Marijuana: The next luxury frontier?

21 Mar 2017 , 5:00am

Luxury entrepreneurs are hoping to propel America’s burgeoning market for marijuana products and paraphernalia to new highs.

As the state-by-state plod of legalisation efforts has gained traction in the United States over the last few years, investors and pot aficionados alike have now dared to believe what once seemed impossible – that federal legalisation of marijuana products may soon be on the horizon. On the surface, the arrival of a legal and regulated marijuana industry in the United States stands as a challenge to the sentiment that, with the right emphasis on quality, consumer experience and brand development, anything that can be made can be made luxurious. Once synonymous with the ‘hippie’ movement, pot has hardly built its reputation in popular culture by purporting to be a ‘high end’ drug (pardon the pun).

The aesthetics of getting high

However, in defiance of the skeptics, luxury brand owners and entrepreneurs have already set their creativity to creating avenues into this burgeoning industry – with impressive results. For some, such as fashion designers, the fascination with pot has always been purely aesthetic, with several big-names including Alexander Wang, Jeremy Scott and Baja East all featuring cannabis-related prints and motifs in recent collections. Others, however, have decided to rise to the challenge of investing in the development and marketing of high-end products and accessories for marijuana smokers, despite the business risks associated with inconsistent state laws and infantile regulation.

So how does a luxury brand banish the image of a shriveled joint or a stained, homemade bong from the mind of the consumer, and introduce a bit of glamour into marijuana? The possibilities, it seems, are endless. Accessories appear to be the most obvious first domain for a luxury presence, and products have already begun to flood the market. A ‘Top 10’ list recently published by Herb.co offers just a small glimpse of the range of items already on the market for luxury-minded ‘cannaseurs’ – among them, ceramic desktop ‘apple pipes’ that could easily be mistaken for (or used as) a paperweight, a purple geometric ornament with the appearance of a rough-cut jewel which conceals a lighter and ashtray inside, and a kitchen appliance that while at first glance looks like a high-end espresso maker, is actually used to infuse cannabis into butter and oil. It appears that a dual emphasis on fashion and discretion is the unifying approach of efforts to market pot paraphernalia to a more discerning clientele.

From pipes to pot

However, the emerging world of luxury marijuana hasn’t limited itself to accessories – it is beginning to extend to the drug itself. New luxury weed brand Beboe has launched a line of THC/CBD-infused pastilles which come in chic and, again, discreet packaging that retail for about USD$25. According to Beboe founder Clement Kwan, the decision to launch into luxury marijuana was as much about furthering legalisation efforts in the United States as it was about capitalising on them. He told Harper’s Bazaar: ‘We hope to further along the end of prohibition by building sophisticated products and brands to attract a more sophisticated consumer. This is what we hope will be the catalyst in forging into this new frontier.’

‘Like a fine wine’

In a recent interview with Business of Fashion, marijuana branding expert and Beverly Hills Marijuana Club founder Cheryl Shuman was emphatic that luxury cannabis has the potential to build status and brand loyalty with consumers: ‘This is like fine wine, fine champagnes, fine cigars… It’s becoming more chic to talk about it. Like being part of a tribe, if you will.’  Her company sells its high-end cannabis for around $700 an ounce, which compares to an average ‘street price’ of around $200-250 for an ounce of medium- to high-quality bud in Los Angeles.

Most interesting, however, is that consumers’ newfound (or perhaps just newly discovered) interest in luxury weed comes at a time where other luxury consumables – such as alcohol – are facing a substantial decline in sales and a turning tide of public opinion against the once-glamorous culture of intoxication. Euromonitor senior analyst Spiros Malandrakis told BoF: ‘The growth trajectory for alcoholic drinks in the west has reached its finite limits and has been declining for a while now… in terms of volume, if you look at margins across the west, cannabis could provide an escape route for multinational [conglomerates].’ While the total volume of alcohol consumed worldwide dropped for the first time in more than 15 years in 2016, legal marijuana sales are expected to more than triple from $7.1bn in 2016 to $22bn by 2020 in the US alone, according to recent research from ArcView Market Research.

Looking forward

The growth potential for pot appears boundless, so long as legislative and regulatory efforts manage to catch up with the flourishing industry. A recent Gallup poll found that 60 per cent of Americans now support the legalisation of marijuana, up from 36 per cent 10 years ago and just 12 per cent in 1969, when criminalisation and stigmatisation efforts in the US were at their most vehement. Many luxury entrepreneurs have already chosen to hedge their bets that the nationwide trend towards legalisation will keep building momentum. If they’re right, then we could have a new luxury heavy-hitter on our hands.

Sources: Business of Fashion; Forbes; Herb.com; Harper’s Bazaar