Why cannabis is worth the high risk for one New York firm

Cannabis PR is far from mellow. As the industry gets a higher profile, one agency is jumping in early.

NEW YORK: North 6th Agency formed a cannabis division this month. The New York-based firm’s CEO, Matt Rizzetta, called the move a "strategic risk" for his seven-year-old agency, saying he is banking on getting established in the industry before he has to compete with bigger agencies for cannabis clients.

He explained that large agencies haven’t jumped on the cannabis bandwagon because it’s not yet worth the investment.

"The large global agencies for the most part are not taking on the legal cannabis business right now," Rizzetta said. "Either because it’s cost prohibitive—the retainers for the most part are not competitive relative to other industries—or it takes a lot of time and money to build out the domain knowledge within cannabis, and that is a big investment."

The cannabis industry is young but growing. Recreational use of marijuana was legalized in Colorado and Washington four years ago. Since then, other states have followed suit: California, Oregon, Nevada, Maine, Massachusetts, Alaska, and Washington, DC, have legalized recreational use and 19 more allow medical use. There are significant financial benefits for states that legalize marijuana; the legal cannabis industry in Colorado accounted for nearly $80 million in tax revenue in 2015.

Clients for a PR agency can range from consumer-facing distributors to venture capital funds that want national attention.

Rizzetta said cannabis clients no longer want to stick to weed-industry trades such as High Times or Herb.co.

"We realized that if we really wanted to differentiate ourselves from other agencies, it's going to be the mainstream national play, not the trade play," Rizzetta said.

He contended North 6th has an advantage over cannabis-specific agencies, of which there are several, because the firm works in sectors such as technology, healthcare, the environment, and finance. Before formalizing the group, which is led by director Robert Vanisko and has a staff of four, it brought on several clients in the sector in 2016. The firm works with cannabis-specific venture capital funds Canopy and Poseidon Asset Management, as well as Green Flower Media, cannabis oil Jetty Extracts, and online cannabis marketplace Tradiv.

"We've been in cannabis now for well over a year," Rizzetta said. "That may not sound like a long time, but in the legal cannabis industry, that's like forever. This is 100% a long-term investment that we're making in the legal cannabis industry."

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