Ep 10: Why Cannabis Needs Quality Signals — The Shift

with Claudio Miranda · The Shift, a podcast by Headquarters

Budist COO Claudio Miranda breaks down why cannabis lacks the quality signals - ratings, awards, origin - that guide wine and coffee buyers.

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Auto-generated from the episode audio and lightly edited for readability.

0:00 So Claudio, can you tell me a little bit about yourself, please? Cool. Well, my name is Claudio Miranda and I am the COO and co-founder of Budist. We're the cannabis industries's uh leading and first ratings and review platform. You know, we started as a kind of review platform, but have developed, you know, further into competitions, curated events. We also do a lot of expert content. Um, I've personally been in the cannabis industry um, my whole life, not not continuously, but uh, over 40 years and I got my start really as a teenager. Um, you know, actively involved in the traditional market and did that through the mid '90s and really, you know, learned how to cultivate cannabis and and do things of that

0:50 nature in the mid '90s here in the Bay Area where I'm from right now. And that was at the birth of Prop 215 for those familiar with the history of California cannabis and and and reform and regulation. Um but I got out of cannabis for about 15 years and I jumped back in um around 2013–14 into the licensed market and since then mostly in California I've owned and operated every license type in the state with the exception of lab testing. So I've owned and operated retail stores, uh, large scale cultivation and manufacturing, distribution, delivery. So I've been very very active on the kind of license holder side, operator side. And more recently with Budist, I've kind of flipped to the other side of the table to then help a lot of the brands and the license operators tell their stories in

1:42 market and to spotlight exceptional products and producers. You did you mention you were out of cannabis for 15 years? Is that Did I get that right? What were you doing? Um I got into mostly like tech and natural products, but really natural products. So that means like organic products um things of that nature. You know, my you know, I've been an entrepreneur for over 20 years. The first company I started was uh the um the nation's first sustainable fresh cut flower company. So my business partner and I basically um pioneered the market for sustainable floral as it's called and that's fresh cut flowers, right? What you go to the store and buy roses for Valentine's Day or tulips for mom for Mother's Day or all the different reasons you buy flowers for sympathy for funerals all those things. And at the time when we started our company, the

2:33 market was dominated by FTD, you know, um, ProFlowers, Teleflora, all conventionally grown. And if you're familiar with how that agricultural market works, it's very pesticide-heavy because you got to have these beautiful flowers as your output. Um, and we went and tried to reform that through agricultural production and really making sure that all these farmers were using sustainable and organic uh, farming methods to produce flowers. And then what we would do then is turn that around to consumers who made values-based purchasing decisions, right? people who buy organic products and services or or natural or or sustainable products like go to a whole foods store to buy organic milk organic produce. It's that customer that you know stands for the environment and

3:23 and and for personal health that then is the customer that kind of would buy from us. So anyway, that started a journey in the organic products industry where I launched several companies in organic um floral, organic bed and bath, organic apparel, a variety of different products. And the technology side is that we primarily sold those products direct consumer, you know, through e-commerce, but then we also wholesaled to a lot of natural product stores as well. What when was the moment that you were like, you know what, I want to get back to cannabis? What what happened? So, you were like, I want to get back to cannabis. Yeah, it's a good question. Um, so I mentioned I'd been in cannabis really from the time I was about like 15 years old, about like 25 years old. I was in it for like a decade as a teenager and through college. I paid my way, you know, I went I went to school at UC

4:14 Berkeley and I paid my way through school cultivating and and basically distributing cannabis. Um, and I got out of it for the reasons I mentioned. Um, and when I exited my last organic products company, I was looking for the next thing to do, like most people do in that situation, I started to consult. I sat on a few advisory boards. So, I was kind of floating around kind of looking like, okay, what do I want to do next? And through that process, and I was mostly consulting for income at that time. And what I ended up doing is like meeting um some folks that were in the licensed market and they're like, "Hey, we love your help with uh some of the services you offer." And I was doing a lot of like technology implementations, marketing services, building websites, things of that nature. And long story short, you know, again, I met some folks that were in the licensed retail market in California.

5:06 And through that process, I'm like, "Hey, that I I know cannabis really well just through like culturally and in my lifestyle, but I never really connected the dots with what I was doing professionally, right? So, I found that that was a great opportunity. It was a personal love and passion of mine again as a lifestyle decision. And I was able to marry that with my professional background and everything I'd learned working in technology and natural products. So I applied all of that expertise, that knowledge uh to then building cannabis companies. And so I started on the retail side uh managing retail stores, dispensaries and then ultimately I I launched my own with a group of partners. So, it's a very good set of skills and a very good set of experiences that sort of organically got you into cannabis because everything

5:57 of, you know, everything you've been doing before. So, it it completely makes sense. Um, that's exactly right. Yeah, it was very organic. It wasn't like I had some vision to go in and be some kind of cannabis entrepreneur. It just kind of really happened naturally. Yeah. Do you see a world where buyers are actually using your tool to inform their purchasing decisions for new products or strains instead of relying on what a brand rep is telling them? So, this is a little bit more into the weed of it, a little bit more specific. No, that's a fantastic question and the short answer is like absolutely yes. It's already happening. And here again, you know, we're not reinventing the wheel. You know, if you look at analogous industries and businesses like the wine industry, right? It's very common practice. It's very institutionalized that whether you're a wine buyer, like at a retail store, or

6:48 you're a wine consumer, like a buyer as in a consumer, you often rely on things like quality signals, right? That are things like awards, right? So often times if I'm going into a retail store, if I'm a retail buyer and I'm looking at some products uh to carry, um you're kind of looking at these quality signals that in some ways go beyond what the story is of the brand, right? And the family and things like that. And those quality signals could be things like awards, right? Like this won gold medal at the state fair or at this or that competition. It could be ratings and reviews in wine. That's very common place. Anyone who's ever walked into a specialty wine store will likely have run into ratings that are next to the wines. So it will be like this Cabernet is 94 points by a well-known critic that

7:40 works for a publication like Wine Spectator or Wine Advocate or Vinous. So you find that globally. It's not just like an American thing. No matter where I go in the world, I can find uh ratings that go along with with wine in this example or things like awards, right? And and by the same token, and again, these are quality signals, you find things like shelf talkers that speak to like the origin, right? It might be like this is from Napa Valley, California as a geographical origin. That gives that then confers upon that product a sense of quality because of where it comes from. If you know your wine comes from Burgundy or Bordeaux, you can be like those are known for high those are high quality production regions. So there's already something there that informs the buyer that I'm getting a quality product. So what it really does then

8:31 these quality signals as we call them directly inform purchasing behavior because it helps buyers again whether that that's a consumer or a retail buyer really navigate which products are better than others. And the last thing I'll say about that is that there's a lot of studies that for consumers, if you walk into a supermarket and let's say you have 30 different Cabernet uh brands to choose from that are roughly they range from 20, 30, 40 bucks, like what do you buy, right? Most people would default to buying on price point or maybe the label, the aesthetics of it appeals to them. There's a story there. But what most commonly drives that purchase is they'll see that rating or they'll see that award. So if you saw 20 bottles of Cabernet and let's say they

9:21 were all roughly the same price, but one of them has a gold medal on it, like a little sticker or placard that says gold medal, triple gold medal, or it said 96 points from like a top wine critic. From a purchasing behavior perspective, uh, consumer behavior shows that you're more likely to buy that product because now you've got like something that validates and gives you more confidence in your purchasing decision. So, but is doing that for cannabis, whether that's an award, whether that's a rating or review, whether that's highlighting the geographical origin like Emerald Triangle, Humboldt as the origin of that product. A certification has a similar effect that tells you this is certified organic, certified fair trade. All of these things go under the umbrella of

10:12 quality signals that inform purchasing behavior. And although this is used in every other of these other markets I'm referring to, coffee, cheese, beer, wine, spirits, cannabis has not yet adopted this or institutionalized it as a practice. Although it's proven to work in other industries and it's through that model that we gave birth to Budist knowing that if it works for all these other industries it's probably going to work for cannabis and we're already seeing that proven out by the retailers and the buyers who are starting to utilize um our Budist assets and services in this capacity. Are there any differences like big differences crucial differences that you're observing or no? Well, if I understand the question correctly, like if we compare it to alcohol, right? Whether that's wine, craft beer, spirits, um most of those

11:04 reviewers, they don't review the effect, right? Like usually they're reviewing the quality from things like aroma and flavor and texture and richness and the vintage and things of that nature. You're not like, "Oh, how what was my buzz off that wine?" Like, was I a happy drunk or an angry drunk? right? Like that that's not part of the kind of uh the assessment criteria. Whereas with cannabis, that's a significant component of the assessment criteria, especially when you're looking at wellness products because for for most cannabis consumers, you're consuming to um for a desired effect, whether that's uh to help you go to sleep or alleviate your pain or to relax. A lot of people use it as a substitute for like instead of coming

11:54 home after a hard day's work and pouring a glass of wine or or or a glass of whiskey to kind of wind down, a lot of folks use cannabis for that wind down. So, it's desired effects, right? And then by the same token, a lot of folks are using it for uplifting, for creativity, to go on a nature hike, for inspiration, and and things of that nature, right? So there's all these effects, the most profound of which are medical and therapeutic effects, but there's also recreational effects that we um analyze carefully and assess as part of judging as part of judges in the case of competitions or in the case of reviews for critics. If you had to audit a cannabis company in one day, what are the first three things you'd ask for before deciding whether they're being

12:44 run well? Yep. Yep. I mean, primary, look, I'm kind of a marketer by trade. Brand marketing is what I've done for most of my life. Um, if I'm going to kind of put that label on myself, but you know, one thing we find a lot in the marketplace is a lack of differentiation. It's kind of, you know, and just in in entrepreneurship in general, we say, um, why are you bringing this product or this brand into being, right? Does anybody care? And it's a common thing. It's a common mistake that entrepreneurs do is we create things that people don't want, right? And so, you're always kind of asking yourself like, like, what is it that's unique about my offering that's going to get a consumer, a desired customer to care and to buy from me? That's kind of one thing. like why should they buy anything from me, right? And the onus is on me to create value

13:35 and to deliver that value and to win that customer support. But then also how do I differentiate from other products in the marketplace? And so going to the question here is a lot of cannabis companies and I've consulted with a lot of them. I've worked at cannabis incubators where we where we kind of help companies capitalize them and help get them off the ground. And it's a primary thing that I teach. It's like you got to really go back to like your your reason for being your why and like why am I putting another cannabis product out there because we know especially in the more saturated markets like California there's just no shortage of flower or another vape pen another like you know another 90% vape pen made from distillate that has a strawberry flavor whatever right there's just a sea of undifferentiated products and what

14:25 happens when you get that saturated market, your only thing you can really compete on is price, right? Because then it's just like, hey, I'm no different from the product or brand next to me, so maybe I can just sell it to you at a better price or I can give you a better discount. I'll get you a buy one get one free or I'll get you a 20% off. And that's precisely what we're seeing in in the cannabis marketplace. It's called a kind of race to the bottom pricing that has led to this phenomenon called price compression where just everyone's racing bottom you know bottom pricing right and that's because you have nothing else to differentiate on. So that's another reason why we created Budist is to say look Brands, you've got some other things you can hang your hat on the story of the farm of the family of the producer of the cultivar unique genetics the

15:15 region in which the appellation in which it comes from maybe there's something unique in your formulation like you've got to really be thoughtful as to what are the unique qualities of my products and what is that key differentiating factor it's Always great to have something new and innovative as well that no one has done before. That's a little bit harder to pull off. But if you're able to do that, then you start the race much more successfully cuz then at that point you're getting into just operational execution among other things. But that tends to be more routine, right? If you got smart people that know how to sell well or how to run operations well or customer service well, that tends to be a little bit more of a commodity in the market. Whereas what's not as commoditized is knowing how to create a great product that that will really resonate with an audience

16:06 and that they'll love that is unique that's hard to replicate and that's what you should be focused on first and foremost as a company is creating that uniqueness in the world. Either that or you just go all in on the commodity play and be like I'm going for mass scale. I'm going to be the Budweiser. I'm going to be just I'm going to be the low price leader. My unique quality is I'm just going to scale. I'm going to be the biggest at what I do at the lowest price. And that also requires a lot of skill. But that's all that's really hard to do because there's usually only a small handful or two or three players in the market that the compete on the Amazon level or the Budweiser level, right? Everybody else has to figure out the differentiation game, which is why I emphasize that. Do you feel like maybe the the the sort of um base differentiator in the future might be

16:57 genetics themselves or do you feel like it's going to be something else? For sure genetics will be a big part of it. 100%. I think that's something that's always kind of been there in cannabis. And you know, not to keep kind of tooting my horn at Budist, but but what's been lacking are the platforms and the people that help translate all this wealth of genetic diversity over to the consumer because the average consumer, they know indica sativa hybrid, right? That's about as far as their knowledge goes. They might know an OG. They might know a sour diesel and some of the kind of common, but when you really get into the the broad taxonomy of of cannabis genetics, it's like wine, right? It's like all the wine varietals, right? It's just it's just a lot there. So I think that absolutely it's important but it's only going to be

17:47 important to the extent that there are folks like Budist and we're we're not alone here educators journalists other folks in the ecosystem that help translate that universe of genetic diversity to consumers in ways that they can understand and familiarize and help make better purchasing decisions. But the short answer is absolutely genetics is key. The other key factor that we're really kind of uh looking at along with others is you know is origin right uh geographic origin. And there again in wine and coffee and fresh cut flowers and cheese and like all these industries and spirits origin is key. Right? If I'm going for coffee I'm going for Ethiopian or Kenyan or Guatemalan. Right? If I'm

18:38 going for cheese, I'm looking for that French cheese or or something maybe in Northern California, right? And cannabis is the same thing, right? So celebrating that and the and the coupling of that, if I'm getting award-winning, very unique genetics coupled with this is from Humboldt County, from the Emerald Triangle, this protected region of excellence. Now you've got something to really hang your hat on and tell a great story to um operate well in the marketplace. How do you think that mission connects to the industry's broad uh broader goal of policy policy reform and better access for consumers? Yeah, I mean that's a great question. I mean like um knowledge is power, right? Like you need people who are in informed, right? I I think what's I think one of the biggest things that's

19:29 plagued our industry is like institutional bias, right? from the government, from institutions within talking about America specifically and and what comes with that. In other words, if we're suppressing knowledge of cannabis, so it's not allowed in the universities, we're not allowed to build industry around it. What it does, it suppresses knowledge, right? So, we've been in a bit of a dark ages of cannabis where we're not able to celebrate everything this plant has to offer. In this conversation, we've talked about the medicinal use cases of what it has to offer on the recreational side, genetics, regionality, all these things. That's like knowledge, right? And so the thing is is that, you know, on the one hand, you need consumers to be aware of that, but you also need policy makers. You also need the whole ecosystem needs

20:19 to kind of lift that veil of of kind of opacity that has shrouded our industry and bring it into the light where we're able to celebrate all of these incredible things that this plant has to offer across the spectrum I've mentioned from recreational to medicinal and consumers once consumers are empowered with that information then they can make all these more informed decisions. Once policy makers are informed with this knowledge, they can then transcend their own biases and stigmas and institute better regulatory practices. And that's been the big thing, right, with reefer madness. There's been scare tactics and fear tactics that make us think that cannabis is going to make you dumb, it's going to make you sterile, it's going to make you a criminal, it's going to do all these bad things, but that's just simply ignorance. So once we go once we take

21:10 the path of knowledge and kind of casting a light on these things, it helps policy makers realize, oh, like this is actually something that's beneficial for the world. Maybe I'm going to have my own grandma consume cannabis for this and look at how it helped her. And then through that process, through education, both on the policy side and on the consumer side, that's where we build a mature market. What have you noticed are the best practices when it comes to transferring knowledge? And I want you to be specific if you can like what have you observed as being like oh this is the best way the people the the person the market the the state understands about this. Yes. Um okay that's an interesting as far as for the state being concerned. Um, you know, it's interesting because we, um, you know, I and my partner have

22:03 a lot of friends that are on the policy side of cannabis and that are actively lobbying um, on Capitol Hill or on the state level and they tell us that they often times reference Budist and they reference what we're doing because they see um, because they see that we're taking an education first approach that is again analogous to things that we're familiar with they're like look how Budist conducts these wine style tastings these hospitality experiences for consumers where in other words going to your question like what's very tangible one thing we do at Budist is we host tasting events these tasting events bring cannabis consumers to our events we have a team of our Budists that are like certified sommeliers in cannabis we're using um a lot of marketing tools

22:54 to educate the consumer things like, hey, how can you better understand the aroma and the flavor, the effect profiles of cannabis? And we're using various kind of tools in that interaction to educate people about um about cannabis usage. Now, why is that important, right? Because most cannabis events you'll go to is a bunch of people just hanging out, hotboxing a warehouse, partying, just dancing, and all that's great. There's nothing wrong with that. But there's nothing educational about it, right? There's nothing that really touches upon the health and wellness of cannabis. There's nothing that touches upon uh the knowledge and education of cannabis about how cannabis can be integrated into your life, how can it be used throughout the various kind of lifestyle choices you make in your life, how it can help grandma, how it can help you with sleep, how it can do all these

23:44 things. So basically, um, friends of ours take as the examples of what we're doing in the market to show that cannabis isn't this stigmatized underground kind of criminal element type of social activity. It actually looks more like people going to wine country to go wine tasting for the weekend. It looks more like an educational seminar on coffee cupping or on learning how to discern different like a flight of whiskeys, right? So, it starts to look more familiar. It starts to look more normal. It starts to look like more facets of our everyday recreational life that are happy and enjoying and and that enrich your life. And it's again trying to separate it

24:34 from the stigma that has been kind of unfortunately falsely created around just criminality and underground kind of nefarious activity. Right? So, so our friends that I'm referring to, use this as an example with policy makers to show, see, this is what cannabis when it's fostered, when it's advocated, when it's institutionalized, um, and when education and when it's education forward, this is how we can look in society, not the way that you guys have been painting it through decades of hysteria and reefer madness. outside of um the effect of cannabis and let's say um uh THC percentages, what consumers value today? What have you noticed that they value today when it comes to using Budist as a platform?

25:25 Yep. Yep. Well, for starters, you know, you know, I mentioned that we have a team of critics and judges and the way that we assess cannabis effects is one of several criteria or attributes we look at. the how we weight those attributes in importance vary by product type or category. Right? What I mean by that is some products like wine, things like aroma and flavor are really important, right? As we know, as an example, cannabis beverages is one of the fastest growing segments of the market. People want to use that socially, but it's also, you know, you're never going to sit around and enjoy a drink that a drink that doesn't taste good, right? Tastes like crap, right? So, so definitely something that that um you know we all love a well not everybody but most of us love a well-crafted cocktail for example, right? Like there's something about

26:15 mixology and craftsmanship and making a good cocktail. So, and that doesn't have has nothing to do with effect. So, cannabis has that as well, right? that especially in certain categories like concentrates for example hash we really look at the aroma we look at the flavor and that's a big part of the experience that we talk about and we emphasize that really tastes good and smells good and the smoothness of it like that and that's before the effect is even coming into play. So there's all that side of it. There's other sides of it like innovation uh hardware technology things like vaporizers right whether that's vaporizers like a Pax, for example, like a handheld vaporizer that you load flower in or it could be like cartridges right or all-in-one

27:05 vaporizers. The hardware there has gone a long way and there's a lot of cool form factors delivery methods that have really cool hardware that we also assessed. So, you know, we just got finished judging the California State Fair. I was one of the cartridge judges. I judged dozens of cartridges and all-in-one vaporizers. And the hardware is a key component of that because if I'm not getting a good hit, if it's not a smooth hit, if it's not reliable, if it's burning too hot or too cool or it just doesn't quite work well with the oil, there's a lot of factors we look into in the hardware alone. And this again is all before you even get to the assessment of the experience or the the effect profile. So anyway, there's a lot of other things that we look at a lot other competitions look at packaging like how cool is that packaging? We know that's important in other consumer goods

27:57 that you love that you know that Dolce and Gabbana kind of packaging or that Apple packaging, right? For a lot of people, that's an integral part of the experience of buying an Apple product is that box it comes in and the unboxing of the product. So, there's just it's just like any other consumer good. There's all these other things that you can assess and appreciate that aren't just is it getting me high or not or how is it getting me high? Can you tell us where can people find you and where can uh where can they get the um uh Budist uh platform? Yep. Yep. Well, the main hub is budist.com. That's our website. From there, it spokes out. We have an app on the um Google Play and Apple App Store. Uh where you can download the app and that's where a lot of our reviews and you can see our critics as well. So that

28:49 you can only read reviews but kind of get to know some of these product experts and and taste makers and and kind of learn from kind of their their craft and how they're looking at cannabis. So that's the Budist app. From there you can also go to um our Instagram which is budist_official. Um those are the main kind of components we encourage people that on budist.com you subscribe to our newsletter. That's another vehicle through which we educate and inform our customers. So between all of those the website the newsletters Instagram and our app those are the best ways to engage with us kind of digitally and through our website or newsletter you'll find out about our events. We're doing events in market every month that are like these tasting events. So, we invite people to come join us um if we're in a market near you.

29:40 Yeah. And it's just a very big community. So, everyone's welcome. Come on over and take a look at what we have and what we offer and what you can find out and again educate yourself about. So, that's great. And where can people find you as uh would you like to share your social media? Um, yeah. I mean, I'm not super active my myself on social media, but it is Claudio's Scope is is my social media handle, but I'm not active. You know, my business partner, who is also my life partner, Jocelyn, she's the CEO of the company, and her social media handle is Josie Bossi, and she's very active on social. So in addition to following as well as she has another account Budding Budist um where you can follow her and there's where she tells a little bit more of the journey uh of building butist as a company and everything that I've talked about here today you can follow along on that journey through her personal accounts as

30:30 well as budist_official