Ball Family Farms

Mar 22, 2023

Prerolls Surge in Popularity, Offering Opportunity in Mature Markets Everett Smith, CEO of Presidential, discusses how the company has grown to one of the top five infused preroll brands in California and how the preroll market has evolved since the company launched in 2012. Adobe Stock By Jessica Cannabis consumers have increasingly gravitated toward preroll purchases during the past couple years, allowing the product category to command a larger share of many maturing markets. According to a report from cannabis data company Headset , which examines the preroll market's performance and trends in the U.S. and Canada, consumers in both markets spent more than US$725 million on prerolls from January 2022 to June 2022. In that same period, prerolls made up the second largest product category in Canada at 24.1% (+5.9% since June 2021), behind flower at 42.6%, and made up the third largest product category in the U.S. at 12.6% (+2.1% since June 2021) behind flower (40.7%) and vape pens (22.6%), according to the report. Infused variations of prerolls are contributing to the product segment's market growth, and dominated the product category in the U.S., making up 41.5% of overall preroll sales for the first six months of 2022. While infused prerolls made up a smaller percentage of overall product sales in Canada at 11.2%, that number is up from 0.1% in 2021, according to the Headset report. According to BDSA's retail sales tracking data, infused prerolls made up 4% of total cannabis sales and 35% percent of total preroll sales in Q4 2022 (up 6% from Q4 2021), across BDSA's tracked markets in the U.S . As infused prerolls continue to increase in popularity, BDSA deems it a market opportunity for operators, especially amidst the market downturn. One company that has established an early foothold in the preroll sector is  Presidential Cannabis Co ., a California-based cannabis company that launched in 2012. Presidential is currently in over 400 retail stores in California and was recently named the fourth-largest preroll brand in California, according to BDSA data. The company also recently launched in Nevada and Oklahoma, and is hoping to be on dispensary shelves in Michigan and Arizona by 4/20. © Courtesy of Presidential Smith Cannabis Business Times spoke with Everett Smith, co-founder and CEO of Presidential, to discuss how the company has grown to be one of the top five infused preroll brands in an oversaturated market like California, and how it keeps up with the trends and the evolution of the market sector. From the Start Before starting his career in the cannabis space, Smith played professional basketball in Europe. After facing multiple injuries, he decided to retire from the sport and move on to his next adventure. He landed a job working for an event agency, and through working events, Smith met a man who piqued his interest in working in the cannabis industry. After a couple of months, Smith moved to California and was introduced to his now business partner, John Zapp, and they launched Presidential in 2012. Since then, infused prerolls have become a mainstream product and the types of cannabis concentrates have expanded, Smith says. "You got your rosins, your resins, your distillates, your THCA, all kinds of different concentrates," he says. "I would say many companies are more focused on it now. They realize that they have products that they don't sell or can't sell, or they have an overhaul that they can put into prerolls and infuse them and then get some value for them." As the market expands, Smith says he turns to data to identify market trends and consumer behaviors, and that Presidential receives quarterly reports from its retailers and also looks to data companies like BDSA, LeafLink, and others. "Just using different data sources and then understanding what people like," he says. "I think one of the differences between our company and some of the other companies is that I feel like me, and some of the people that work for us, we are our target consumer, we are the people. And what we all want is high-quality products at an affordable price. And that's what most people want. They want a product that's packaged pretty and nice, speaks to them, and then they want a quality product, and they want it to be affordable, … and high in THC. They want to have value. [We] knock all those boxes." Presidential also seeks partnerships with craft growers in each state it's in to locally source products and reach new audiences. Building Partnerships "We're really big in quality," Smith says. "I think that's what makes our product better than other Moon Rocks on the [market]. It's not just a second thought; this is what we do. We search out some of the best craft flower we can [find], and then turn that into Moon Rocks." And the company has been successful in seeking out these grower partnerships. "In California, we partner with Ball Family Farms , we partner with [Grown] Rogue , we partner with THC Design , we partner with Moxie ," he says. "In Nevada, we got a company called Virtue that we partner with. In Oklahoma, … we're just locally sourcing, but we haven't found an indoor craft partner yet. So we're still looking there.” Smith says many of these partnerships had formed through existing relationships and word of mouth, especially in California, where the company operated before the market turned to adult use. "Going after people like Ball Family Farms, [that] took me two years," he says. "I went to them for two years to finally get them to where we're at now, where I'm buying the raw goods, using them in my products, and then doing collaborations with their products as well." Standing Out From the Crowd One of the main factors that has led to the company's exponential growth and position as a top five infused preroll brand in an oversaturated market like California is "simplicity," Smith says. © Courtesy of Presidential "My favorite quote is 'Simplicity is the key to brilliance,'" he says. "Keeping it simple and showing up every day. Me and my partner, I think we make a great combination. … He's 30 years older than I am. … I push the revenue, do the collaborations, find people to expand with, and he makes sure … we're profitable. He does a lot of the manufacturing to make sure the product gets out, but he also makes sure that we're profitable along the way and that we're not overspending in certain areas. … So I would say just the fundamentals of business, keeping everything simple." Smith says the company also carefully spends its marketing dollars and looks to invest in efforts that correlate to direct sales. For example, instead of spending money on things like billboards or social media campaigns, Presidential has found that guerrilla marketing, which often focuses on personal interactions, works best in generating sales. The company mainly targets consumers within dispensaries through its brand ambassadors. "When you come in [to a dispensary], we're hitting you over the head with the brand, giving out free products, doing promos, making sure the budtenders like our products, getting feedback from them, giving them samples," he says. "What we've found is that what directly correlates to sales for us is having people in those stores every day, brand ambassadors, [and] making sure we are top of mind with the budtenders. Just things like that." In addition, the company engages with consumers directly by attending trade shows and hosting events at its  Presidential Suite , a speakeasy-style lounge located within Esco's Pizza + Lounge in Hollywood, Calif., which Smith also owns. © Courtesy of Presidential Presidential Suite at Escos “Budtenders are the gateway to selling your product to the consumer, but they are also probably your biggest or most priority as a consumer,” he says. “You want them smoking your products. So we do a lot of budtender events at the Presidential Suite. … If we’re dropping new products, we’ll do product launches with all the budtenders and get their feedback. If we want to drop a new product, we’ll send out surveys, or we’ll have them come to the Presidential Suite, do surveys, get information, so we can come back and curate quality products [for] the consumers.” What’s to Come In 2023, Presidential will work to get a foothold in each new market it’s in while continuing to expand in California, Smith says. “Our goal this year is to really, for one, grow California. We’ve grown every year since recreational hit. … We don’t want to forget about California; that’s our main hub,” he says. “[California] allows us to do all the other expanding. … So grow California, and then get a foothold of the market in our new states. Each state has its own different hazards and speed bumps." Smith says the company doesn't plan to expand to any additional states this year outside of Nevada, Oklahoma, Michigan and Arizona, but will start opening contract negotiations toward the end of this year for 2024, with sights set on Oregon and some Midwest and East Coast states such as Illinois, Missouri, New York and New Jersey. Editor's note: Join us this year at the Paris Las Vegas Hotel & Casino for Cannabis Conference , the leading education and expo event for plant-touching businesses. Chris Ball, owner and CEO of Ball Family Farms, is on the Cannabis Conference 2023  Advisory Board . Latest from Cannabis Business Times