A Prescription for Growth

After discussions with budtenders about in-demand products, the founders of Dr. Norm’s launched a new line of cookies containing pure CBD and 1-to-1 THC-to-CBD ratios. Photo courtesy of Dr. Norm’s

Owners of a California infused-product company cultivate relationships with retailers and delivery companies and anticipate market trends to expand their brand

By Joey Peña

Infused product makers eager to expand their brand can heed a doctor’s advice. Dr. Norm’s, a Southern California cannabis-infused cookie producer, started by selling its products in three Los Angeles dispensaries in 2017 and, in just a year, has begun distributing to more than 110 retail shops across California.

When the Koz siblings – Dr. Norm’s co-founders Jeff Koz and Roberta Koz Wilson – started selling Dr. Norm’s Chocolate Chip Therapy Cookies to stores in January 2017, they were baking 2,800-5,600 cookies every three to four weeks. Now, they’re baking 12,000-20,000 cookies twice per week to meet increased demand.

For infused product makers eyeing rapid growth, the Koz siblings prescribed leveraging relationships with key retailers and online delivery platforms, being flexible with minimum order amounts, anticipating market changes and carefully vetting distribution partners. They also emphasized the importance of relationship building.

“There are all kinds of ways to (expand), and the way we’ve done it is the way we do things as a family: in a direct and really personal way,” Koz Wilson said. “These aren’t marketing techniques, they’re personal relationships.”

 

Identify Critical Retail Partners

The Kozes suggest companies looking to expand their brand identify popular retail partners that will give their products much-needed exposure.

Through their Weedmaps sales representative, networking at the 420 Games athletic events and online research, the Dr. Norm’s co-founders identified a handful of dispensaries in the Los Angeles area as critical retail partners. In the first months of operation, they made sales calls and visits to get their products on those dispensaries’ shelves.

Courting retail partners requires persistence, while vetting them calls for attention to compliance. It could be harmful to your brand, for example, to sell product in unlicensed stores or shops that flaunt the rules.

“A lot is changing in California’s (cannabis) retail environment,” Koz said. “You have unlicensed stores that have no intention of becoming licensed or compliant. … It’s important to weed out shops that aren’t compliant and focus on the shops that have greater potential to be around for a while. Compliance and being a stalwart brand are really important to us.”

It isn’t easy to get your product on shelves in top-tier dispensaries, Koz Wilson said. A critical part of the Kozes’ strategy is high-touch communication with dispensary owners and buyers, they said.

In lieu of a traditional relationship with a distributor, which wasn’t previously required under California law, the siblings made their own sales calls and dispensary visits to get their products in stores.

 

Be Flexible and Persistent

When a dispensary agrees to stock the company’s signature product – Dr. Norm’s Chocolate Chip Therapy cookies – the Koz siblings are flexible with minimum order amounts, which can be a barrier to getting a new product on shelves.

“It has really helped that we’re flexible with our minimum order,” Koz Wilson said. “We’ve agreed to minimum orders as low as $150 to let (dispensaries) see how the product sells. That can be taxing for your business, but when the product sells and (dispensaries) start ordering $400 in product, then it’s worth your time.”

They also hosted patient appreciation days at retail shops that carried their products to promote the partnership. Often, that led to larger orders for inventory and orders for the dispensary’s other locations.

The flexibility and personal touch – direct communication between the owners and the dispensaries – and persistence were key to growing the Dr. Norm’s brand, according to Koz Wilson.

“You need to be incredibly persistent,” she said. “Buyers and managers are bombarded by vendors, and it’s really, really tough to get their attention. You need to have a good product, no question – one that sets itself apart. But you also need to be on the street, and making phone calls and site visits, and sending text messages and emails. You have to be able to be told ‘no’ 19 times and keep going back.”

Anticipate Market Changes

Product development and timing have been critical to Dr. Norm’s rapid growth, Koz said.

Before California legalized adult-use marijuana, the Koz siblings sold low-dose chocolate chip cookies (5- and 10-milligram single-servings of THC) in addition to 25- and 75-milligram products for medical marijuana patients.

In California’s new recreational market, the higher dose products had to be pulled from shelves because they exceeded the new regulations, but the Kozes already had established brand recognition for Dr. Norm’s compliant-dose cookies.

“We were very well positioned for the adult-use market,” Koz said. “We had a fully compliant product before a lot of others, and that helped fuel our growth. The first quarter of 2018, we started to get calls from dispensaries, and they’d say, ‘I heard from another business that you have compliant product.’”

After discussions with budtenders about in-demand products – specifically CBD products and products with 1-to-1 ratios of THC to CBD – the Dr. Norm’s founders are launching a new line of Peanut Butter Chocolate Chip Therapy cookies in pure CBD and 1-to-1 THC to CBD ratios.

Meeting more consumers’ needs means your products are more attractive to retail partners, the Kozes said.

 

Partner with Delivery Services

Technology also helped with expansion. Dr. Norm’s partnered with Eaze, a cannabis-delivery service in California with distribution sites around the state, to provide direct consumer exposure for Dr. Norm’s products in markets where their edibles aren’t for sale in dispensaries. Consumers throughout California could use the Eaze mobile app to purchase Dr. Norm’s products and have them delivered to their doorstep.

“Eaze gave us a foothold in the Bay Area, which we wouldn’t have had otherwise,” Koz Wilson said. “Eaze helped tremendously with brand extension to individual consumers.”

The Koz siblings delivered 3,700 units to Eaze’s seven distribution sites throughout the state and promoted a 25% single-day discount on product, which led to five times Dr. Norm’s average daily sales. The siblings also designed a custom package exclusive to Eaze’s customers.

Eaze’s billboard advertisements are another boon to the products it sells.

“It has taken us into markets we haven’t been able to physically get into on our own,” Koz said.

Vet Distribution Partners

Under new regulations, distribution licenses are required for California businesses that sell and shuttle product throughout the state on behalf of product manufacturers and growers.

That means connected distributors with excellent track records and sales contacts will be in demand.

“Distribution is also sales,” Koz said. “You want someone who is personable and persistent, and you want a distribution company that has its act together in terms of the logistics and the metrics. It’s a tall order.”

When they vetted distribution partners, the Dr. Norm’s co-founders focused on communication skills, the candidates’ portfolios and the terms of the agreement.

Koz Wilson said they wanted a distributor who would communicate clearly and consistently with clients. “Not a lot else can happen if you’re not communicating on a regular basis,” she said.

They also wanted someone who would reflect the siblings’ passion for their product and communicate the story of a family business to new retailers. “You have to feel comfortable with who’s representing you,” she said.

The Kozes wanted a distributor with a small portfolio so their product would be a priority. Product exclusivity was also important; they wanted to produce the only cookie in the distributor’s portfolio.

“If someone has a portfolio with 70 products and three other cookie lines, I don’t think we’d want to do business with that person,” Koz said.

Finally, the terms and conditions of the contract – the percentage of sales the distributor makes, and the expectations for the distributor’s work – should be fair to both parties.

“The terms should be fair,” Koz said. “We don’t want to take anything away from people who are doing a great job and growing our business. We’re win-win kind of people. We want to be successful and work with successful, like-minded people. We want everyone in our partnerships to benefit from our success.”

 

Your Story Can Sell Your Brand

Consumers want to connect with a brand’s story, and Jeff Koz and Roberta Koz Wilson, founders of Dr. Norm’s, a Southern California cannabis-infused cookies producer, love sharing the story of their family business.

The siblings grew up northwest of Los Angeles, in Tarzana, with their father, Dr. Norm, who was a physician, and their mother, who was a pharmacist. Roberta and Jeff’s mother believed chocolate chip cookies were the best “medicine,” and she shared batches with family, neighbors and total strangers. Her recipe – the Kozes’ “secret weapon” – has stayed in the family, and it is the foundation of the Dr. Norm’s brand.

“Our story has helped us spread the word,” Koz Wilson said. “We didn’t realize what we had in terms of marketing. People love our story because it’s authentic, and because we pay homage to our parents.”

People also like that the siblings founded the company together and that they’re “not spring chickens,” Koz Wilson said. She believes consumers gravitate toward the slice-of-life, Americana nature of the family’s story.

“People like to feel a connection to a brand’s story,” Koz said. “When we tell ours, it usually brings a smile to people’s faces. Folks really respond to the idea of family owned and operated.”

The siblings’ experience tells them it’s important to communicate your brand’s story authentically and work with distribution partners who can do the same.

“No one can convey your message like you can,” Koz Wilson said.

“In working with a distributor, it’s so important we work with someone who can communicate our message, and that they feel a kinship with our brand,” Koz said.

– Joey Peña