Budding Ad Sales for Pot Publisher

Darren Roberts knows a lot about the publishing business. He also knows how to publish magazines on topics outside the mainstream, such as the adult entertainment industry – and now the cannabis industry. A year ago, Roberts, chief executive of Cann Media Group LLC in Woodland Hills, debuted Mg magazine, a national monthly publication aimed at the owners of dispensaries, growing operations and other businesses associated with marijuana. A slick 80-plus page publication, Mg looks to not only inform and educate business owners but has higher aspirations of changing how the cannabis industry and those working in it are viewed by themselves as well as by the general public. “We perceive it as professionals, as creative individuals,” said the 47-year-old Roberts, referring to his audience. “We don’t need to have pot plants all over the magazine for an industry where we all deal in that.” Cann Media and Mg are part of a booming industry in the United States. The fourth edition of the State of Legal Marijuana Markets study prepared by New Frontier, a cannabis analysis firm in Washington, D.C., and San Francisco’s ArcView Group, estimated that this year the combined medical and adult-use sales of the drug in the United States at about $7.1 billion. Sales are expected to grow to $23 billion by 2020. California is one of 11 states with voter initiatives on the November ballot to legalize marijuana for either recreational or medicinal use. The state has allowed medicinal use of pot since 1996. Despite all this activity one fact remains – marijuana is still illegal and considered to be a controlled substance by the federal government, which puts it into the same category as cocaine and heroin. Congress, however, has taken steps to keep the Drug Enforcement Agency from enforcing the laws in states where cannabis use is allowed. Advertising model The business model for the magazine is based on advertising, which includes lighting equipment manufacturers, cannabis edible and oil companies, vape pen distributors and legal services and consulting. Ad rates for a full page start at $2,200 and go to $5,000 for premium positioning. Some 16,000 copies are distributed for free to a qualified readership of business owners vetted by Roberts. Paid subscribers number about 500 and newsstands and bookstores such as Barnes & Noble add in another few thousand copies. Roberts expects that Cann Media, which operates from a series of offices and cubicles on the second floor of a two-story office building in the Warner Center area, will be profitable by the third quarter of next year. But it’s not the numbers that interest Roberts as much as who is reading the magazine each month. Advertisers will change their perception once they know who the readers are, he added. If he were selling a growing machine and wanted to reach individual buyers, Roberts said that he would advertise in a consumer publication, such as High Times, which has been publishing for more than 40 years. In contrast, Mg targets industrial buyers. “I’m the magazine you want to go with if you want to sell 1,000 units to one store who is then going to sell them. Totally two different models. That is an education that most (advertisers) need to go through,” he said. Neal Vitale, a veteran of the business-to-business publishing world and an advisor to Mg, said that in 2016 it is counter-intuitive to start a print magazine. By doing that, Roberts has created a distinctive position for Cann Media Group in the marijuana market. “I don’t think anybody else has gone after it in the same way and focus on the retailer,” said Vitale, the former chief executive of 1105 Media, a Chatsworth business-to-business media company serving the education, public sector, security and public health markets. For Roberts, the reason was simple for why he wanted to do a print magazine – it’s been the format he has worked with the longest. “I was drawn to print, design, paper and it’s turned into my career,” Roberts said. Aaron Justis, president of Buds & Roses Collective in Studio City, is both a reader of and a subject in Mg, having appeared on the cover of the January issue. He called the magazine refreshing in that the ads were relevant to him as a dispensary owner. “It is good resource in an industry where you cannot pick up a catalogue and order what you want,” Justis said. The magazine, however, is just the start of what Roberts wants to do in the cannabis industry. Cann Media will have multi-platform distribution for content through a website, newsletters and white sheets. The managing editor of the magazine will pick the content and stories best suited for print, Roberts said. Additionally, webinars, conventions and educational seminars will figure in the future plans of the company. Personality stories The magazine’s name comes from the abbreviation for milligram – mg – the measurement used for the THC (a psychoactive chemical) or cannabidiol (a non-psychoactive chemical known as CBD) found in marijuana products. But the industry has taken upon itself to create other translations for the abbreviation, Roberts said, such as Master Grower, Marijuana Gardener or Marijuana Grower. “We tend to let them all be right,” he added. Competing media companies include Cannabis Business Times, in Valley View, Ohio; CFN Media Group in Seattle; and Marijuana Business Association in Bothell, Wash., which has five digital publications for the industry. A combination of contract employees, freelance writers and photographers put together each issue of Mg. The covers are not heavy with marijuana imagery, following a credo of Roberts that the publication is not about the product but the people behind the product. That explains stories on folks such as Michael Ray of Bloom Farms, a Northern California medical marijuana company that donates proceeds from its products to a food bank; and Tracy Ryan, whose daughter Sophie took cannabis oil to fight glioma, a type of tumor. “These are the stories that people need to know,” Roberts said. On the graphic design side, Roberts thinks he has sacrificed “a few bucks” to make Mg look the way he wants and to be a point of pride for the cannabis industry. “If they have to show somebody what it is they do for a living, I don’t want them to be shy about giving out our product,” Roberts said. Justis, the dispensary owner, said Roberts has hit the mark. He was happy with the cover and interview the magazine did with him early this year, with the title “Zen & The Art of Aaron Justis” an accurate summing up of how he lives his life by not getting too excited when things go well or go bad. “I try to look at the overall big picture,” he said. “I think that is an attitude you really have to have in this industry and (the writer) captured that from hearing my story.” Trade experience Roberts got into publishing at a young age. While in high school in the Los Angeles area he had a printing press that he used to make business cards and stationery. At 21 years old, he started a printing company he ran for six years. Roberts has also founded and operated a marketing company, and an event company for the action sports industry. The experience most useful for serving the cannabis industry, however, came from the 14 years Roberts was with AVN Media Network, publisher of magazines for the adult entertainment industry as well as creator of trade shows and annual awards shows in Las Vegas. He became chief executive in 1996. There are similarities between the two industries, Roberts said, in that both adult and marijuana have regulations that are outside the control of individual businesses. Also, both have perception challenges. But having been through those challenges in the adult industry, where he saw friends get arrested on obscenity charges or not able to hire an accountant because of the stigma of porn, makes it easier to relate to business people in the cannabis industry. They are experiencing for the first time what Roberts said he went through years ago. “Those were hard lessons to learn,” he added. “You learn a lot about people and get lessons on humanity.” Changing the perception of the adult industry was a transition that took years. Just as he does with cannabis business owners, so Roberts saw adult business owners as professionals needing guidance and education on such matters as marketing and publicizing their brand. It wasn’t a matter of throwing the adult products into the face of the public, he said. “There is something to being creative,” he added. “This industry (marijuana), for me, is the same challenge.” After he and business partner Paul Fishbein sold AVN in 2010, Roberts recalled that he had no interest in starting another publication. But then Colorado and Washington State legalized recreational use of marijuana in 2012, and Oregon, Alaska and the District of Columbia soon followed. That was when Roberts realized that what he does best would fit for the cannabis industry – providing retailers with the tools to efficiently run their businesses. “I did it in adult, I did it in the action sports industry,” Roberts said. “Retailers drive the market.” Vitale described Roberts as someone who knows what he wants and then goes after it. Cann Media is a startup but one that is sensibly run without spending lavish amounts of money. Roberts said the magazine was launched for less than $1 million. “I have been impressed what he’s been able to create given what’s been a very modest budget,” Vitale said. Roberts’ role is one of engaging customers and advertisers. His time is spent meeting with growers, distributors, dispensary owners and manufacturers. From those meetings he gets insight into patterns and trends in the industry that inform the content in the magazine. Sharing that information comes from the level of trust that Roberts said he establishes. “There is no secret that it comes from relationships and doing what you say you are going to do,” Roberts said.