Roll intended to be used in the medical program, or as part of an adult-use pilot program?

Jake Litke: Well, I don't know, you're the expert, which one should I do, Germany, I want to sell Jake's Pre-Roll in Germany.

Jamie Pearson: Okay, are pre-rolls allowed? Not really, there's some gray area — the adult-use program in Germany doesn't exist yet, the rules haven't come out, but you can go to Switzerland or the Netherlands and do one of those two pilot programs if you want pre-rolls, and then you got to determine whether pre-rolls are allowed in those pilot programs. The Swiss pilot program is pretty liberal, they actually want the companies approved for their pilot program to partner with a university — the university isn't doing a double-blind medical study, what they're doing is collecting data, to determine, is it a beverage, a pre-roll, an edible, whatever it is, there's no limit — so you submit your application, and they go, "yep, we love Jake's Pre-Roll, we're going to let that into the market," and then the university starts tracking who purchases it, how many milligrams, did they have a great experience — and to get into that pilot program, you've got to partner with one of the companies already approved. Right now, the two operational ones are the Netherlands or Switzerland, and I think the German pilot program will probably start next year, based on what I'm reading, it does look like they'll probably hit their target dates — now, we all know it's cannabis, so trust but verify, I wouldn't invest a bunch of money based on dates — but if you want to get that pre-roll into a pilot program right now, I'd be looking at the Netherlands, but mostly Switzerland. If you want to get it into the medical program, it's sort of like going through the FDA process, if it's a finished product where the pharmacist pulls it off the shelf — the product has to be approved, and that process is about 18 months from start to finish, more like two years, approval very similar to getting a drug approved in the US, that's pre-packaged. But one of the workarounds a lot of people in Europe are finding, specifically in Germany, is they're going through compounding pharmacies, because the fulcrum of that program is the prescription — if the doctor prescribes a pre-roll, then pre-rolls are allowed in the medical program for you, because that's your prescription, and the doctor sends you to a compounding pharmacy that can actually make those pre-rolls for you. Right now there's a big bunch of activity, companies trying to get the capex spent for machinery in these larger compounding pharmacies. And the other thing I'll say, we have kind of a dual pharmacy model in the US, where we have the CVS/Walgreens type pharmacy, and also compounding pharmacies that make medicine on-site — in Germany they have some larger CVS-type pharmacies where the pharmacists are actually doing a lot of production in their clean rooms in the back, because they cut the middleman out, there's a lot of expense saved, it's just a different medical program over there. And the other thing to realize is, everybody has health insurance — I know it's hard for Americans to fathom — it's considered a right, and about a third of people have private health insurance, two-thirds have government health insurance, and both cover cannabis if the doctor prescribes it, and if you can get through the insurance hoops.

Compounding Pharmacies Explained

Jake Litke: Just to be clear, because "compounding pharmacies" isn't a term I'm familiar with, it sounds like a pharmacy that makes products on-site?

Jamie Pearson: Yeah, so, in the US there's lots of compounding pharmacies, every city's got them, and what that is, for medicines that have to be specifically tailored to the individual, based on your height, weight, allergies, whatever — a great example would be menopause medicine, based on measuring your particular hormonal makeup, and your doctor might prescribe a particular amount of hormone replacement therapy tailored for you, you're not going to just buy testosterone off the shelf. So compounding pharmacies do that — the other thing they do is a lot of chemotherapy, there are nuclear pharmacists who literally make that chemotherapy for you. So that's what compounding pharmacies are, and, over in Europe, it's no different.

Jake Litke: Great, thank you — and I'm just going to say, right out of the gate, I have a cursory knowledge of what's going on in South America, I've got a couple clients down there, but I don't consider myself a South American expert by any stretch.

Jamie Pearson: Okay, noted.

Choosing Where to Start

Jake Litke: All right, so if you want to get into CPG or medical — and I guess it's kind of a — but if you talk about it from a brand perspective, you've already mentioned a handful of markets in Europe, but they all have slightly different rules, different cultures — how do you go about identifying where you should start for your brand, and how do you advise people on that?

Jamie Pearson: I think the first thing that seems very natural is, you should get your butt to an international conference on the continent you want to do business in, and go start meeting people, talking to people, doing the research, get into the pharmacies, talk to the doctors if you can, but more importantly, talk to the cannabis companies at those conferences, and the people speaking, because that's how you're really going to break in and figure it out.

Jake Litke: Going through the expo hall.

Jamie Pearson: Yeah, talking to people who have booths, doing reconnaissance and networking, and pretty soon you'll figure out whether what you intended to do is viable or not.

Jake Litke: And, in your experience, how have you found the reception of American brands, or people bringing American brands to European countries, how's that gone?

How Europeans Receive American Brands

Jamie Pearson: That's a good question — what I'll say is, Europeans love American brands, that's a broad, sweeping general statement, but generally speaking, especially California brands, the Cookies, the Jungle Boys, the true stoner culture of Europe knows who the brands are in America, and really wants to see that high-quality flower come over — but they're growing some pretty great flower over in Europe as well, and there's the flip side, where the OGs of the European cannabis markets, the people who've been operating in Amsterdam, in Barcelona, they can take it or leave it, they're not necessarily Americaphiles in that regard. But a lot of the business people really value the American experience, because think about it, some operators in the space have 20, 30 years of know-how, and then you've got operators in the legal market with 10, 20 years of know-how, and there's a lot of value in avoiding avoidable mistakes, so there is some desire to have that American know-how come over. The one thing I'd caution, though, is take a beat, get to know the culture, maybe get to know a little of the language, before you come in as the hard-charging "I'm an American and I know what I'm doing," maybe figure out culturally the right way to approach how you're going to enter that market.

Jake Litke: I think we mentioned earlier that you speak German — I imagine that's incredibly helpful.

Jamie Pearson: Most definitely, most definitely — I studied at the University of Wilhelmshaven in '97, I married a German, my kids are dual citizens, I've owned real estate there, I've lived there, I've been on the social health insurance, I understand how that culture works. I'm not going to tell you I'm an expert, just like anything else — I always think about, imagine saying "I'm an expert in American culture," and then you're in New York City, and then you travel to where I live in Montana, then Texas, then New England, then California — what is actually American culture? There are some things Germans have in common, Austrians, the German-speaking countries, but there's a lot of differences too, dialects, languages, regional things — so, for example, in the US, if you were making a product geared toward New Orleans, it might be Mardi Gras themed, if you go into DC it might be government or Patriot themed, Detroit might be "Detroit Rock City" themed or something — you're going to have that same type of difference over there. So the one-size-fits-all approach doesn't work here, and it doesn't work there, unless your brand is a true brand that speaks to the people themselves, regardless of their cultural orientation.

Jake Litke: And the brands, continuing with Germany for now, their medical pharma brands are essentially — I don't imagine you'd see a Jungle Boys product on a pharmacy shelf necessarily, right?

Jamie Pearson: Right, for the medical brands on the shelf in pharmacies right now, that's not really how it works, so the brand is kind of a wide open field right now, from a branding perspective.

Consistency and Pharma-Grade Cannabinoids

Jake Litke: Absolutely.

Jamie Pearson: So, if you're going to focus on medical, which we should really just be calling pharma, and go after that insurance, government insurance money, then you really need to think about pharma, and how pharma works. About four out of every five or six medications approved worldwide have some sort of plant-based element, come from some extract of some plant, so cannabis wouldn't be unique in that regard, but what you have to have is consistency — if you're going to make the next Advil, the Advil pill has to be the same whether you take it in the US or Germany, it has to be patentable, protectable, the formulation has to be protectable, but consistent. So your API, active pharmaceutical ingredient, if that's a cannabinoid, that cannabinoid has to be grown to that level of replication and consistency expected at a pharmaceutical level, grown in a pharmaceutical-approved plant — EU-GMP is the level in the EU, and if you want to go one step higher, where you don't have to get approvals from all the different places, you can go to the Swiss pharmaceutical level, which is approved pretty much for everyone worldwide, it's the highest level of certification you can get. So those Swiss pharmaceutical companies in the cannabinoid space are really thinking about replicable API, getting patents on genetics, fingerprinting genetics.

Genetic Fingerprinting and Patents

Jamie Pearson: The other nugget I'll tell you people should be thinking about — if you've got a really amazing strain, and can partner with a European company, like Bedrocan or some of the bigger companies, and get that strain fingerprinted and protected in Europe, that's allowed right now — in America it's not, because cannabis is federally illegal, you cannot get a federal patent or trademark on anything cannabis, I know people are going to say, "yes you can," it's really difficult, and it's not just a matter of course of business in the US, it's a matter of course in Europe too, but Europe is party to a treaty, so those patents and trademarks in Europe do actually apply to the US, or 72 countries in that treaty. So one advantage would be to go get that plant and genetic fingerprinted in Europe, in anticipation of federal legalization, because then you'll automatically have it here — you'll still have to do some paperwork here, but you'll have what you need, the first commercialization date, the date of protection, subject to an American treaty — that's going to give you a big leg up on that genetic footprint.

Jake Litke: Is that something you've worked with people to help them do?

Jamie Pearson: I'm currently working with people doing that right now, and it's a big race, for sure.

Jake Litke: How long does that process take?

Jamie Pearson: Anywhere from six months to two years, depending — one of the things people also don't realize is, a lot of times the genetics aren't clean, so you really want to make sure that phenotype is clean, and there are companies that can clean that up if you've got systemic problems, so you want that really super clean phenotype before you go fingerprint it. So the process, in the beginning, is making sure what you've got is what you think it is, and you'd be surprised how many people don't have what they think they have — I got some genetics from my dad way back, like 12 years ago, and we wanted to make a brand out of it, we thought it was Jamaican Lamb's Bread, we thought it was straight from Bob Marley's farm, there was this big family lore, my uncle went to Jamaica and got these seeds, and when we had the genetic testing done, it was actually a cross of Jamaican Lamb's Bread and Granddaddy Purple — well, my dad and my uncle had been growing those two plants in the same room for probably 20 years, just cloning, cloning, cloning, and pretty soon they all morphed into each other, and we didn't know we were doing it — so, yeah, it happens a lot.

Live Q&A: EU Certification and Canadian Advantages

Jake Litke: All right, we do have a Q&A section, feel free to drop questions in — we have a question, "Jamie, can you recommend an auditor for EU certification," but before you answer, describe exactly what that is for everyone.

Jamie Pearson: They want an auditor for EU certification to come into your facility and get EU-GMP, is that what you're referring to? We'll see if we get a response to the question about the question — someone raised their hand, if you can type your message in the Q&A — oh, here, Tabitha Fritz, what advantage, if any, do Canadian companies have over US-based companies with regard to entering the European market? Oh, that's easy — Canada is federally legal, and allows export, and in the US, if you're trying to export THC-containing product, you're committing a federal crime, you can't export out of the US into Europe. Canadians can export to Europe, Australia, Israel, so Canadian companies have a huge advantage that way.

Jake Litke: Yeah, not going to jail, that's a good one, a big advantage.

Jamie Pearson: And then I'll answer the EU compliance question — what I'll tell you is, if you're going to just try to do broad EU, you literally could Google "EU compliance," and when you pull up companies operating out of the EU — I'll make a broad, sweeping general statement — but you're going to find the ones with the wherewithal to get their websites translated into English and available on an American ISP, you're going to be dealing with a good company. And the one thing I talk about all the time, anecdotally, to my friends, is that the way the European education system works, you don't really have people fall through the cracks the way they do here, because we have this one-size-fits-all linear education approach, based on the number of hours in your seat, and in the fourth grade they'll separate you, and there's three finishing school levels — in Germany, for example, it's called something different in other countries, but they're all pretty similar, there's Hauptschule, Realschule, and Gymnasium, which basically means college prep. So what they do is take kids and figure out, are they designed to be a scholar, if so, they'll send them to the college prep track, if they're not really sure, or don't struggle educationally, they'll put them in the Realschule track, but in the Hauptschule track, it's the track where there are kids who do well with their hands, mechanically inclined, want to touch things rather than read about them, based on the different intelligences we have. So what will happen is, you'll have a bus driver, buy tickets at the train station, buy a plant at the garden center, and in America it's people who end up in those jobs, but in Europe it's people who trained for those jobs — the person working at the plant center is going to tell you the Latin name of the plant, the best way to take care of it, they'll know everything about every plant they're selling, you're going to get good information there. So I'd generally say, when I'm in Europe and talking to somebody, I'm pretty much going to take it to the bank — conversely, if I'm in Lowe's or Home Depot and ask if they have a widget, and they go, "nope, we don't carry that," I'm like, I'm gonna go look for myself, because you're probably not giving me good information, and usually I go find the widget myself. That just doesn't happen over there, so, short answer, you're safe with a Google search.

Novel Food Certification

Jake Litke: Is it worth trying to get novel food certification in the EU, or is it, as some suggested, a scheme by certain pharma companies to control the market — is it possible to get cannabis into the European market as a food ingredient?

Jamie Pearson: That's a great question, Brandon — so I went through the novel food process when I worked at Bhang, I should clarify, I attempted to get our CBD chocolate through the novel foods process, this was pre-COVID. Right now there are companies with registration numbers in the novel foods program, but the program isn't a fully baked program yet — pun intended — so I would say no. I mean, there's opportunity, if you can get it done, and you're willing to spend that money, you'd have a leg up on everybody else, first-mover status, but you're not going to know when that process will be finalized, because it's not finalized yet, and right now I would tell you I wouldn't do it, and here's the main reason why — the EU is no joke when it comes to food for European citizens, they don't allow GMOs in their food, good or bad, there are some GMOs people think are wonderful, they're just flat not allowed there, they don't have the level of preservatives and things in their food that we have here — where, in America, you go to Costco and buy a two or three-week supply of food, that bread in your bread box lasts two weeks, that bread is turning moldy in two days in Europe, they just don't have the same level of stuff in their food that we have in ours. Our FDA allows just about anything, their food regulation agencies don't let just about anything through, so you've got to be smart and careful about it — make sure you've hired a consultant with success getting things through novel foods — but the short answer for me is, I wouldn't do it yet, you're barking up the wrong tree until they get a little further along in the regulations.

Navigating Vague and Contradictory Laws

Jake Litke: Let's dig in a little more on regulations and legal in general — we have our own compliance department at MediaJel, because we have to do advertising, and there's all kinds of different laws everywhere, and, as I mentioned, we're running ads now in the UK, we've had some advertisers want to do work in Thailand, which was an interesting legal — we have an in-house lawyer who researches all this at this point — but frequently what we found is, in Thailand, the laws are both vague and contradictory, one law says you can do it, another says you can't, and there's some vague classification of what category the product even falls into, where you can advertise it or not. How do you figure out the right legal people to work with, or do you have a network of legal experts in each country you work with, how do you approach that?

Jamie Pearson: I do, I have a pretty good network everywhere, and in Thailand I've got a couple people, I actually sit on the advisory board of a company that went from Sacramento to Thailand, and that's been a learning process, there's a lot of opportunity over there, for sure it's obviously a tourist market, because the price per gram of cannabis in Thailand, the locals couldn't afford it.

Jake Litke: Right, that's when I was researching, didn't seem like it was real, I was like, wait, that seems really high.

Jamie Pearson: Yeah, it's high, and the other thing that's kind of comical is, a lot of the cannabis being sold in Thailand right now actually sat in a shipping container for 14 months, it's moldy, it's dry, it's horrible, and they're charging ten dollars a gram, and tourists are paying for it — so the people selling it are making great money, and at some point that's going to dry up, pun intended. But the opportunity, going back to your marketing rules question, whenever you've got vagueness and contradiction, I say you have opportunity to exploit that — where you run into trouble goes back to that cultural question, you definitely need to have a local, and maybe get more than one opinion, and the one thing I find in those small Asian countries, and small Caribbean countries, is everybody is somehow tied to the prime minister, or "my uncle's brother's cousin is connected to the general," and you're going to get all that kind of stuff, and it's hard to really filter through what's real — I mean, it's all basically real, but what matters is, so what I do is talk to different people on the ground, who have different things to say, and try to find that common thread, and eventually the people really running the cannabis industry on the legal side, both legal and illicit, will come forward, and you'll figure out who they are, and you'll also figure out it's probably the people running the illicit side who have control of the government, and those are the people you need to get their blessing from, before you worry about the government — so, depending on what country it is, you really have to get steeped in that culture.

Jake Litke: That's helpful, but also not helpful, in the sense that there's no one rule, all the countries are different — and what you were just explaining, some of the smaller countries, Caribbean, Southeast Asia, sounds very different than what's happening in Germany, almost like polar opposites.

Jamie Pearson: That's what I think makes it fun — when I was working at Bhang, I did that on a smaller level, having to figure out what's the rule in New Mexico, what's the rule in California, what's the rule in Canada, and try to take the product we had and make it consistent across all those different rules, the packaging, we wanted it to look a little similar where we could, in some places we couldn't. So, I really put my 10,000 hours in, in that regard, and what I've figured out is, you can't really do any of it sitting on the phone or a computer, you gotta get your butt on an airplane, go to that location, talk to people, go to the conferences, go to the dispensaries, you really gotta touch it, taste it, feel it, and be in learning mode rather than knowing mode.

New Holland Group and Cross-Border Consulting

Jake Litke: Yeah, that makes sense — maybe you could spend a little time talking, I was asking pretty specific questions that occurred to me, I'm sure there's a lot I haven't even thought to ask. We didn't touch on this earlier, but you have your current business, New Holland Group, maybe you can talk a little about what you do for people, and then I'll probably have more questions.

Jamie Pearson: Yeah, love to — New Holland Group is an international consultancy I started after I left Bhang, I really intended to take a break, was thinking about getting back into real estate, which is what I did before cannabis, and then I had a couple people call me and say, "hey, now that you're not working, would you come help me do this or that," and then the phone calls kept coming — I still don't have a website, don't have a social media presence, because I haven't needed it, it's just been word of mouth, and the business has grown beyond what I anticipated. What I'm doing is, I've assembled a team of experts in different areas of operation, soup to nuts, seed to shelf — I have experts who work in cultivation and pheno-hunting, I have one on my team who's an absolute encyclopedic expert on all things New York, because that's going to be a huge market, and the New England market, very similar to the European market, dense in population, doesn't require a lot of transportation to move product — when you think about California, that giant land mass from San Diego to Sacramento or San Francisco, you've got a lot in between, and those markets are like five different countries within California, but when you're up in New York, hopping from borough to borough is a snap. I like people to understand, Germany has 85 million people in a space about the size of Oregon, so, to put that in perspective, you can move a lot of product in a very short amount of time, it makes distribution simple. So I'm helping people interested in moving across borders, taking their brands into other countries, that's part of what I do. A lot of what I'm doing is business strategy, helping C-suites think about what to do first, recognizing what's their low-hanging fruit, because a lot of times you can't see the forest for the trees within your own organization, so I do a lot of that strategic work with companies. But what I've done a lot of, primarily, is — it seems like everybody's fundraising, and I do a lot of that, I'd say cultural translation, where they're trying to speak to investors in the US, in Germany, in the UK, and you really need — there's some things you've got to have across investor culture, that I find a lot of companies just don't understand about raising money — so I'm doing a lot of capital-raising advising, which I actually find really fun, I'm helping people with their decks.

Fundraising Advice: Speak Like the Investor

Jamie Pearson: I'll tell the audience the one big takeaway, from working the last year with a lot of companies raising money — the mistake they make is, they'll have a deck that says, "this is who we are, this is what we're doing, this is our product, we need five million dollars because we're going to buy machines, or do this or that" — and, as an investor, that's you saying everything about who you are, what you want, and what you need. What I care about as an investor is, I'm going to give you money, and how am I going to get it back — so I really want people to shift the paradigm, and speak as though they were the investor listening to the material, because the investor cares more about what's in it for them than what's in it for you, and there's a place where those two things intersect, and that's where the magic happens. So if you've identified a problem in a market, a niche, or a hole, and you're solving it, and your solution is going to make you three dollars a widget, and you have the capacity to move eight million widgets a month, that's a 24 million dollar proposal, and if it only costs you 500 grand to make that 8 million, investors understand math — but a lot of times, that company wouldn't even talk about the widget, they wouldn't talk about that, because it's not for them, that's not what's exciting to them, you got to talk about what's exciting to the investor. I have yet to receive a deck that does that well, where I'm like, "oh, you don't need me, because you're telling the investor everything they need to know" — you got to tell the investor what's in it for them, that's my tidbit I'll give the audience for free.

Jake Litke: There you go.

Germany's Cannabis Social Clubs

Jake Litke: So, it sounds like you're dealing with companies at all stages, from "all I have is an idea or a strain and a deck that needs work," what are some of the organizations you're working with that are — or are you working with companies at a larger scale, trying to solve different sections than just fundraising?

Jamie Pearson: Yeah, I have some very large clients, I've got a couple large investment banks I work for, trying to find that next Curaleaf or GTI over in Europe, there's just a lot of exploratory work going on — I'm leaving a week from Saturday, I'll be gone for a month, there's a lot of rumors France is heating up, so I'm spending a couple weeks in France, keynoting a conference in Brussels, Belgium, and the interesting thing is, yesterday, the minister of health of Belgium just called out —

[Note: the conversation continues into a discussion of Germany's cannabis social club pilot program]

Jamie Pearson: In Germany, the proposed pilot program, they're calling them "social clubs," but we automatically think of what's going on in Barcelona, where you go into a coffeeshop and it's a quasi coffeehouse dispensary thing, similar to Amsterdam — no, it's not that. In Germany, it's a co-op, imagine a co-op grocery store, where you've got a couple of co-op members who run it, and you're a member and you buy at that co-op. The way they've proposed the rules, and the rules aren't finalized yet, they're allowing the co-ops to have 500 members, capped, and if you're a member of Co-op A, you can't be a member of any other co-op, and that is not a social-consumption situation, it's simply where you're allowed to go buy your adult-use cannabis, you don't have to have a medical recommendation, but you can only buy from that one social club. So, automatically, I have friends in Germany starting — even before the rules are out — getting ready to start a social club in their particular town, apply for that license the minute the portal opens. And one of the things accompanying that set of rules is decriminalization, you're allowed to possess cannabis — there's a couple of problems with that, I think it's like 20 grams allowed, but 21 grams, you go to jail for three years, so the question is, are the police actually going to have a scale and weigh whether you have 20 or 21 grams, and send you to jail — there's been a lot of feedback on those proposed rules. But here's the point, you have a captive audience — what I predict is these social clubs, you'll have a bunch selling flower, a bunch selling pre-rolls, a bunch selling edibles, right now edibles aren't in the mix, but probably down the road they will be — and then, because they're not allowed to wholesale back and forth to each other, your club's stuff is all you're allowed to have, but because it's decriminalized, there's nothing stopping you from trading with a member of another club, and I predict it'll be kind of like what I remember in Oregon back in 2014, 2015, where you're selling the bag and giving the cannabis for free, or selling the lighter and giving the cannabis for free — they'll find the workarounds, cannabis consumers are very creative, I'm sure it'll all be fine, but, from your standpoint, you've got a captive audience, so if you become the marketing arm for social club A, B, C, and D, I see where you could be highly effective, helping those lists of 500, 500, 500, and 500 know about each other, and facilitate all that nonsense that's going to go on until the government figures out that rule isn't going to work.

Jake Litke: Yeah, that creates really interesting dynamics — the thing we focused on a lot this year, and into next year, is, we now license our entire marketing platform to other agencies, or, in this case, potentially one of these social clubs, where we've done this with some brands as well, "here's your marketing distribution platform, you can have your brand, all 10 of your retailers in the system, and run marketing campaigns with them and manage all of that." So, yeah, that does create some interesting opportunities, I'm very curious to see when Germany's going to open up, but I'll also follow up with you on some of these pilot programs, because our advertising supply partners, a lot of them are actually from Europe — when we first started running digital marketing, like 2018, 2019, none of the US companies would accept the ads, so we found European ad networks that still service the United States audience, and we still have a lot of that, so we have a tremendous inventory available on the advertising side in Europe, it's all likely specific to cannabis, as long as it's legal.

Jamie Pearson: That's amazing, and I think, in the Netherlands and Switzerland specifically, you'd also have a pretty decent market with those pilot programs, because the coffeeshops in the Netherlands, they got to get the word out, so I do think you'd have a market there, and be a first mover, for sure, as long as you've got your compliance ducks in a row, which is your specialty — I see a lot of opportunity for MediaJel in Europe.

Closing Remarks

Jake Litke: Well, I appreciate that — we're here at the top of the hour, Jamie, I want to thank you for your time, do you have any last topics or things you want to leave with everyone that we haven't covered already?

Jamie Pearson: No, just, if you have questions about European expansion, feel free to contact New Holland Group, you'll find me on LinkedIn, that's the easiest place — one of these days I'm going to get a website built.

Jake Litke: Yeah, when you need to — the good news about not having a website is you probably get less spam, and now there's all these AI spam bots that try to analyze who you are, I get these things that bring up the college I went to, in the email subject line.

Jamie Pearson: Yeah, they're getting smart, but also easy to recognize.

Jake Litke: Yeah, it is — I think what will happen is that authentic communication will have more value, which has been on the decline, with everyone trapped in their phone — I think we're going to, as humans, start valuing authentic communication more, so I think that's the upside of AI.

Jamie Pearson: All right, I like that, I like the optimism.

Jake Litke: All right, well, thanks again, Jamie, you can find Jamie on LinkedIn, appreciate your time — this has been Cannabis Marketing Live, I'm Jake Litke, CEO of MediaJel, and we are signing off for the week, thank you.

Jamie Pearson: Thanks.

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Introduction

Jake Litke: Welcome to Cannabis Marketing Live, where we talk about strategies for your cannabis brand or retail business. Today we have Jamie Pearson joining us, and I am actually going to read her bio, because there's too much in it for me to remember, so let me bring this up real quick. Okay, Jamie Pearson is a renowned leader in the cannabis sector, with over a decade of experience, twice recognized by High Times as one of the most influential women in cannabis. She boasts deep ties to the industry, fluent in German, Jamie has 30 years in global real estate across three continents. She's an advisory board member for Ellison Raines, Sellotex — I think I'm pronouncing that right — Lift & Co, and Alpine Group. As the founder of New Holland Group, she offers expertise in various business areas, including international development and financial turnarounds. Before this, Jamie was the president and CEO of Bhang Inc., a top cannabis edible brand, expanding its reach globally, she also serves as Bhang's vice chairman, and is a sought-after speaker in areas like IP licensing, global expansion, and leadership. That is a lot of things you've done, Jamie, lots of years to fill with stuff.

Jamie Pearson: Lots of years to fill.

Jake Litke: So, Jamie and I've spoken many times in the past, at lots of conferences, I've gotten a lot of good insights from her. Let's start with the topic, which is global expansion — I think, for our business, we work primarily with US companies, we've done some work in the UK, a little in Asia, but I'd like to joke about the US industry as operating in 35 countries all by itself, because each state is different, but you're taking things off to Europe and other places — give us just a high level, what does global expansion mean for cannabis brands specifically, for companies in the US today?

What Does Global Expansion Mean for Cannabis Brands?

Jamie Pearson: So, for companies it's different than for brands — just like it is in the US, there are a lot of similarities when you're crossing borders. What I think it basically means is, if you've got a product or a company performing well stateside, and you think that's a big opportunity over in Europe, and the Europeans or South Americans in those different countries are going to want access to my product or my brand, depending on whether you're a company or a brand, then companies and brands start looking at taking that leap, instead of expanding across a state border, they look at going into different countries.

Jake Litke: And what would be some initial things to think about, as a brand that's considering, how do you even start to think about being ready versus not ready, what are some big topics to think about, for a company that's like, "should I even consider this, given the stage I'm at?"

Jamie Pearson: Well, first, let's set a parameter here, that we're going to talk specifically about brands, knowing that if we talk about some of the larger companies in the middle of international expansion, they consider themselves brands, clearly — Curaleaf, GTI, truly — but let's just talk about taking an individual product, I think it'd be easier at a micro level. I think about some of the great brands that exist in cannabis right now, and if you were going to move them anywhere outside of the US, I think the biggest thing you have to figure out is supply chain — my recommendation is always, you start from the shelf and work backwards, because we've all seen a lot of people who can grow excellent cannabis, and then, once they have it, think, "now what do I do with it," and you really need to do that differently, starting from the sale backwards to the product — go find what customers are looking for, what are the holes in the market, what's a niche you might fill. And, when people approach me a lot about, "I want to go to Germany," the first thing I usually ask is, do you have experience, or a team that's already done cross-border expansion, whether it's crossing a state border, maybe into Canada, or from Canada to the US, because I wouldn't recommend someone make that leap on the international level, where you're contending with different currencies, languages, and cultures, before you actually have an expansion strategy dialed in and buttoned up.

Jake Litke: On that topic, inside the US, generally you need to manufacture the product inside the state's borders, the brand itself can move across state borders, and I know the rules are a little different, there's some movement of stuff across borders, but what does it look like today — can you move products physically across borders, and if so, which ones, national borders, international borders?

Moving Product Across Borders

Jamie Pearson: Oh, absolutely, there's a huge import-export market in the international world — the latest statistic, it used to be that Germany was the largest importer of cannabis, now it's Israel, Israel took the top spot, Australia took second, and Germany's third, and they're importing a lot of flower. So flower specifically then needs to go through the process the individual countries require — in Germany, for example, they do a lot of irradiation, you're not allowed to have anything foreign, any kind of microbial problem, it's zero tolerance, so you see a lot of that flower getting irradiated, and there's a lot of controversy about whether irradiated flower has the same potency and entourage effect. But, yes, there's a lot of import-export activity going on internationally — as far as finished goods, not so much, because you've got to figure out how to get that finished good through that country's process, you really do need to manufacture it on-site.

Jake Litke: Okay, so you've got the bulk product, and where's it getting imported from?

Jamie Pearson: Canada imports or exports a lot of flower, a lot of exports coming out of Australia, New Zealand, Colombia — so, imagine, where you see a legal medical market, two things have to happen, the country receiving the cannabis has to have imports allowed, and the country sending it has to have exports allowed, and those two countries have to have some sort of agreement that product moving between them is allowed. So it's not just a matter of Germany allowing imports and Colombia allowing exports, boom, you've got business — Colombia and Germany have to allow that between those two countries specifically. So what you'll see happen a lot is companies will export to Portugal, which is kind of an import hub, and then go through the process of making the products the way they're supposed to be per regulations, and then, EU country to EU country, it's quite a bit easier, the product is marked as EU and can go where it needs to go. But I want to make a distinction, because there's some confusion right now — there isn't adult-use cannabis in Europe at all, other than in the pilot programs, so the one thing people don't realize is that European cannabis, on the legal side, of course there's a robust illicit market, but it's "pharma" —

Medical Cannabis vs. "Pharma" in Europe

Jake Litke: We lost Jamie again for a moment there — oh, and you're back, you know, I think we were supposed to have commercial breaks, I'm not sure why, maybe it's Zoom — but you were saying it's all medical in Europe?

Jamie Pearson: Medical is not in Europe, or South America, like medical is here — in the US we put an air-quote on "medical," because what medical basically means is, there are some true medical states, like Florida, where you've got to go get a doctor's prescription, it's not about pot, it's about medicine, but in the majority, really including Florida, it's an air-quote medical program, where you're not running to your local CVS and picking up a finished cannabis product, you're going to a dispensary, and the prescription process is a little different than the normal prescription process. In the medical market in Europe, that's not the case — in Europe it's a straight-up pharmaceutical model, the doctor has to give you a prescription, the prescription has to be filled by a pharmacist, insurance will cover those prescriptions — that's another whole conversation — and in the medical markets in South America, it's also true.

Getting a Product Into Germany: A Case Study

Jake Litke: Okay, so backing up, let's talk about getting a finished product on the shelf in Germany, for example — let's say I have Jake's Pre-Roll brand, which isn't a real brand, but we'll say it is for now — do I try to figure out the bulk product in Canada and get it shipped to Portugal and work with the manufacturer there, or do I work with the manufacturer in Portugal and they figure out the bulk product?

Jamie Pearson: Is Jake's Pre-Roll intended to be used in the medical program, or as part of an adult-use pilot program?

Jake Litke: Well, I don't know, you're the expert, which one should I do, Germany, I want to sell Jake's Pre-Roll in Germany.

Jamie Pearson: Okay, are pre-rolls allowed? Not really, there's some gray area — the adult-use program in Germany doesn't exist yet, the rules haven't come out, but you can go to Switzerland or the Netherlands and do one of those two pilot programs if you want pre-rolls, and then you got to determine whether pre-rolls are allowed in those pilot programs. The Swiss pilot program is pretty liberal, they actually want the companies approved for their pilot program to partner with a university — the university isn't doing a double-blind medical study, what they're doing is collecting data, to determine, is it a beverage, a pre-roll, an edible, whatever it is, there's no limit — so you submit your application, and they go, "yep, we love Jake's Pre-Roll, we're going to let that into the market," and then the university starts tracking who purchases it, how many milligrams, did they have a great experience — and to get into that pilot program, you've got to partner with one of the companies already approved. Right now, the two operational ones are the Netherlands or Switzerland, and I think the German pilot program will probably start next year, based on what I'm reading, it does look like they'll probably hit their target dates — now, we all know it's cannabis, so trust but verify, I wouldn't invest a bunch of money based on dates — but if you want to get that pre-roll into a pilot program right now, I'd be looking at the Netherlands, but mostly Switzerland. If you want to get it into the medical program, it's sort of like going through the FDA process, if it's a finished product where the pharmacist pulls it off the shelf — the product has to be approved, and that process is about 18 months from start to finish, more like two years, approval very similar to getting a drug approved in the US, that's pre-packaged. But one of the workarounds a lot of people in Europe are finding, specifically in Germany, is they're going through compounding pharmacies, because the fulcrum of that program is the prescription — if the doctor prescribes a pre-roll, then pre-rolls are allowed in the medical program for you, because that's your prescription, and the doctor sends you to a compounding pharmacy that can actually make those pre-rolls for you. Right now there's a big bunch of activity, companies trying to get the capex spent for machinery in these larger compounding pharmacies. And the other thing I'll say, we have kind of a dual pharmacy model in the US, where we have the CVS/Walgreens type pharmacy, and also compounding pharmacies that make medicine on-site — in Germany they have some larger CVS-type pharmacies where the pharmacists are actually doing a lot of production in their clean rooms in the back, because they cut the middleman out, there's a lot of expense saved, it's just a different medical program over there. And the other thing to realize is, everybody has health insurance — I know it's hard for Americans to fathom — it's considered a right, and about a third of people have private health insurance, two-thirds have government health insurance, and both cover cannabis if the doctor prescribes it, and if you can get through the insurance hoops.

Compounding Pharmacies Explained

Jake Litke: Just to be clear, because "compounding pharmacies" isn't a term I'm familiar with, it sounds like a pharmacy that makes products on-site?

Jamie Pearson: Yeah, so, in the US there's lots of compounding pharmacies, every city's got them, and what that is, for medicines that have to be specifically tailored to the individual, based on your height, weight, allergies, whatever — a great example would be menopause medicine, based on measuring your particular hormonal makeup, and your doctor might prescribe a particular amount of hormone replacement therapy tailored for you, you're not going to just buy testosterone off the shelf. So compounding pharmacies do that — the other thing they do is a lot of chemotherapy, there are nuclear pharmacists who literally make that chemotherapy for you. So that's what compounding pharmacies are, and, over in Europe, it's no different.

Jake Litke: Great, thank you — and I'm just going to say, right out of the gate, I have a cursory knowledge of what's going on in South America, I've got a couple clients down there, but I don't consider myself a South American expert by any stretch.

Jamie Pearson: Okay, noted.

Choosing Where to Start

Jake Litke: All right, so if you want to get into CPG or medical — and I guess it's kind of a — but if you talk about it from a brand perspective, you've already mentioned a handful of markets in Europe, but they all have slightly different rules, different cultures — how do you go about identifying where you should start for your brand, and how do you advise people on that?

Jamie Pearson: I think the first thing that seems very natural is, you should get your butt to an international conference on the continent you want to do business in, and go start meeting people, talking to people, doing the research, get into the pharmacies, talk to the doctors if you can, but more importantly, talk to the cannabis companies at those conferences, and the people speaking, because that's how you're really going to break in and figure it out.

Jake Litke: Going through the expo hall.

Jamie Pearson: Yeah, talking to people who have booths, doing reconnaissance and networking, and pretty soon you'll figure out whether what you intended to do is viable or not.

Jake Litke: And, in your experience, how have you found the reception of American brands, or people bringing American brands to European countries, how's that gone?

How Europeans Receive American Brands

Jamie Pearson: That's a good question — what I'll say is, Europeans love American brands, that's a broad, sweeping general statement, but generally speaking, especially California brands, the Cookies, the Jungle Boys, the true stoner culture of Europe knows who the brands are in America, and really wants to see that high-quality flower come over — but they're growing some pretty great flower over in Europe as well, and there's the flip side, where the OGs of the European cannabis markets, the people who've been operating in Amsterdam, in Barcelona, they can take it or leave it, they're not necessarily Americaphiles in that regard. But a lot of the business people really value the American experience, because think about it, some operators in the space have 20, 30 years of know-how, and then you've got operators in the legal market with 10, 20 years of know-how, and there's a lot of value in avoiding avoidable mistakes, so there is some desire to have that American know-how come over. The one thing I'd caution, though, is take a beat, get to know the culture, maybe get to know a little of the language, before you come in as the hard-charging "I'm an American and I know what I'm doing," maybe figure out culturally the right way to approach how you're going to enter that market.

Jake Litke: I think we mentioned earlier that you speak German — I imagine that's incredibly helpful.

Jamie Pearson: Most definitely, most definitely — I studied at the University of Wilhelmshaven in '97, I married a German, my kids are dual citizens, I've owned real estate there, I've lived there, I've been on the social health insurance, I understand how that culture works. I'm not going to tell you I'm an expert, just like anything else — I always think about, imagine saying "I'm an expert in American culture," and then you're in New York City, and then you travel to where I live in Montana, then Texas, then New England, then California — what is actually American culture? There are some things Germans have in common, Austrians, the German-speaking countries, but there's a lot of differences too, dialects, languages, regional things — so, for example, in the US, if you were making a product geared toward New Orleans, it might be Mardi Gras themed, if you go into DC it might be government or Patriot themed, Detroit might be "Detroit Rock City" themed or something — you're going to have that same type of difference over there. So the one-size-fits-all approach doesn't work here, and it doesn't work there, unless your brand is a true brand that speaks to the people themselves, regardless of their cultural orientation.

Jake Litke: And the brands, continuing with Germany for now, their medical pharma brands are essentially — I don't imagine you'd see a Jungle Boys product on a pharmacy shelf necessarily, right?

Jamie Pearson: Right, for the medical brands on the shelf in pharmacies right now, that's not really how it works, so the brand is kind of a wide open field right now, from a branding perspective.

Consistency and Pharma-Grade Cannabinoids

Jake Litke: Absolutely.

Jamie Pearson: So, if you're going to focus on medical, which we should really just be calling pharma, and go after that insurance, government insurance money, then you really need to think about pharma, and how pharma works. About four out of every five or six medications approved worldwide have some sort of plant-based element, come from some extract of some plant, so cannabis wouldn't be unique in that regard, but what you have to have is consistency — if you're going to make the next Advil, the Advil pill has to be the same whether you take it in the US or Germany, it has to be patentable, protectable, the formulation has to be protectable, but consistent. So your API, active pharmaceutical ingredient, if that's a cannabinoid, that cannabinoid has to be grown to that level of replication and consistency expected at a pharmaceutical level, grown in a pharmaceutical-approved plant — EU-GMP is the level in the EU, and if you want to go one step higher, where you don't have to get approvals from all the different places, you can go to the Swiss pharmaceutical level, which is approved pretty much for everyone worldwide, it's the highest level of certification you can get. So those Swiss pharmaceutical companies in the cannabinoid space are really thinking about replicable API, getting patents on genetics, fingerprinting genetics.

Genetic Fingerprinting and Patents

Jamie Pearson: The other nugget I'll tell you people should be thinking about — if you've got a really amazing strain, and can partner with a European company, like Bedrocan or some of the bigger companies, and get that strain fingerprinted and protected in Europe, that's allowed right now — in America it's not, because cannabis is federally illegal, you cannot get a federal patent or trademark on anything cannabis, I know people are going to say, "yes you can," it's really difficult, and it's not just a matter of course of business in the US, it's a matter of course in Europe too, but Europe is party to a treaty, so those patents and trademarks in Europe do actually apply to the US, or 72 countries in that treaty. So one advantage would be to go get that plant and genetic fingerprinted in Europe, in anticipation of federal legalization, because then you'll automatically have it here — you'll still have to do some paperwork here, but you'll have what you need, the first commercialization date, the date of protection, subject to an American treaty — that's going to give you a big leg up on that genetic footprint.

Jake Litke: Is that something you've worked with people to help them do?

Jamie Pearson: I'm currently working with people doing that right now, and it's a big race, for sure.

Jake Litke: How long does that process take?

Jamie Pearson: Anywhere from six months to two years, depending — one of the things people also don't realize is, a lot of times the genetics aren't clean, so you really want to make sure that phenotype is clean, and there are companies that can clean that up if you've got systemic problems, so you want that really super clean phenotype before you go fingerprint it. So the process, in the beginning, is making sure what you've got is what you think it is, and you'd be surprised how many people don't have what they think they have — I got some genetics from my dad way back, like 12 years ago, and we wanted to make a brand out of it, we thought it was Jamaican Lamb's Bread, we thought it was straight from Bob Marley's farm, there was this big family lore, my uncle went to Jamaica and got these seeds, and when we had the genetic testing done, it was actually a cross of Jamaican Lamb's Bread and Granddaddy Purple — well, my dad and my uncle had been growing those two plants in the same room for probably 20 years, just cloning, cloning, cloning, and pretty soon they all morphed into each other, and we didn't know we were doing it — so, yeah, it happens a lot.

Live Q&A: EU Certification and Canadian Advantages

Jake Litke: All right, we do have a Q&A section, feel free to drop questions in — we have a question, "Jamie, can you recommend an auditor for EU certification," but before you answer, describe exactly what that is for everyone.

Jamie Pearson: They want an auditor for EU certification to come into your facility and get EU-GMP, is that what you're referring to? We'll see if we get a response to the question about the question — someone raised their hand, if you can type your message in the Q&A — oh, here, Tabitha Fritz, what advantage, if any, do Canadian companies have over US-based companies with regard to entering the European market? Oh, that's easy — Canada is federally legal, and allows export, and in the US, if you're trying to export THC-containing product, you're committing a federal crime, you can't export out of the US into Europe. Canadians can export to Europe, Australia, Israel, so Canadian companies have a huge advantage that way.

Jake Litke: Yeah, not going to jail, that's a good one, a big advantage.

Jamie Pearson: And then I'll answer the EU compliance question — what I'll tell you is, if you're going to just try to do broad EU, you literally could Google "EU compliance," and when you pull up companies operating out of the EU — I'll make a broad, sweeping general statement — but you're going to find the ones with the wherewithal to get their websites translated into English and available on an American ISP, you're going to be dealing with a good company. And the one thing I talk about all the time, anecdotally, to my friends, is that the way the European education system works, you don't really have people fall through the cracks the way they do here, because we have this one-size-fits-all linear education approach, based on the number of hours in your seat, and in the fourth grade they'll separate you, and there's three finishing school levels — in Germany, for example, it's called something different in other countries, but they're all pretty similar, there's Hauptschule, Realschule, and Gymnasium, which basically means college prep. So what they do is take kids and figure out, are they designed to be a scholar, if so, they'll send them to the college prep track, if they're not really sure, or don't struggle educationally, they'll put them in the Realschule track, but in the Hauptschule track, it's the track where there are kids who do well with their hands, mechanically inclined, want to touch things rather than read about them, based on the different intelligences we have. So what will happen is, you'll have a bus driver, buy tickets at the train station, buy a plant at the garden center, and in America it's people who end up in those jobs, but in Europe it's people who trained for those jobs — the person working at the plant center is going to tell you the Latin name of the plant, the best way to take care of it, they'll know everything about every plant they're selling, you're going to get good information there. So I'd generally say, when I'm in Europe and talking to somebody, I'm pretty much going to take it to the bank — conversely, if I'm in Lowe's or Home Depot and ask if they have a widget, and they go, "nope, we don't carry that," I'm like, I'm gonna go look for myself, because you're probably not giving me good information, and usually I go find the widget myself. That just doesn't happen over there, so, short answer, you're safe with a Google search.

Novel Food Certification

Jake Litke: Is it worth trying to get novel food certification in the EU, or is it, as some suggested, a scheme by certain pharma companies to control the market — is it possible to get cannabis into the European market as a food ingredient?

Jamie Pearson: That's a great question, Brandon — so I went through the novel food process when I worked at Bhang, I should clarify, I attempted to get our CBD chocolate through the novel foods process, this was pre-COVID. Right now there are companies with registration numbers in the novel foods program, but the program isn't a fully baked program yet — pun intended — so I would say no. I mean, there's opportunity, if you can get it done, and you're willing to spend that money, you'd have a leg up on everybody else, first-mover status, but you're not going to know when that process will be finalized, because it's not finalized yet, and right now I would tell you I wouldn't do it, and here's the main reason why — the EU is no joke when it comes to food for European citizens, they don't allow GMOs in their food, good or bad, there are some GMOs people think are wonderful, they're just flat not allowed there, they don't have the level of preservatives and things in their food that we have here — where, in America, you go to Costco and buy a two or three-week supply of food, that bread in your bread box lasts two weeks, that bread is turning moldy in two days in Europe, they just don't have the same level of stuff in their food that we have in ours. Our FDA allows just about anything, their food regulation agencies don't let just about anything through, so you've got to be smart and careful about it — make sure you've hired a consultant with success getting things through novel foods — but the short answer for me is, I wouldn't do it yet, you're barking up the wrong tree until they get a little further along in the regulations.

Navigating Vague and Contradictory Laws

Jake Litke: Let's dig in a little more on regulations and legal in general — we have our own compliance department at MediaJel, because we have to do advertising, and there's all kinds of different laws everywhere, and, as I mentioned, we're running ads now in the UK, we've had some advertisers want to do work in Thailand, which was an interesting legal — we have an in-house lawyer who researches all this at this point — but frequently what we found is, in Thailand, the laws are both vague and contradictory, one law says you can do it, another says you can't, and there's some vague classification of what category the product even falls into, where you can advertise it or not. How do you figure out the right legal people to work with, or do you have a network of legal experts in each country you work with, how do you approach that?

Jamie Pearson: I do, I have a pretty good network everywhere, and in Thailand I've got a couple people, I actually sit on the advisory board of a company that went from Sacramento to Thailand, and that's been a learning process, there's a lot of opportunity over there, for sure it's obviously a tourist market, because the price per gram of cannabis in Thailand, the locals couldn't afford it.

Jake Litke: Right, that's when I was researching, didn't seem like it was real, I was like, wait, that seems really high.

Jamie Pearson: Yeah, it's high, and the other thing that's kind of comical is, a lot of the cannabis being sold in Thailand right now actually sat in a shipping container for 14 months, it's moldy, it's dry, it's horrible, and they're charging ten dollars a gram, and tourists are paying for it — so the people selling it are making great money, and at some point that's going to dry up, pun intended. But the opportunity, going back to your marketing rules question, whenever you've got vagueness and contradiction, I say you have opportunity to exploit that — where you run into trouble goes back to that cultural question, you definitely need to have a local, and maybe get more than one opinion, and the one thing I find in those small Asian countries, and small Caribbean countries, is everybody is somehow tied to the prime minister, or "my uncle's brother's cousin is connected to the general," and you're going to get all that kind of stuff, and it's hard to really filter through what's real — I mean, it's all basically real, but what matters is, so what I do is talk to different people on the ground, who have different things to say, and try to find that common thread, and eventually the people really running the cannabis industry on the legal side, both legal and illicit, will come forward, and you'll figure out who they are, and you'll also figure out it's probably the people running the illicit side who have control of the government, and those are the people you need to get their blessing from, before you worry about the government — so, depending on what country it is, you really have to get steeped in that culture.

Jake Litke: That's helpful, but also not helpful, in the sense that there's no one rule, all the countries are different — and what you were just explaining, some of the smaller countries, Caribbean, Southeast Asia, sounds very different than what's happening in Germany, almost like polar opposites.

Jamie Pearson: That's what I think makes it fun — when I was working at Bhang, I did that on a smaller level, having to figure out what's the rule in New Mexico, what's the rule in California, what's the rule in Canada, and try to take the product we had and make it consistent across all those different rules, the packaging, we wanted it to look a little similar where we could, in some places we couldn't. So, I really put my 10,000 hours in, in that regard, and what I've figured out is, you can't really do any of it sitting on the phone or a computer, you gotta get your butt on an airplane, go to that location, talk to people, go to the conferences, go to the dispensaries, you really gotta touch it, taste it, feel it, and be in learning mode rather than knowing mode.

New Holland Group and Cross-Border Consulting

Jake Litke: Yeah, that makes sense — maybe you could spend a little time talking, I was asking pretty specific questions that occurred to me, I'm sure there's a lot I haven't even thought to ask. We didn't touch on this earlier, but you have your current business, New Holland Group, maybe you can talk a little about what you do for people, and then I'll probably have more questions.

Jamie Pearson: Yeah, love to — New Holland Group is an international consultancy I started after I left Bhang, I really intended to take a break, was thinking about getting back into real estate, which is what I did before cannabis, and then I had a couple people call me and say, "hey, now that you're not working, would you come help me do this or that," and then the phone calls kept coming — I still don't have a website, don't have a social media presence, because I haven't needed it, it's just been word of mouth, and the business has grown beyond what I anticipated. What I'm doing is, I've assembled a team of experts in different areas of operation, soup to nuts, seed to shelf — I have experts who work in cultivation and pheno-hunting, I have one on my team who's an absolute encyclopedic expert on all things New York, because that's going to be a huge market, and the New England market, very similar to the European market, dense in population, doesn't require a lot of transportation to move product — when you think about California, that giant land mass from San Diego to Sacramento or San Francisco, you've got a lot in between, and those markets are like five different countries within California, but when you're up in New York, hopping from borough to borough is a snap. I like people to understand, Germany has 85 million people in a space about the size of Oregon, so, to put that in perspective, you can move a lot of product in a very short amount of time, it makes distribution simple. So I'm helping people interested in moving across borders, taking their brands into other countries, that's part of what I do. A lot of what I'm doing is business strategy, helping C-suites think about what to do first, recognizing what's their low-hanging fruit, because a lot of times you can't see the forest for the trees within your own organization, so I do a lot of that strategic work with companies. But what I've done a lot of, primarily, is — it seems like everybody's fundraising, and I do a lot of that, I'd say cultural translation, where they're trying to speak to investors in the US, in Germany, in the UK, and you really need — there's some things you've got to have across investor culture, that I find a lot of companies just don't understand about raising money — so I'm doing a lot of capital-raising advising, which I actually find really fun, I'm helping people with their decks.

Fundraising Advice: Speak Like the Investor

Jamie Pearson: I'll tell the audience the one big takeaway, from working the last year with a lot of companies raising money — the mistake they make is, they'll have a deck that says, "this is who we are, this is what we're doing, this is our product, we need five million dollars because we're going to buy machines, or do this or that" — and, as an investor, that's you saying everything about who you are, what you want, and what you need. What I care about as an investor is, I'm going to give you money, and how am I going to get it back — so I really want people to shift the paradigm, and speak as though they were the investor listening to the material, because the investor cares more about what's in it for them than what's in it for you, and there's a place where those two things intersect, and that's where the magic happens. So if you've identified a problem in a market, a niche, or a hole, and you're solving it, and your solution is going to make you three dollars a widget, and you have the capacity to move eight million widgets a month, that's a 24 million dollar proposal, and if it only costs you 500 grand to make that 8 million, investors understand math — but a lot of times, that company wouldn't even talk about the widget, they wouldn't talk about that, because it's not for them, that's not what's exciting to them, you got to talk about what's exciting to the investor. I have yet to receive a deck that does that well, where I'm like, "oh, you don't need me, because you're telling the investor everything they need to know" — you got to tell the investor what's in it for them, that's my tidbit I'll give the audience for free.

Jake Litke: There you go.

Germany's Cannabis Social Clubs

Jake Litke: So, it sounds like you're dealing with companies at all stages, from "all I have is an idea or a strain and a deck that needs work," what are some of the organizations you're working with that are — or are you working with companies at a larger scale, trying to solve different sections than just fundraising?

Jamie Pearson: Yeah, I have some very large clients, I've got a couple large investment banks I work for, trying to find that next Curaleaf or GTI over in Europe, there's just a lot of exploratory work going on — I'm leaving a week from Saturday, I'll be gone for a month, there's a lot of rumors France is heating up, so I'm spending a couple weeks in France, keynoting a conference in Brussels, Belgium, and the interesting thing is, yesterday, the minister of health of Belgium just called out —

[Note: the conversation continues into a discussion of Germany's cannabis social club pilot program]

Jamie Pearson: In Germany, the proposed pilot program, they're calling them "social clubs," but we automatically think of what's going on in Barcelona, where you go into a coffeeshop and it's a quasi coffeehouse dispensary thing, similar to Amsterdam — no, it's not that. In Germany, it's a co-op, imagine a co-op grocery store, where you've got a couple of co-op members who run it, and you're a member and you buy at that co-op. The way they've proposed the rules, and the rules aren't finalized yet, they're allowing the co-ops to have 500 members, capped, and if you're a member of Co-op A, you can't be a member of any other co-op, and that is not a social-consumption situation, it's simply where you're allowed to go buy your adult-use cannabis, you don't have to have a medical recommendation, but you can only buy from that one social club. So, automatically, I have friends in Germany starting — even before the rules are out — getting ready to start a social club in their particular town, apply for that license the minute the portal opens. And one of the things accompanying that set of rules is decriminalization, you're allowed to possess cannabis — there's a couple of problems with that, I think it's like 20 grams allowed, but 21 grams, you go to jail for three years, so the question is, are the police actually going to have a scale and weigh whether you have 20 or 21 grams, and send you to jail — there's been a lot of feedback on those proposed rules. But here's the point, you have a captive audience — what I predict is these social clubs, you'll have a bunch selling flower, a bunch selling pre-rolls, a bunch selling edibles, right now edibles aren't in the mix, but probably down the road they will be — and then, because they're not allowed to wholesale back and forth to each other, your club's stuff is all you're allowed to have, but because it's decriminalized, there's nothing stopping you from trading with a member of another club, and I predict it'll be kind of like what I remember in Oregon back in 2014, 2015, where you're selling the bag and giving the cannabis for free, or selling the lighter and giving the cannabis for free — they'll find the workarounds, cannabis consumers are very creative, I'm sure it'll all be fine, but, from your standpoint, you've got a captive audience, so if you become the marketing arm for social club A, B, C, and D, I see where you could be highly effective, helping those lists of 500, 500, 500, and 500 know about each other, and facilitate all that nonsense that's going to go on until the government figures out that rule isn't going to work.

Jake Litke: Yeah, that creates really interesting dynamics — the thing we focused on a lot this year, and into next year, is, we now license our entire marketing platform to other agencies, or, in this case, potentially one of these social clubs, where we've done this with some brands as well, "here's your marketing distribution platform, you can have your brand, all 10 of your retailers in the system, and run marketing campaigns with them and manage all of that." So, yeah, that does create some interesting opportunities, I'm very curious to see when Germany's going to open up, but I'll also follow up with you on some of these pilot programs, because our advertising supply partners, a lot of them are actually from Europe — when we first started running digital marketing, like 2018, 2019, none of the US companies would accept the ads, so we found European ad networks that still service the United States audience, and we still have a lot of that, so we have a tremendous inventory available on the advertising side in Europe, it's all likely specific to cannabis, as long as it's legal.

Jamie Pearson: That's amazing, and I think, in the Netherlands and Switzerland specifically, you'd also have a pretty decent market with those pilot programs, because the coffeeshops in the Netherlands, they got to get the word out, so I do think you'd have a market there, and be a first mover, for sure, as long as you've got your compliance ducks in a row, which is your specialty — I see a lot of opportunity for MediaJel in Europe.

Closing Remarks

Jake Litke: Well, I appreciate that — we're here at the top of the hour, Jamie, I want to thank you for your time, do you have any last topics or things you want to leave with everyone that we haven't covered already?

Jamie Pearson: No, just, if you have questions about European expansion, feel free to contact New Holland Group, you'll find me on LinkedIn, that's the easiest place — one of these days I'm going to get a website built.

Jake Litke: Yeah, when you need to — the good news about not having a website is you probably get less spam, and now there's all these AI spam bots that try to analyze who you are, I get these things that bring up the college I went to, in the email subject line.

Jamie Pearson: Yeah, they're getting smart, but also easy to recognize.

Jake Litke: Yeah, it is — I think what will happen is that authentic communication will have more value, which has been on the decline, with everyone trapped in their phone — I think we're going to, as humans, start valuing authentic communication more, so I think that's the upside of AI.

Jamie Pearson: All right, I like that, I like the optimism.

Jake Litke: All right, well, thanks again, Jamie, you can find Jamie on LinkedIn, appreciate your time — this has been Cannabis Marketing Live, I'm Jake Litke, CEO of MediaJel, and we are signing off for the week, thank you.

Jamie Pearson: Thanks.

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Introduction

Jake Litke: Welcome to Cannabis Marketing Live, where we talk about strategies for your cannabis brand or retail business. Today we have Jamie Pearson joining us, and I am actually going to read her bio, because there's too much in it for me to remember, so let me bring this up real quick. Okay, Jamie Pearson is a renowned leader in the cannabis sector, with over a decade of experience, twice recognized by High Times as one of the most influential women in cannabis. She boasts deep ties to the industry, fluent in German, Jamie has 30 years in global real estate across three continents. She's an advisory board member for Ellison Raines, Sellotex — I think I'm pronouncing that right — Lift & Co, and Alpine Group. As the founder of New Holland Group, she offers expertise in various business areas, including international development and financial turnarounds. Before this, Jamie was the president and CEO of Bhang Inc., a top cannabis edible brand, expanding its reach globally, she also serves as Bhang's vice chairman, and is a sought-after speaker in areas like IP licensing, global expansion, and leadership. That is a lot of things you've done, Jamie, lots of years to fill with stuff.

Jamie Pearson: Lots of years to fill.

Jake Litke: So, Jamie and I've spoken many times in the past, at lots of conferences, I've gotten a lot of good insights from her. Let's start with the topic, which is global expansion — I think, for our business, we work primarily with US companies, we've done some work in the UK, a little in Asia, but I'd like to joke about the US industry as operating in 35 countries all by itself, because each state is different, but you're taking things off to Europe and other places — give us just a high level, what does global expansion mean for cannabis brands specifically, for companies in the US today?

What Does Global Expansion Mean for Cannabis Brands?

Jamie Pearson: So, for companies it's different than for brands — just like it is in the US, there are a lot of similarities when you're crossing borders. What I think it basically means is, if you've got a product or a company performing well stateside, and you think that's a big opportunity over in Europe, and the Europeans or South Americans in those different countries are going to want access to my product or my brand, depending on whether you're a company or a brand, then companies and brands start looking at taking that leap, instead of expanding across a state border, they look at going into different countries.

Jake Litke: And what would be some initial things to think about, as a brand that's considering, how do you even start to think about being ready versus not ready, what are some big topics to think about, for a company that's like, "should I even consider this, given the stage I'm at?"

Jamie Pearson: Well, first, let's set a parameter here, that we're going to talk specifically about brands, knowing that if we talk about some of the larger companies in the middle of international expansion, they consider themselves brands, clearly — Curaleaf, GTI, truly — but let's just talk about taking an individual product, I think it'd be easier at a micro level. I think about some of the great brands that exist in cannabis right now, and if you were going to move them anywhere outside of the US, I think the biggest thing you have to figure out is supply chain — my recommendation is always, you start from the shelf and work backwards, because we've all seen a lot of people who can grow excellent cannabis, and then, once they have it, think, "now what do I do with it," and you really need to do that differently, starting from the sale backwards to the product — go find what customers are looking for, what are the holes in the market, what's a niche you might fill. And, when people approach me a lot about, "I want to go to Germany," the first thing I usually ask is, do you have experience, or a team that's already done cross-border expansion, whether it's crossing a state border, maybe into Canada, or from Canada to the US, because I wouldn't recommend someone make that leap on the international level, where you're contending with different currencies, languages, and cultures, before you actually have an expansion strategy dialed in and buttoned up.

Jake Litke: On that topic, inside the US, generally you need to manufacture the product inside the state's borders, the brand itself can move across state borders, and I know the rules are a little different, there's some movement of stuff across borders, but what does it look like today — can you move products physically across borders, and if so, which ones, national borders, international borders?

Moving Product Across Borders

Jamie Pearson: Oh, absolutely, there's a huge import-export market in the international world — the latest statistic, it used to be that Germany was the largest importer of cannabis, now it's Israel, Israel took the top spot, Australia took second, and Germany's third, and they're importing a lot of flower. So flower specifically then needs to go through the process the individual countries require — in Germany, for example, they do a lot of irradiation, you're not allowed to have anything foreign, any kind of microbial problem, it's zero tolerance, so you see a lot of that flower getting irradiated, and there's a lot of controversy about whether irradiated flower has the same potency and entourage effect. But, yes, there's a lot of import-export activity going on internationally — as far as finished goods, not so much, because you've got to figure out how to get that finished good through that country's process, you really do need to manufacture it on-site.

Jake Litke: Okay, so you've got the bulk product, and where's it getting imported from?

Jamie Pearson: Canada imports or exports a lot of flower, a lot of exports coming out of Australia, New Zealand, Colombia — so, imagine, where you see a legal medical market, two things have to happen, the country receiving the cannabis has to have imports allowed, and the country sending it has to have exports allowed, and those two countries have to have some sort of agreement that product moving between them is allowed. So it's not just a matter of Germany allowing imports and Colombia allowing exports, boom, you've got business — Colombia and Germany have to allow that between those two countries specifically. So what you'll see happen a lot is companies will export to Portugal, which is kind of an import hub, and then go through the process of making the products the way they're supposed to be per regulations, and then, EU country to EU country, it's quite a bit easier, the product is marked as EU and can go where it needs to go. But I want to make a distinction, because there's some confusion right now — there isn't adult-use cannabis in Europe at all, other than in the pilot programs, so the one thing people don't realize is that European cannabis, on the legal side, of course there's a robust illicit market, but it's "pharma" —

Medical Cannabis vs. "Pharma" in Europe

Jake Litke: We lost Jamie again for a moment there — oh, and you're back, you know, I think we were supposed to have commercial breaks, I'm not sure why, maybe it's Zoom — but you were saying it's all medical in Europe?

Jamie Pearson: Medical is not in Europe, or South America, like medical is here — in the US we put an air-quote on "medical," because what medical basically means is, there are some true medical states, like Florida, where you've got to go get a doctor's prescription, it's not about pot, it's about medicine, but in the majority, really including Florida, it's an air-quote medical program, where you're not running to your local CVS and picking up a finished cannabis product, you're going to a dispensary, and the prescription process is a little different than the normal prescription process. In the medical market in Europe, that's not the case — in Europe it's a straight-up pharmaceutical model, the doctor has to give you a prescription, the prescription has to be filled by a pharmacist, insurance will cover those prescriptions — that's another whole conversation — and in the medical markets in South America, it's also true.

Getting a Product Into Germany: A Case Study

Jake Litke: Okay, so backing up, let's talk about getting a finished product on the shelf in Germany, for example — let's say I have Jake's Pre-Roll brand, which isn't a real brand, but we'll say it is for now — do I try to figure out the bulk product in Canada and get it shipped to Portugal and work with the manufacturer there, or do I work with the manufacturer in Portugal and they figure out the bulk product?

Jamie Pearson: Is Jake's Pre-Roll intended to be used in the medical program, or as part of an adult-use pilot program?

Jake Litke: Well, I don't know, you're the expert, which one should I do, Germany, I want to sell Jake's Pre-Roll in Germany.

Jamie Pearson: Okay, are pre-rolls allowed? Not really, there's some gray area — the adult-use program in Germany doesn't exist yet, the rules haven't come out, but you can go to Switzerland or the Netherlands and do one of those two pilot programs if you want pre-rolls, and then you got to determine whether pre-rolls are allowed in those pilot programs. The Swiss pilot program is pretty liberal, they actually want the companies approved for their pilot program to partner with a university — the university isn't doing a double-blind medical study, what they're doing is collecting data, to determine, is it a beverage, a pre-roll, an edible, whatever it is, there's no limit — so you submit your application, and they go, "yep, we love Jake's Pre-Roll, we're going to let that into the market," and then the university starts tracking who purchases it, how many milligrams, did they have a great experience — and to get into that pilot program, you've got to partner with one of the companies already approved. Right now, the two operational ones are the Netherlands or Switzerland, and I think the German pilot program will probably start next year, based on what I'm reading, it does look like they'll probably hit their target dates — now, we all know it's cannabis, so trust but verify, I wouldn't invest a bunch of money based on dates — but if you want to get that pre-roll into a pilot program right now, I'd be looking at the Netherlands, but mostly Switzerland. If you want to get it into the medical program, it's sort of like going through the FDA process, if it's a finished product where the pharmacist pulls it off the shelf — the product has to be approved, and that process is about 18 months from start to finish, more like two years, approval very similar to getting a drug approved in the US, that's pre-packaged. But one of the workarounds a lot of people in Europe are finding, specifically in Germany, is they're going through compounding pharmacies, because the fulcrum of that program is the prescription — if the doctor prescribes a pre-roll, then pre-rolls are allowed in the medical program for you, because that's your prescription, and the doctor sends you to a compounding pharmacy that can actually make those pre-rolls for you. Right now there's a big bunch of activity, companies trying to get the capex spent for machinery in these larger compounding pharmacies. And the other thing I'll say, we have kind of a dual pharmacy model in the US, where we have the CVS/Walgreens type pharmacy, and also compounding pharmacies that make medicine on-site — in Germany they have some larger CVS-type pharmacies where the pharmacists are actually doing a lot of production in their clean rooms in the back, because they cut the middleman out, there's a lot of expense saved, it's just a different medical program over there. And the other thing to realize is, everybody has health insurance — I know it's hard for Americans to fathom — it's considered a right, and about a third of people have private health insurance, two-thirds have government health insurance, and both cover cannabis if the doctor prescribes it, and if you can get through the insurance hoops.

Compounding Pharmacies Explained

Jake Litke: Just to be clear, because "compounding pharmacies" isn't a term I'm familiar with, it sounds like a pharmacy that makes products on-site?

Jamie Pearson: Yeah, so, in the US there's lots of compounding pharmacies, every city's got them, and what that is, for medicines that have to be specifically tailored to the individual, based on your height, weight, allergies, whatever — a great example would be menopause medicine, based on measuring your particular hormonal makeup, and your doctor might prescribe a particular amount of hormone replacement therapy tailored for you, you're not going to just buy testosterone off the shelf. So compounding pharmacies do that — the other thing they do is a lot of chemotherapy, there are nuclear pharmacists who literally make that chemotherapy for you. So that's what compounding pharmacies are, and, over in Europe, it's no different.

Jake Litke: Great, thank you — and I'm just going to say, right out of the gate, I have a cursory knowledge of what's going on in South America, I've got a couple clients down there, but I don't consider myself a South American expert by any stretch.

Jamie Pearson: Okay, noted.

Choosing Where to Start

Jake Litke: All right, so if you want to get into CPG or medical — and I guess it's kind of a — but if you talk about it from a brand perspective, you've already mentioned a handful of markets in Europe, but they all have slightly different rules, different cultures — how do you go about identifying where you should start for your brand, and how do you advise people on that?

Jamie Pearson: I think the first thing that seems very natural is, you should get your butt to an international conference on the continent you want to do business in, and go start meeting people, talking to people, doing the research, get into the pharmacies, talk to the doctors if you can, but more importantly, talk to the cannabis companies at those conferences, and the people speaking, because that's how you're really going to break in and figure it out.

Jake Litke: Going through the expo hall.

Jamie Pearson: Yeah, talking to people who have booths, doing reconnaissance and networking, and pretty soon you'll figure out whether what you intended to do is viable or not.

Jake Litke: And, in your experience, how have you found the reception of American brands, or people bringing American brands to European countries, how's that gone?

How Europeans Receive American Brands

Jamie Pearson: That's a good question — what I'll say is, Europeans love American brands, that's a broad, sweeping general statement, but generally speaking, especially California brands, the Cookies, the Jungle Boys, the true stoner culture of Europe knows who the brands are in America, and really wants to see that high-quality flower come over — but they're growing some pretty great flower over in Europe as well, and there's the flip side, where the OGs of the European cannabis markets, the people who've been operating in Amsterdam, in Barcelona, they can take it or leave it, they're not necessarily Americaphiles in that regard. But a lot of the business people really value the American experience, because think about it, some operators in the space have 20, 30 years of know-how, and then you've got operators in the legal market with 10, 20 years of know-how, and there's a lot of value in avoiding avoidable mistakes, so there is some desire to have that American know-how come over. The one thing I'd caution, though, is take a beat, get to know the culture, maybe get to know a little of the language, before you come in as the hard-charging "I'm an American and I know what I'm doing," maybe figure out culturally the right way to approach how you're going to enter that market.

Jake Litke: I think we mentioned earlier that you speak German — I imagine that's incredibly helpful.

Jamie Pearson: Most definitely, most definitely — I studied at the University of Wilhelmshaven in '97, I married a German, my kids are dual citizens, I've owned real estate there, I've lived there, I've been on the social health insurance, I understand how that culture works. I'm not going to tell you I'm an expert, just like anything else — I always think about, imagine saying "I'm an expert in American culture," and then you're in New York City, and then you travel to where I live in Montana, then Texas, then New England, then California — what is actually American culture? There are some things Germans have in common, Austrians, the German-speaking countries, but there's a lot of differences too, dialects, languages, regional things — so, for example, in the US, if you were making a product geared toward New Orleans, it might be Mardi Gras themed, if you go into DC it might be government or Patriot themed, Detroit might be "Detroit Rock City" themed or something — you're going to have that same type of difference over there. So the one-size-fits-all approach doesn't work here, and it doesn't work there, unless your brand is a true brand that speaks to the people themselves, regardless of their cultural orientation.

Jake Litke: And the brands, continuing with Germany for now, their medical pharma brands are essentially — I don't imagine you'd see a Jungle Boys product on a pharmacy shelf necessarily, right?

Jamie Pearson: Right, for the medical brands on the shelf in pharmacies right now, that's not really how it works, so the brand is kind of a wide open field right now, from a branding perspective.

Consistency and Pharma-Grade Cannabinoids

Jake Litke: Absolutely.

Jamie Pearson: So, if you're going to focus on medical, which we should really just be calling pharma, and go after that insurance, government insurance money, then you really need to think about pharma, and how pharma works. About four out of every five or six medications approved worldwide have some sort of plant-based element, come from some extract of some plant, so cannabis wouldn't be unique in that regard, but what you have to have is consistency — if you're going to make the next Advil, the Advil pill has to be the same whether you take it in the US or Germany, it has to be patentable, protectable, the formulation has to be protectable, but consistent. So your API, active pharmaceutical ingredient, if that's a cannabinoid, that cannabinoid has to be grown to that level of replication and consistency expected at a pharmaceutical level, grown in a pharmaceutical-approved plant — EU-GMP is the level in the EU, and if you want to go one step higher, where you don't have to get approvals from all the different places, you can go to the Swiss pharmaceutical level, which is approved pretty much for everyone worldwide, it's the highest level of certification you can get. So those Swiss pharmaceutical companies in the cannabinoid space are really thinking about replicable API, getting patents on genetics, fingerprinting genetics.

Genetic Fingerprinting and Patents

Jamie Pearson: The other nugget I'll tell you people should be thinking about — if you've got a really amazing strain, and can partner with a European company, like Bedrocan or some of the bigger companies, and get that strain fingerprinted and protected in Europe, that's allowed right now — in America it's not, because cannabis is federally illegal, you cannot get a federal patent or trademark on anything cannabis, I know people are going to say, "yes you can," it's really difficult, and it's not just a matter of course of business in the US, it's a matter of course in Europe too, but Europe is party to a treaty, so those patents and trademarks in Europe do actually apply to the US, or 72 countries in that treaty. So one advantage would be to go get that plant and genetic fingerprinted in Europe, in anticipation of federal legalization, because then you'll automatically have it here — you'll still have to do some paperwork here, but you'll have what you need, the first commercialization date, the date of protection, subject to an American treaty — that's going to give you a big leg up on that genetic footprint.

Jake Litke: Is that something you've worked with people to help them do?

Jamie Pearson: I'm currently working with people doing that right now, and it's a big race, for sure.

Jake Litke: How long does that process take?

Jamie Pearson: Anywhere from six months to two years, depending — one of the things people also don't realize is, a lot of times the genetics aren't clean, so you really want to make sure that phenotype is clean, and there are companies that can clean that up if you've got systemic problems, so you want that really super clean phenotype before you go fingerprint it. So the process, in the beginning, is making sure what you've got is what you think it is, and you'd be surprised how many people don't have what they think they have — I got some genetics from my dad way back, like 12 years ago, and we wanted to make a brand out of it, we thought it was Jamaican Lamb's Bread, we thought it was straight from Bob Marley's farm, there was this big family lore, my uncle went to Jamaica and got these seeds, and when we had the genetic testing done, it was actually a cross of Jamaican Lamb's Bread and Granddaddy Purple — well, my dad and my uncle had been growing those two plants in the same room for probably 20 years, just cloning, cloning, cloning, and pretty soon they all morphed into each other, and we didn't know we were doing it — so, yeah, it happens a lot.

Live Q&A: EU Certification and Canadian Advantages

Jake Litke: All right, we do have a Q&A section, feel free to drop questions in — we have a question, "Jamie, can you recommend an auditor for EU certification," but before you answer, describe exactly what that is for everyone.

Jamie Pearson: They want an auditor for EU certification to come into your facility and get EU-GMP, is that what you're referring to? We'll see if we get a response to the question about the question — someone raised their hand, if you can type your message in the Q&A — oh, here, Tabitha Fritz, what advantage, if any, do Canadian companies have over US-based companies with regard to entering the European market? Oh, that's easy — Canada is federally legal, and allows export, and in the US, if you're trying to export THC-containing product, you're committing a federal crime, you can't export out of the US into Europe. Canadians can export to Europe, Australia, Israel, so Canadian companies have a huge advantage that way.

Jake Litke: Yeah, not going to jail, that's a good one, a big advantage.

Jamie Pearson: And then I'll answer the EU compliance question — what I'll tell you is, if you're going to just try to do broad EU, you literally could Google "EU compliance," and when you pull up companies operating out of the EU — I'll make a broad, sweeping general statement — but you're going to find the ones with the wherewithal to get their websites translated into English and available on an American ISP, you're going to be dealing with a good company. And the one thing I talk about all the time, anecdotally, to my friends, is that the way the European education system works, you don't really have people fall through the cracks the way they do here, because we have this one-size-fits-all linear education approach, based on the number of hours in your seat, and in the fourth grade they'll separate you, and there's three finishing school levels — in Germany, for example, it's called something different in other countries, but they're all pretty similar, there's Hauptschule, Realschule, and Gymnasium, which basically means college prep. So what they do is take kids and figure out, are they designed to be a scholar, if so, they'll send them to the college prep track, if they're not really sure, or don't struggle educationally, they'll put them in the Realschule track, but in the Hauptschule track, it's the track where there are kids who do well with their hands, mechanically inclined, want to touch things rather than read about them, based on the different intelligences we have. So what will happen is, you'll have a bus driver, buy tickets at the train station, buy a plant at the garden center, and in America it's people who end up in those jobs, but in Europe it's people who trained for those jobs — the person working at the plant center is going to tell you the Latin name of the plant, the best way to take care of it, they'll know everything about every plant they're selling, you're going to get good information there. So I'd generally say, when I'm in Europe and talking to somebody, I'm pretty much going to take it to the bank — conversely, if I'm in Lowe's or Home Depot and ask if they have a widget, and they go, "nope, we don't carry that," I'm like, I'm gonna go look for myself, because you're probably not giving me good information, and usually I go find the widget myself. That just doesn't happen over there, so, short answer, you're safe with a Google search.

Novel Food Certification

Jake Litke: Is it worth trying to get novel food certification in the EU, or is it, as some suggested, a scheme by certain pharma companies to control the market — is it possible to get cannabis into the European market as a food ingredient?

Jamie Pearson: That's a great question, Brandon — so I went through the novel food process when I worked at Bhang, I should clarify, I attempted to get our CBD chocolate through the novel foods process, this was pre-COVID. Right now there are companies with registration numbers in the novel foods program, but the program isn't a fully baked program yet — pun intended — so I would say no. I mean, there's opportunity, if you can get it done, and you're willing to spend that money, you'd have a leg up on everybody else, first-mover status, but you're not going to know when that process will be finalized, because it's not finalized yet, and right now I would tell you I wouldn't do it, and here's the main reason why — the EU is no joke when it comes to food for European citizens, they don't allow GMOs in their food, good or bad, there are some GMOs people think are wonderful, they're just flat not allowed there, they don't have the level of preservatives and things in their food that we have here — where, in America, you go to Costco and buy a two or three-week supply of food, that bread in your bread box lasts two weeks, that bread is turning moldy in two days in Europe, they just don't have the same level of stuff in their food that we have in ours. Our FDA allows just about anything, their food regulation agencies don't let just about anything through, so you've got to be smart and careful about it — make sure you've hired a consultant with success getting things through novel foods — but the short answer for me is, I wouldn't do it yet, you're barking up the wrong tree until they get a little further along in the regulations.

Navigating Vague and Contradictory Laws

Jake Litke: Let's dig in a little more on regulations and legal in general — we have our own compliance department at MediaJel, because we have to do advertising, and there's all kinds of different laws everywhere, and, as I mentioned, we're running ads now in the UK, we've had some advertisers want to do work in Thailand, which was an interesting legal — we have an in-house lawyer who researches all this at this point — but frequently what we found is, in Thailand, the laws are both vague and contradictory, one law says you can do it, another says you can't, and there's some vague classification of what category the product even falls into, where you can advertise it or not. How do you figure out the right legal people to work with, or do you have a network of legal experts in each country you work with, how do you approach that?

Jamie Pearson: I do, I have a pretty good network everywhere, and in Thailand I've got a couple people, I actually sit on the advisory board of a company that went from Sacramento to Thailand, and that's been a learning process, there's a lot of opportunity over there, for sure it's obviously a tourist market, because the price per gram of cannabis in Thailand, the locals couldn't afford it.

Jake Litke: Right, that's when I was researching, didn't seem like it was real, I was like, wait, that seems really high.

Jamie Pearson: Yeah, it's high, and the other thing that's kind of comical is, a lot of the cannabis being sold in Thailand right now actually sat in a shipping container for 14 months, it's moldy, it's dry, it's horrible, and they're charging ten dollars a gram, and tourists are paying for it — so the people selling it are making great money, and at some point that's going to dry up, pun intended. But the opportunity, going back to your marketing rules question, whenever you've got vagueness and contradiction, I say you have opportunity to exploit that — where you run into trouble goes back to that cultural question, you definitely need to have a local, and maybe get more than one opinion, and the one thing I find in those small Asian countries, and small Caribbean countries, is everybody is somehow tied to the prime minister, or "my uncle's brother's cousin is connected to the general," and you're going to get all that kind of stuff, and it's hard to really filter through what's real — I mean, it's all basically real, but what matters is, so what I do is talk to different people on the ground, who have different things to say, and try to find that common thread, and eventually the people really running the cannabis industry on the legal side, both legal and illicit, will come forward, and you'll figure out who they are, and you'll also figure out it's probably the people running the illicit side who have control of the government, and those are the people you need to get their blessing from, before you worry about the government — so, depending on what country it is, you really have to get steeped in that culture.

Jake Litke: That's helpful, but also not helpful, in the sense that there's no one rule, all the countries are different — and what you were just explaining, some of the smaller countries, Caribbean, Southeast Asia, sounds very different than what's happening in Germany, almost like polar opposites.

Jamie Pearson: That's what I think makes it fun — when I was working at Bhang, I did that on a smaller level, having to figure out what's the rule in New Mexico, what's the rule in California, what's the rule in Canada, and try to take the product we had and make it consistent across all those different rules, the packaging, we wanted it to look a little similar where we could, in some places we couldn't. So, I really put my 10,000 hours in, in that regard, and what I've figured out is, you can't really do any of it sitting on the phone or a computer, you gotta get your butt on an airplane, go to that location, talk to people, go to the conferences, go to the dispensaries, you really gotta touch it, taste it, feel it, and be in learning mode rather than knowing mode.

New Holland Group and Cross-Border Consulting

Jake Litke: Yeah, that makes sense — maybe you could spend a little time talking, I was asking pretty specific questions that occurred to me, I'm sure there's a lot I haven't even thought to ask. We didn't touch on this earlier, but you have your current business, New Holland Group, maybe you can talk a little about what you do for people, and then I'll probably have more questions.

Jamie Pearson: Yeah, love to — New Holland Group is an international consultancy I started after I left Bhang, I really intended to take a break, was thinking about getting back into real estate, which is what I did before cannabis, and then I had a couple people call me and say, "hey, now that you're not working, would you come help me do this or that," and then the phone calls kept coming — I still don't have a website, don't have a social media presence, because I haven't needed it, it's just been word of mouth, and the business has grown beyond what I anticipated. What I'm doing is, I've assembled a team of experts in different areas of operation, soup to nuts, seed to shelf — I have experts who work in cultivation and pheno-hunting, I have one on my team who's an absolute encyclopedic expert on all things New York, because that's going to be a huge market, and the New England market, very similar to the European market, dense in population, doesn't require a lot of transportation to move product — when you think about California, that giant land mass from San Diego to Sacramento or San Francisco, you've got a lot in between, and those markets are like five different countries within California, but when you're up in New York, hopping from borough to borough is a snap. I like people to understand, Germany has 85 million people in a space about the size of Oregon, so, to put that in perspective, you can move a lot of product in a very short amount of time, it makes distribution simple. So I'm helping people interested in moving across borders, taking their brands into other countries, that's part of what I do. A lot of what I'm doing is business strategy, helping C-suites think about what to do first, recognizing what's their low-hanging fruit, because a lot of times you can't see the forest for the trees within your own organization, so I do a lot of that strategic work with companies. But what I've done a lot of, primarily, is — it seems like everybody's fundraising, and I do a lot of that, I'd say cultural translation, where they're trying to speak to investors in the US, in Germany, in the UK, and you really need — there's some things you've got to have across investor culture, that I find a lot of companies just don't understand about raising money — so I'm doing a lot of capital-raising advising, which I actually find really fun, I'm helping people with their decks.

Fundraising Advice: Speak Like the Investor

Jamie Pearson: I'll tell the audience the one big takeaway, from working the last year with a lot of companies raising money — the mistake they make is, they'll have a deck that says, "this is who we are, this is what we're doing, this is our product, we need five million dollars because we're going to buy machines, or do this or that" — and, as an investor, that's you saying everything about who you are, what you want, and what you need. What I care about as an investor is, I'm going to give you money, and how am I going to get it back — so I really want people to shift the paradigm, and speak as though they were the investor listening to the material, because the investor cares more about what's in it for them than what's in it for you, and there's a place where those two things intersect, and that's where the magic happens. So if you've identified a problem in a market, a niche, or a hole, and you're solving it, and your solution is going to make you three dollars a widget, and you have the capacity to move eight million widgets a month, that's a 24 million dollar proposal, and if it only costs you 500 grand to make that 8 million, investors understand math — but a lot of times, that company wouldn't even talk about the widget, they wouldn't talk about that, because it's not for them, that's not what's exciting to them, you got to talk about what's exciting to the investor. I have yet to receive a deck that does that well, where I'm like, "oh, you don't need me, because you're telling the investor everything they need to know" — you got to tell the investor what's in it for them, that's my tidbit I'll give the audience for free.

Jake Litke: There you go.

Germany's Cannabis Social Clubs

Jake Litke: So, it sounds like you're dealing with companies at all stages, from "all I have is an idea or a strain and a deck that needs work," what are some of the organizations you're working with that are — or are you working with companies at a larger scale, trying to solve different sections than just fundraising?

Jamie Pearson: Yeah, I have some very large clients, I've got a couple large investment banks I work for, trying to find that next Curaleaf or GTI over in Europe, there's just a lot of exploratory work going on — I'm leaving a week from Saturday, I'll be gone for a month, there's a lot of rumors France is heating up, so I'm spending a couple weeks in France, keynoting a conference in Brussels, Belgium, and the interesting thing is, yesterday, the minister of health of Belgium just called out —

[Note: the conversation continues into a discussion of Germany's cannabis social club pilot program]

Jamie Pearson: In Germany, the proposed pilot program, they're calling them "social clubs," but we automatically think of what's going on in Barcelona, where you go into a coffeeshop and it's a quasi coffeehouse dispensary thing, similar to Amsterdam — no, it's not that. In Germany, it's a co-op, imagine a co-op grocery store, where you've got a couple of co-op members who run it, and you're a member and you buy at that co-op. The way they've proposed the rules, and the rules aren't finalized yet, they're allowing the co-ops to have 500 members, capped, and if you're a member of Co-op A, you can't be a member of any other co-op, and that is not a social-consumption situation, it's simply where you're allowed to go buy your adult-use cannabis, you don't have to have a medical recommendation, but you can only buy from that one social club. So, automatically, I have friends in Germany starting — even before the rules are out — getting ready to start a social club in their particular town, apply for that license the minute the portal opens. And one of the things accompanying that set of rules is decriminalization, you're allowed to possess cannabis — there's a couple of problems with that, I think it's like 20 grams allowed, but 21 grams, you go to jail for three years, so the question is, are the police actually going to have a scale and weigh whether you have 20 or 21 grams, and send you to jail — there's been a lot of feedback on those proposed rules. But here's the point, you have a captive audience — what I predict is these social clubs, you'll have a bunch selling flower, a bunch selling pre-rolls, a bunch selling edibles, right now edibles aren't in the mix, but probably down the road they will be — and then, because they're not allowed to wholesale back and forth to each other, your club's stuff is all you're allowed to have, but because it's decriminalized, there's nothing stopping you from trading with a member of another club, and I predict it'll be kind of like what I remember in Oregon back in 2014, 2015, where you're selling the bag and giving the cannabis for free, or selling the lighter and giving the cannabis for free — they'll find the workarounds, cannabis consumers are very creative, I'm sure it'll all be fine, but, from your standpoint, you've got a captive audience, so if you become the marketing arm for social club A, B, C, and D, I see where you could be highly effective, helping those lists of 500, 500, 500, and 500 know about each other, and facilitate all that nonsense that's going to go on until the government figures out that rule isn't going to work.

Jake Litke: Yeah, that creates really interesting dynamics — the thing we focused on a lot this year, and into next year, is, we now license our entire marketing platform to other agencies, or, in this case, potentially one of these social clubs, where we've done this with some brands as well, "here's your marketing distribution platform, you can have your brand, all 10 of your retailers in the system, and run marketing campaigns with them and manage all of that." So, yeah, that does create some interesting opportunities, I'm very curious to see when Germany's going to open up, but I'll also follow up with you on some of these pilot programs, because our advertising supply partners, a lot of them are actually from Europe — when we first started running digital marketing, like 2018, 2019, none of the US companies would accept the ads, so we found European ad networks that still service the United States audience, and we still have a lot of that, so we have a tremendous inventory available on the advertising side in Europe, it's all likely specific to cannabis, as long as it's legal.

Jamie Pearson: That's amazing, and I think, in the Netherlands and Switzerland specifically, you'd also have a pretty decent market with those pilot programs, because the coffeeshops in the Netherlands, they got to get the word out, so I do think you'd have a market there, and be a first mover, for sure, as long as you've got your compliance ducks in a row, which is your specialty — I see a lot of opportunity for MediaJel in Europe.

Closing Remarks

Jake Litke: Well, I appreciate that — we're here at the top of the hour, Jamie, I want to thank you for your time, do you have any last topics or things you want to leave with everyone that we haven't covered already?

Jamie Pearson: No, just, if you have questions about European expansion, feel free to contact New Holland Group, you'll find me on LinkedIn, that's the easiest place — one of these days I'm going to get a website built.

Jake Litke: Yeah, when you need to — the good news about not having a website is you probably get less spam, and now there's all these AI spam bots that try to analyze who you are, I get these things that bring up the college I went to, in the email subject line.

Jamie Pearson: Yeah, they're getting smart, but also easy to recognize.

Jake Litke: Yeah, it is — I think what will happen is that authentic communication will have more value, which has been on the decline, with everyone trapped in their phone — I think we're going to, as humans, start valuing authentic communication more, so I think that's the upside of AI.

Jamie Pearson: All right, I like that, I like the optimism.

Jake Litke: All right, well, thanks again, Jamie, you can find Jamie on LinkedIn, appreciate your time — this has been Cannabis Marketing Live, I'm Jake Litke, CEO of MediaJel, and we are signing off for the week, thank you.

Jamie Pearson: Thanks.

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