Attachment_III_Real_California_Cannabis_Campaign_Overview.pdf

Real California Cannabis Campaign Overview 1

Real California Cannabis Campaign Overview Prepared for: Department of Cannabis Control Prepared on: September 2023

Real California Cannabis Campaign Overview 2

Table of Contents

About FHA Objectives Contract overview How we got here Core research findings & strategic approach Audiences Campaign brand & core messaging What’s next & tactical approach Metrics for measuring success

Real California Cannabis Campaign Overview 02

Real California Cannabis Campaign Overview 303

About Fiona Hutton & Associates

FHA is among California’s leading public affairs and full-service communications firms. We specialize in statewide, high-profile education, outreach and advocacy campaigns where the stakes are high and the challenges are steep.

FHA combines unparalleled knowledge of California’s cannabis industry and players with a keen understanding of the regulatory and political landscapes. Our unique background makes us an ideal partner to lead a targeted outreach and education campaign to reach all cannabis consumers in the state.

Boots on the Ground Experience Combatting the Illegal Market

Extensive Experience in California’s Regulated Cannabis Industry

Strong Partnerships Across the State

Successful History Implementing Award-Winning Awareness Campaigns

Custom-Built Team Exclusively Tailored for DCC

Real California Cannabis Campaign Overview 404

The FHA Team

Swell partners with organizations and brands to create people-based movements through creative content, brand development, influencer marketing and strategic paid media planning. Swell are strategic consultants who act as media planners and buyers, artists who prefer action, and people who believe we are here to serve movements, not just clients.

FM3 has extensive experience conducting research related to cannabis and Californians’ attitudes toward it. FM3’s internal library of research represents a broad range of perspectives that will improve research instruments, analysis of qualitative and quantitative research findings and strategic recommendations.

J Comm, Inc. brings decades of Emmy-winning media, film and video production experience. J Comm unifies cinematic visuals with personal, powerful storytelling to create memorable narratives that drive stakeholder education, engagement and action.

InterEcho does not simply translate language, but rather examines every aspect of the content through a cultural relevancy lens to ensure it will resonate with diverse audiences.

InterEcho does not just translate. InterEcho authenticates, transcreates and reproduces content that is culturally relevant and highly effective…in over 60 languages.

Real California Cannabis Campaign Overview 5

Our Objectives Primary Objective Drive existing cannabis consumers to purchase products solely from licensed cannabis retailers.

Secondary Objectives Increase DCC name recognition among Californians.

Position DCC as the leading, trusted authority.

Educate key opinion formers about the value of supporting the legal market and the dangers of the illegal market.

01.

02.

03.

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Contract Overview Research & Insights

Ad Development & Management

Outreach

Strategy & Campaign Development

Technology & Innovation

Video Production & Photography

Earned Media

Owned Content Creation

Influencer Campaign Management

Campaign Management, Oversight & Reporting

Print Production

Brand Development

Translation & Transcreation

15%

12%

12%

12%

08%

08%

07%

07%

07%

05%

05%

03%

02%

Total Nonpaid Budget $3,000,000 Total Paid Budget $2,000,000

Influencer Marketing

Consumer Advertising Campaign

44%

50%

6%

Key Opinion Former Advertising Campaign

Phase One Launch Phase Two Launch

October JanuaryApril 2023

Strategy Research & Polling

Brand Development

Message Development

June 2024

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Research, Strategy & Concept Design Research

• Conduct Immersion Meetings

• Conduct Licensee Interviews

• Conduct SME Debrief Interviews

• Analyze Third-Party Polling & Industry Reports

• Develop Consumer Research Strategy

• Develop Research Questionnaires & Scripts

• Conduct 10 Pre-Campaign Baseline Focus Groups with 100 Californians (English & Spanish)

• Conduct Pre-Campaign Baseline Survey of more than 1,000 Californians (English & Spanish)

• Assess Research Findings + DCC Debrief

• Conduct Media & Legislative Landscape Analysis

May 2023 – October 2023

Strategy

How We Got Here

• Develop Consumer Ad Targeting Strategy

• Develop Campaign Strategic Plan

• Develop Paid Advertising Plan

• Develop On-Ecosystem Microsite

• Draft Message Platforms (Key Opinion Formers + Consumers)

• Develop Influencer Database

• Develop Key Opinion Former Database

• Develop Licensee Steering Committee Strategy

Concept Design

• Host Brand Workshop Series

• Develop Multiple Brand ID Options

• Collaborate with DCC to Select Brand ID

• Develop Full Brand ID

• Draft Brand Usage Guidelines

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Perceived Lack Of Problem Lead with Education

85 percent of Californians in impermissible areas incorrectly believe it is legal or don’t know if it is legal in their area.

“...it doesn’t affect me. People have the right to buy [cannabis] however they want, legally or illegally – it's their money.” - Los Angeles Female

“All the arguments in the world aren’t going to change the fact that it doesn’t really matter to me what other people do unless they’re hurting somebody. I don’t care where other people get their weed.” - San Francisco Male

“…the more I think about it, it just seems impossible to be an illegal dispensary. Basically, you’re just saying a guy is a street dealer.” - Irvine Male

Before we can expect consumers to take action to discover whether they are in fact purchasing cannabis from a licensed retailer, we need to motivate them to do so by educating them about the benefits of legal cannabis and the detriments of illegal cannabis. By developing resources that extoll the benefits of legal, tested cannabis that is grown equitably, responsibly, and is fit for consumption – as compared to illegal cannabis that is rife with issues ranging from health to crime to labor violations – we can help to compel consumers to be part of the solution. We plan to develop those resources from October through December based on what the research tells us are the most impactful messages for different consumer audiences.

Our research shows Californians do not view the state’s illegal cannabis market as a problem that needs a solution. Many focus group participants express confusion at the mere idea of illegal cannabis, assume the passage of Prop. 64 made all cannabis sales legal, or do not believe that illegal cannabis sales impact them or their communities.

85%

Strategic ApproachCore Research Findings

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86% say it is important to purchase cannabis legally

“If I see the establishment, I see it’s open and it’s in the public, I would imagine that it’s legal. They have to have their regulations.” – Fresno Male

“I would think dispensaries should be legal because they’re just sitting there.

How can they not be?” – Irvine Male

“I didn’t know there were illegal dispensaries.” – San Francisco Female

A significant number of focus group participants said that it needs to be much easier for cannabis consumers to identify and verify licensed retailers before driving to the store and making a purchase. Consumers want a clear and direct way to identify legal stores and products. The research shows that consumers are both willing to purchase legal cannabis and believe they already are even when they are not. After establishing the difference between legal and illegal retailers through education, we need to arm consumers with the tools they need to shop legal:

• Develop new web-based, consumer-friendly retail locator

• Create opt-in SMS legal locator tool

• Update DCC QR codes to include geolocated anchors/landing pages

While we know illegal sales make up more than half of cannabis sales in California, an overwhelming majority of Californians believe it is important to purchase cannabis legally.

While there are several reasons for this discrepancy, our research shows a lack of consumer awareness is likely the largest culprit – consumers don’t know that illegal retailers exist, nor do they know how to distinguish an illegal shop from a legal one.

88%

88% say they would personally purchase cannabis from a licensed dispensary.

86%

Disconnect Between Consumer Beliefs & Behaviors

Make it Easier to Shop Legal

Strategic ApproachCore Research Findings

Real California Cannabis Campaign Overview 10

Universal Appeal Celebrate California’s Diversity

Our campaign must be inviting, inclusive and appealing to all Californians. We will develop photography and videography that is representative of California and of the state’s diverse legal cannabis market. Our campaign content will be translated and transcreated to reflect the most common languages used in each target county/region.

While messaging around DCC’s social equity programs may not be a key driver in moving consumers to the legal market, it will be a very important message to get right for some key – and potentially skeptical – audiences. We will tap equity licensees to participate in the campaign as spokespeople and share their stories, using faces, anecdotes and facts to celebrate those who are the future of California’s world-renowned cannabis industry.

Our research shows cannabis consumers are as diverse as California – there are no dramatic demographic differences in those who have and have not used cannabis, nor are there significant variations by region, income level, education level or those with children.

This universal harmony was found throughout our focus group and survey findings as it relates to message testing as well.

• Messages about toxins in illegal products, health & wellness and testing were universally the most convincing reasons to shop legal.

• Messages about social equity and tax revenue were universally less convincing reasons to shop legal.

Strategic ApproachCore Research Findings

0% 10%

20% 30% 40% 50% 60% 70%

Cannabis Consumers by Gender, Age & Race/Ethnicity

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90% of cannabis consumers aged 21+ say they consume for health & wellness reasons.

Consumers who prioritize their health and wellness are more inclined to prioritize toxin-free and rigorously tested products over cost when making purchasing decisions. These consumers will be easier to move to the legal market than consumers who strictly prioritize cost – they are willing to pay more for products that are natural, clean, designed to improve their well-being and tested/approved by influencers. We want to be clear – the phrase “health and wellness” will not be part of our campaign message, rather it is a targeting strategy we will employ to reach and move these consumers. Our campaign will prioritize reaching consumers who use cannabis for health and wellness purposes by:

• Utilizing medical professionals, health and wellness influencers and patients as campaign ambassadors and/or spokespeople.

• Prioritizing messaging about the legal industry’s rigorous testing process compared to the lack of testing conducted by illegal operators.

• Leveraging digital targeting platforms/technologies to put our ads in front of consumers who prioritize health and wellness.

• Utilizing phrases that appeal to health and wellness consumers, including trustworthy, high-quality, accurate dosage, predictable, toxin-free, California’s own, ethically-sourced and environmentally-friendly.

While demographics are helpful, targeting cannabis consumers based on their values will be more impactful. Our statewide survey shows Californians identify health & wellness purposes as among the most common reasons why people use cannabis, especially for pain management (78%), to relax or reduce stress (77%), medical treatment (75%), anxiety and mental health issues (71%), and sleep aid (69%).

90%+

Cannabis Consumption Drivers Targeting Health + Wellness Consumers

Strategic ApproachCore Research Findings

33% of California consumers say they use cannabis for “medical purposes.”33.3%

Real California Cannabis Campaign Overview

Tier 1: High # of Consumers x Sufficient Retail Access

Tier 2: High # of Consumers x Diminishing Retail Access

Tier 3: Low # of Consumers x Sufficient Retail Access

Priority Counties

Target Advertising Dollars to Consumers with Access

Core Research Findings & Strategic Approach

We’ve extensively studied all available data on the makeup of California’s current cannabis market. To ensure our paid advertising dollars deliver maximum value, we are proposing to spend the vast majority of our advertising budget in jurisdictions that have the greatest potential to shift consumer purchasing behavior away from the illegal market. Our priority counties have three key factors in common: a large number of consumers, a large illegal market and sufficient access to licensed retailers. These three common factors allow for the greatest potential shift from the illegal to the legal market. Within each county, we will further drill down on specific cities to target based on permissibility/access. Our 21 priority counties account for:

87% of estimated CA cannabis consumers

90%

90% of estimated illegal consumers

87% 77%

77% of licensed retail storefronts

Real California Cannabis Campaign Overview 13

Strategic Approach Summary

• Lead with defining the problem by externalizing tangible data about the existence, scale and risks posed by the illegal market.

• Focus on targeting easiest to move consumers, including:

• Consumers who have convenient access to licensed dispensaries.

• Consumers who are unknowingly shopping illegally.

• Consumers who prioritize their health and wellness, making them more inclined to prioritize toxin-free and rigorously tested products over cost when making purchasing decisions.

• Engage and activate broad, impactful and credible messengers to create a unified, collaborative approach and narrative.

• Make it easier to shop legal by providing consumers with tools and resources to help them verify that a retailer is legal before going to the store and making a purchase.

• Celebrate California’s diversity throughout all aspects of the campaign – imagery, translation, messengers, etc.

• Prepare state and local leaders to be part of the solution by arming them with information to make informed decisions and educate their constituents.

Core Research Findings & Strategic Approach

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Our Audiences Cannabis Consumers Aged 21+, Emphasizing Those Who:

• Have convenient access to licensed dispensaries

• Unknowingly shop illegally

• Prioritize their health and wellness

Key Opinion Formers – Cannabis Industry Leaders & Influencers

• Cannabis business licensees + staff

• Cannabis industry thought leaders + trade associations

• Cannabis industry news media

• Local business organizations, leaders + staff

• Doctors and nurses

• Public health advocates

Key Opinion Formers – State & Local Policy Leaders

• State elected officials + staff

• State regulators + departments

• California Department of Public Health

• California Attorney General

• Local elected officials + staff

• Local public health officials

• State/local policy-focused news + media

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Our Brand: Real California Cannabis What is Real?

"Real" is our stamp of approval. Real California Cannabis is for consumers, reassuring people they are buying regulated and rigorously tested cannabis products from licensed retailers, manufacturers and growers who adhere to the standards set out by DCC. Our campaign will make Real California Cannabis synonymous with regulated, licensed and tested – it is the symbol of authority on what’s licensed and what’s not.

Why Real?

• It's a term that inspires trust and confidence – it’s not silly or hyperbolic.

• It’s a term that is genuine and authentic – anything that’s not real is fake.

• It's a term that's approachable – it's more colloquial than its alternatives.

• It’s a term that is universal and timeless – it’s not up for interpretation at any age.

How we got to Real:

• Series of ten brand workshops, brainstorms, and working sessions.

• Audit of existing cannabis companies, campaigns, and industry terms to ensure our brand is unique.

• Landscape research for terms/phrases that have proven to inspire trust and confidence in consumers.

• Culled through over 25 options to determine our top 7. From there, we collaborated with DCC leadership to choose the top three before picking "Real California Cannabis".

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Brand Logo

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Brand Logo

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Branding in Action

Sample content. Not approved for external use.

Real California Cannabis Campaign Overview 19

Core Message Framework

• [TOXINS] Illegal cannabis farms are known to use banned neurotoxins, nerve agents and pesticides that could end up in the final product.

• [PUBLIC SAFETY] Illegal cannabis businesses are associated with gang activity, human trafficking, illegal guns, dangerous substances, labor abuses and violent crime, and buying illegal cannabis supports criminal activity that harms communities.

• [LABOR] Workers at illegal cannabis farms are subjected to wage theft, physical and sexual abuse, violence, hazardous conditions and even death.

Our research has provided valuable insights into the messages that will be most successful in our campaign. Below is a high-level overview of the core message themes.

The Problem

• [HEALTH + WELLNESS] Medical experts and patients say cannabis can be a helpful tool to manage a variety of health-related issues. Purchasing regulated, tested products from a licensed dispensary is the best way to ensure consumers can receive these health and wellness benefits.

• [TESTING] To protect health and safety, cannabis sold at state-licensed dispensaries is thoroughly and independently tested to prevent consumers from being exposed to toxins and hazardous contaminants.

• [HOME GROWN] Purchasing cannabis from licensed dispensaries supports farmers and entrepreneurs who are building California’s home-grown cannabis industry that benefits our state.

The Solution

• [ILLEGAL DISPENSARIES] Illegal operators don’t always appear how you might imagine – they can appear to be professional storefronts that check IDs and even include fake taxes on receipts.

• [BEFORE YOU GO] DCC’s licensee lookup is the only reliable source for finding Real California Cannabis retailers near you.

• [IN STORE] All Real California Cannabis retailers must have a license number posted visibly on the storefront.

How to Verify

Health & Wellness

Testing

Public Safety

Toxins

Home Grown

Labor

Percentage of Californians who find message(s) convincing:

78%

75%

75%

73%

72%

67%

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Phase 01: Education Key Opinion Former Education

• Develop Branded Campaign Website with Consumer Retail Lookup

• Develop Opt-in SMS Legal Retail Locator Functionality

• Develop Retailer Web Badges

• Develop Geo-anchored QR Codes & Associated Landing Pages

• Design Legal Retailer QR Code Plaques

• Produce Giveaway Wallet Cards with Licensee Lookup QR Code

• Develop Real California Cannabis 101 Fact Sheet

• Recruit and Prepare Campaign Ambassadors and Spokespeople

• CA Surgeon General, Attorney General, Licensees, etc.

• Develop Decentralized Social Media Program

• Prioritize influencer marketing, boost conversions to reinforce impact

• Shoot & Produce Video Series + Photography

• PSA Style, Health & Wellness, California-identity

• Establish Licensee Steering Committee

• Launch On-Ecosystem Microsite

• Develop Briefing Program

• Develop Editorial Board Briefing Program

• Outreach & Schedule Editorial Board Briefings

• Planning for Thought Leader Roundtable

October 2023 – December 2023

Consumer Education

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Phase 02: Activation Campaign Launch

• Rollout New Website & Legal Lookup Tools

January 2024 – June

Launch Statewide Paid Media Program

• Launch Six-week Ad Blitz

• Shift Ad Program to Sustainment Mode from late February to June

• Manage & Shift Campaign Placements Based on Weekly Performance

Metrics

• Launch Paid Influencer Program

• Manage & Shift Paid Influencer Partnerships Based on Performance

• Utilize Influencer Content for Paid Placements, DCC Social & Web

Content

Earned Media Program Implementation

• Facilitate Thought Leader Roundtable

• Conduct Editorial Board Briefings

• Reporter Pitching and Briefings Around Milestone Media Moments

Outreach

• Conduct Key Opinion Former Organization Briefings

• Continued E-Newsletter Program

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Influencer Marketing To drive awareness of legal cannabis in California, we will recruit real California influencers who resonate with target audience segments.

Through their personal narrative, we aim to gain their validation of the legal cannabis marketplace across various social media platforms. Our primary focus will be on micro-influencers on TikTok, Instagram, Facebook, and YouTube, with fewer than 20k followers because they have niche audiences, cultivate the most loyal followings and typically generate higher engagement than mid-tier or macro-influencers.

We will also maintain flexibility to allocate resources and budget towards mid-tier (with 50k - 100k followers) and macro-influencers (with 100k - 500k followers) if our campaign strategy necessitates it. Furthermore, we plan to synergistically integrate certain influencer content into our paid media strategy, precisely targeting cannabis users. This comprehensive approach will ensure that our message is not only amplified through authentic voices but also strategically positioned to resonate with the intended audiences.

Content Range

Minimum Aggregate Followers

Languages

Platforms

230 - 250 micro-influencer content pieces

1,800,000

English, Spanish

TikTok, Instagram, Facebook and YouTube

Approximately 44 percent of total paid media budget will be allocated for influencer marketing

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Paid Media Breakdown – Cannabis Consumers Social Media 25 Percent of Cannabis Consumers Budget

Search & Display 10 Percent of Cannabis Consumers Budget

Video Streaming 19 Percent of Cannabis Consumers Budget

Radio & Podcast 15 Percent of Cannabis Consumers Budget

Social media platforms offer in-depth targeting so we can reach our audiences with varied messaging depending on their interests.

These platforms will likely drive the highest number of conversions.

• Facebook

• Instagram

• Reddit

Search is vital to capturing the ready-to-buy audience; these are people actively seeking out cannabis. Display ads are a great awareness tool that we can then use to retarget those audiences on other platforms.

• Google Search

• Google Display

YouTube and Twitch are two of the most popular sites for of-age Gen Z’ers and Millennials. On YouTube, we’ll use pre-roll, whereas on Twitch we’ll look at gamer partnerships.

• Twitch

• YouTube

Radio is still the most popular form of media. And NPR listeners are more likely to use cannabis, capturing several of our target audiences.

• Capradio

• Broadcast Radio Throughout The State

• NPR Geo-targeted Podcast Ads

We need to meet people where they are searching for a dispensary or delivery service. If the platform has only legal retailers, we recommend keeping users on their owned platforms for best results, and we could create co-branded opportunities to gain new users for those platforms.

• Cannabis Dispensary Search Apps (Leafly, iheartjane, Dutchie, Eaze, Weedmaps if they comply)

Digital Platforms 09 Percent of Cannabis Consumers Budget

OOH is a great awareness tool and will really make audiences feel like they’re seeing the campaign everywhere. We don’t recommend wheat pasting because it’s expensive, we can’t control how long it stays up or stays clean, and the ROI tends to be low.

• Billboards (LA, SD, Palm Springs, Sacramento)

• Geotargeted Health & Wellness Stores (ex. yoga studios)

Out of Home 08 Percent of Cannabis Consumers Budget

Over-the-top TV and connected TV are great ways to reach audiences in a targeted way and offer viewers a way to click or scan through to take an action.

• Hulu

• Politico

OTT/CTV

08 Percent of Cannabis Consumers Budget

*Please note percentages will not add up to 100% because there is contingency budget

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Metrics for Measuring Success Engagement, Opinion + Awareness

Capstone Polling & Ad Performance Metrics:

• Conversions (to be defined but may include website visits, text/email signups, active searches for legal retailers, etc.)

• Performance metrics generated from QR codes/URL via OOH, CTV, Podcasts

• Airtime (radio) to URL visits or texts

• All digital channels (Meta, Reddit, Google, Spotify, etc.) have built-in attribution through Urchin Tracking Module links.

• Movement in public opinion/sentiment through social listening via Hootsuite, influencer marketing tracking system & capstone polling

• Market saturation: reach + frequency

• Engagement

Shifting consumer behavior will take years. This campaign is designed to show proof of concept and to establish the foundation for an education and outreach campaign that will need to live on for years to solidify any resulting shifts in consumer behavior. As such, we are proposing to assess both the campaign’s performance and market performance as indicators of consumer purchasing behavior.

Using capstone polling and ad performance metrics to assess any shift in consumer sentiments/attitudes toward buying legal and adjust our campaign for greater impact with consumers.

CDTFA Quarterly Reports:

• Shifts in tax revenue over time

Market Performance Assessment Using the CDTFA quarterly reports to track sales metrics in order to estimate shifts in consumer purchasing behavior.

Campaign Performance Assessment

DCC Metrc Data Dashboard:

• Track and trace real-time sales data