Matthew: Hi, I’m Matthew Kind. Every Monday look for a fresh new episode where I’ll take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at cannainsider.com. That’s cannainsider.com. Now, here’s your program.
Many entrepreneurs create a product or service and then look for a way to get traffic to land new customers. Our next guest has taken a different route, creating a content distribution network that will allow him to market his own products. I am pleased to welcome Drake Sutton-Shearer, founder and CEO of PRØHBTD, to the show. Drake, welcome to “CannaInsider.”
Drake: Matt, thanks for having me.
Matthew: Give us a sense of geography. Where are you in the world today?
Drake: Luckily, today I’m not on a plane. I’m in LA, so I get to be around my team and have a little personal life at the same time.
Matthew: Great. And what is PRØHBTD at a high level for people that haven’t heard of it?
Matthew: Okay. And can you share a little bit about your background and journey and how you got into the cannabis space and then how you came to start PRØHBTD?
Drake: Sure. You know, I had a relationship with the plant since I was very young, actually back in New Zealand. I’ve been in the States now for a number of years. As you can probably tell, my accent has waned. I was always very fascinated with cannabis, and I was very fascinated with North America, specifically the U.S. So, I came to the States when I was 21, I think it was. And so, with the exception of around 18 months in my life, I’ve spent my whole life as an entrepreneur. I’ve had multiple exits, a couple of misses, but essentially I build marketing and lifestyle enterprises from music to technology to products.
Matthew: And can you give us a sense of how much traffic you get on your sites for original content and kind of size of your distribution network?
Drake: Sure. Well, we have a…you know, on the consumer side of our business for media, we have a consumer facing lifestyle website at prohbtd.com, which is prohbtd.com. And we see north of 2 million unique visitors there each month. We also built the first cannabis video content network in the industry. So, across 17 different digital video platforms, we see about 30 million video views per month for that content.
Matthew: So, this is kind of a…little bit of an unorthodox strategy, but it’s really interesting and effective. So, you create this hybrid business that allows you to create unique content distributed to your nodes in your network, and then sell your own products. Can you about that a little bit?
Drake: Yes. You know, it’s a little bit in reverse of that because, you know, we created an ecosystem, right, if you will, of enterprise level capabilities to build brand and products. And some of those capabilities are a video production division and a video network that engages consumers because ultimately then, you can have a direct connection to your customer. So, by doing that, you end up building a more defensible operation because ultimately, the content is the moat around the business. Because a lot of people sell products to consumers, but when you actually have a content layer to your business, you’re constantly feeding your customers information, entertainment, etc., and they’re constantly engaging with it where you can learn more about what they’re interested in, which continues to help you optimize your product plan.
Matthew: What would be kind of a similar business model that we could look at outside the cannabis space that you can talk about that gives an example of exactly what you’re doing here? This hybrid strategy.
Drake: I would say, you know, Red Bull, Disney, Amazon are all hybrid companies that certainly have elements that are inspiring. I mean, they are very big companies. I think, you know, in today’s hyperconnected and multimedia product world, the companies who will thrive are those that have, you know, a direct connection to audience and also the ability to actually build brands and experiences for those audience as well.
Matthew: Right. So, I’m thinking about Disney here, like, Disney creates their own content and then they have ABC, which is the network they get distributed on. So, like, they create “Modern Family,” and then they put it on ABC and they just [inaudible 00:04:47]. It’s like they’re vertically integrated all the way through. And so, that’s very defensible, and that’s, you know, kind of high-level strategic thinking. But there’s not a lot of people that…there’s not a lot of brands that can go out and think that big or create something like that. So, that’s pretty amazing in many ways.
Drake: You know, it’s like Red Bull, right? People think Red Bull is a can of drink, a beverage that’s ready to drink. Actually, Red Bull and multimedia company that just happens to sell sugar water. You know, they have an incredible media capability that reaches and engages with consumers and, you know, they have a phenomenal sponsorship division as well that does deals with action sports groups on other places. And that just continues to push the brand into communities, right? And then they bottle that and package it and sell it. So, you know, that’s kind of one way of also looking at it.
Matthew: Yeah. And you’ve mentioned before that you don’t need dispensaries. What do you mean by that?
Drake: Well, look, I think dispensaries are…and you know, some people would disagree with me, but I really do think dispensaries are short-term solution for access to cannabis. I think it’s just, you know, a real estate and management fee play, you know, in the near term. I think ultimately cannabis and derivative products will all be eventually direct-to-consumer via delivery. And also in the places people are already comfortable shopping. I mean it’s very, very difficult to change consumer behavior. You know, and when consumers are looking for value, they will go to places that offer them value, which are typically big box retail. When they’re looking for specialty brands, they’ll go to, you know, specialty retail channels. But those people typically represent a very small segment of the overall opportunity.
Matthew: I agree with you there. I mean, I don’t know if dispensers will go away, but I feel, like, people, for convenience purposes, want just delivery. And at some point, we’ll just have an autonomous car come, and we’ll have a biometric confirmation of who we are either by our eyeball, or a fingerprint, or speech, or a combination of the three and there’ll be no one in the car, and it’ll be all electric. So, it’s like, really cheap to operate too.
Drake: Yeah, I mean, look, you know, they’re already delivering pizzas by drones. So, I think, you know…
Matthew: I think the first one was New Zealand, wasn’t it?
Drake: I think… Well, I’m not sure if it was New Zealand. If so, kudos to them. But I think it’s… I mean, that’s just the tip of the iceberg. You know, drone delivery is pretty clunky, but I think people will figure out a very efficient and elegant way to deliver services, for sure.
Matthew: Okay. So, listeners can get a sense of kind of the kind of content you create. Can you describe maybe some of the video content you’ve created that’s, you know, have been well received?
Drake: Sure. You know, we have, I believe, and I should know this, but we have more than 12 original series, original digital first shows, that we produce in-house and they’re going in network. I mean, one of the series is…subject is on cannabis companies, kind of bleeding edge companies. It’s called “Modern Grower,” and it does incredibly well in North America and internationally, as does the show “Pot Pie,” which is more of a millennial-focused cooking show. Right? It’s a kind of fun point of view on cooking with friends. And then our culture series, which is entitled “PRØFILES,” has really great engagement. And that’s where we showcase artists and people in culture who are doing interesting things with their lives.
Matthew: Okay. And what do you think the largest opportunities are with brand specifically? Can you talk about that? Because, you know, you’ve mentioned that in the past the brands are really big and you think that’s the way to go. Can you just talk about why you think brands are so important?
Drake: Yeah. I mean, look, brands resonate with consumers. People love, hate, trust, and mistrust them. A trusted and loved brand can build an empire, and a mistrusted brand can also destroy one. You know, we started in cannabis with cultivation, right? Agriculture. Not me personally, but just the industry. It starts with cultivation, right? As an agricultural business. Then it moved into packaging the product in jars and bags, and then it was some access to retail and distribution which is continuing to expand. Now, we’re in this phase of packaging this incredible ingredient into branded products to introduce to people. So, if you take an example, say of another agricultural product, say like the tomato, right? You could draw a parallel and say, “Well, we’re now in the Heinz Ketchup and Tostitos salsa phase,” right? Where they actually package the tomato as an ingredient and brand it, and now people are buying it and putting in…using it in their lives in a different way. And so, I think branded products give the industry an opportunity to engage with consumers in their own homes and make it part of their life.
Matthew: Okay. Now, you said…in the beginning there of your answer, you talked about trust, we trust and not trust, and that’s a key thing. So, how does a brand build trust? And I mean, how long can that take? How do you do that? I mean, consistency is obviously part of it, getting in front of the consumer, getting their attention and then having something to say that resonates and speaks to them and evoke something. I mean, how do you think about this? Because there’s a lot of people listening and I just wanna hear how you walk through in your mind, like, what brand means to you.
Drake: Well, I mean, you know, trust means typically that you’ve done something, build something that people find useful in their lives or that solves a problem for them, personal or otherwise, right? And when you do that, it’s typically the brand has some kind of utility, right? That tastes good, it feels good, it helps with pain, whatever it might be. You know, it could be an airbag, right? And when you have utility, and it’s a consistent experience, then you build credibility. And brands that have credibility tend to last longer in the homes and workplaces and in people’s lives in general. So, a lot of people that I meet in cannabis tend to build for themselves. You know, “I want to build a brand that I would like,” for example, they will say, versus looking at a customer profile or a gap in the market or whatever it might be and building for that. But if you’re gonna surprise and delight people, you better build something that they can use on a regular basis, ideally, and they can fit into their life.
Matthew: Yeah. I have a friend that’s a professional chef, and he says, you know, “If people are gonna get a babysitter and come out to, you know, a restaurant and have a credible experience,” like, “I need to do something out of the ordinary to make sure it was worth it for them.” And he talks about combining fat with, you know, crunch, and you know, spiciness, and sweetness, and all these different ways and creating this just mouth carnival for [inaudible [00:12:07]. Yeah.
Drake: Yeah. mouthcarnival.com. It’s great. I think what he…you know, he’s got the right approach, or she has the right approach because the first thing they’re thinking is of the customer. And when somebody takes the time to go somewhere and visit your establishment, there is intent to do something. And so, if you’re able to deliver on a promise to them and they have a great experience, then you’ll grow your business usually. So yeah, that’s great that they have that, that point of view.
Matthew: So, what products are you focused on creating now and, you know, showing in your original video content that is resonating or are you working on that you can talk about?
Drake: You know, we’re creating where we’re building across beverage, personal care, you know, topicals, etc., and transdermals, you know. Those the kind of the areas that we’re focused on. I think when you make products, it’s important to make products for your customers. So, we’re kind of focused on customer profiles and making sure we’re building with purpose and with reason versus just for ourselves.
Matthew: Okay. And then beyond just the immediate now, what are you thinking two to three years out, what kind of products?
Drake: You know, a good question. And if I knew, then I wouldn’t be able to tell you either. But I think it really depends, you know, on the customer requirements that we build for. We have an innovation group in-house, and they’re creating some pretty cool things. And, you know, that takes time. You know, it takes 12, 18, 24 months to build a brand from scratch with a lot of thought and strategy and tactics. But cannabis, you know, if you take two years to build a brand and launch it, the market would have changed. So, people are building and launching brands much quicker than that, finding the way in the market, and then, you know, changing as they go. I’m not sure that’s the right strategy or the wrong strategy, it’s just the market we have today. So, that’s kind of the hand we’re dealt with.
Matthew: You know, when thinking about original content and viewers’ attention spans, it seems like it’s getting shorter and shorter in one way, and then longer and longer in other way. Some podcasts are 3 hours long and then, like, you know, people look at animated gifs on Twitter for 10 seconds. But, I mean, ultimately, we’ll probably just end up like in the “Matrix” where you have some, like, cerebral cortex that just tells you what you need to know when you need to know it. But I mean, how do you think about creating content that is the right, you know, digestible format for people’s attention spans?
Drake: You know, a great question. We have a really interesting time at the moment where we have an overabundance of content and less time to watch or indulge in it. And at the same time, we have less time. We are using that time in very unstructured ways, right? So, attention span is dropped dramatically across the board and across demographics. Anyone that has three hours to listen to a podcast sounds like a great lifestyle. Lead me to it. You know, so I think it’s really all about…again, it comes back to your audience, right? Like Netflix knows their audience so well. They know exactly what to produce for them, and they continue to be successful doing that because they’re hyper data-focused. So, they were intelligent in the way that they produce, I think.
You know, then you’ve got pure creatives who create with passion and style and dignity, and who really believe in something, and they believe in the story. And so, they find a format that works for that, whether it’s a short form digital series, or an independent movie, or whatever it is. And then they go create that, and they hope that somebody somewhere decides to distribute it, and then they hope that an audience actually sees it. And so, I don’t think there’s any, you know, real role there because companies have different reasons for doing it, right? And as do people of PRØHBTD. I mean, we’re very focused on the future, at least building premium lifestyle content and also content that integrates branded products seamlessly with a call to action because that dovetails into our overall strategy.
Matthew: Okay. And so, you’ve got your videos on Apple TV and Amazon. Was that a…were those partnerships difficult to cultivate given that, you know, some parties still see cannabis as forbidden? You know, it’s like… Can you talk about that a little?
Drake: Yes, yes, yes, yes, it was hard. It was hard. But nothing’s easy. I mean, look, we’ve done a lot of firsts in the industry. You know, our mission as a company is to lead cannabis from the black market to the supermarket. And in order to achieve that, you have to do a lot of things right, but to get them right, you gotta have a few wrongs. So, you know, we have partnerships with 17 different digital video platforms, including, as you mentioned, Apple, and Amazon, and Roku, and many others. And so, that’s one thing for content. But we also made exclusive global deals with “Entrepreneur” magazine to introduce business leaders to the mainstream business community, right? I believe there are incredible entrepreneurs in the cannabis industry and really smart people and they’re in a very challenging environment. And I think that it’s important that people recognize that.
So, you know, we built the top 100 cannabis leaders with “Entrepreneur” magazines. That was that. You know, we have a global deal with Advertising Week who are the events leader in what’s next in the marketing, media, technology, etc. So, we go around the world with them and speak about cannabis and help to educate CMOs and business leaders. You know, we recently partnered with Licensing Expo who are the market leader in licensing for trade shows. I believe that now we’re in the phase of branded products, which will last for a long time, a natural next evolution of brand as to license and expand across different categories. That’s the reason we have things like Baileys Irish Cream Coffee Pods, right, that don’t have alcohol, or there’s many examples of upgrade licensing programs.
And I think cannabis and people that build brands that resonate with consumers will have opportunities to build brand platforms that extend beyond the cannabis products that they’re selling. So, you know, we have that relationship too. So, there’s a lot of things that we do to reach the mainstream into mainstream cannabis. And it’s with consumers, and it’s with business. So, that’s kind of the way we view the world.
Matthew: Yeah. Even Coca-Cola is there like a licensing business. If you think about it, they have their distributors, then the distributors take care of the low margin piece, getting it out there and they just take…and they just deliver syrup, essentially, the high margin piece out to their network. So, a similar…different kind of network. But yeah…
Drake: It is. You know, it’s funny because Craig Binkley who runs my…who runs ProWorks, which is a consumer brands division, he used to run the Minute Maid and Diet Coke business worldwide, and he was the CMO at Coca-Cola across their branded product portfolio in Mexico. And you know, he’s seen a lot of that business, and he understands it very well, you know. And I think when you have people like that as well, that are in your brain trust and that are helping you to determine what next steps are in the business, it’s very fortuitous.
Matthew: You’ve been raising capital lately. Can you talk about where you are in that process and what it’s been like?
Drake: Well, raising capital is always a fun process for both investor and entrepreneur. You know, we’ve raised approximately 20 million, and we’re just finishing up this next round. You know, we’ve got some of the most prolific cannabis funds and investors on that cap table. I’m feeling really good about closing the next couple of millions. So, I think after that, we should be finished with this round most likely.
Matthew: Okay. And just a quick New Zealand question, since you’re a Kiwi, how do you feel doing business in New Zealand is different than the U.S.? I mean, I know you’ve been in the U.S. for a long time, but I’m sure you see the cultural differences and nuances.
Drake: Oh yeah. You know, Well, I love the U.S. I mean, it’s been so good to me. I feel so at home here. It’s a lot of the people and just the diversity. You know, like, there’s… So, I think there’s 4.7, 4.5? I should know, but I don’t. More than 4 million people are there in New Zealand and a lot more sheep. And you know, the U.S. has 300+, 330 million people, right? So, there’s plenty of differences just purely from a scale point of view. You know, the differences of the size of opportunities, difference around regulatory hurdles, you know, you look at even politically, you know, New Zealand just banned all the semi-automatic weapons, right? They had a shooting in Christchurch, which is where it was my stomping ground as a teenager. And you know, they decided that they’re just gonna ban these things across the country. That wouldn’t happen in the U.S. It’s just a very different environment, for better or for worse, you know, when it comes to that. And there’s a lot of people that had different opinions on that, right? So, I think, you know, small is great to enact change and to move fast, but large just has incredible opportunity. And, you know, the U.S. just has things that New Zealand will never have them. I just love it here.
Matthew: Except for hobbit homes, we don’t have those in the U.S.
Drake: No hobbit homes. You know, it’s funny, when I first came to the U.S., you know, “Lord of the Rings” wasn’t a thing. I mean, it was a great book that I’d read, but people feel that there was a bridge from Australia to New Zealand, many people that I talk to, which I always found amusing. You know, because it’s certainly not one. It’s a pretty big bridge, you know. So, yeah. No hobbit homes. But when “Lord of the Rings” happened, tourism in New Zealand just went through the roof. And so, a lot of people went looking for Gandalf, I guess.
Matthew: Yeah. Well, let’s move to some personal development questions, Drake. Is there a book that’s had a big impact on your life or your way of thinking that you’d like to share?
Drake: So many books. I think there’s a quote, right? “Supreme excellence consists of breaking the enemy’s resistance without fighting.” And if anyone listening knows where that quote is from, then they’ll know the book.
Matthew: Guess we got a little riddle in there. That’s good. Okay. Now, is there a tool that you and your team use that you consider valuable to your productivity?
Drake: Yeah. Well, look, we use Slack for coms in our office and in our company communication, which is great. We use HubSpot for deal tracking and management for the brand partnerships team. And we use Asana overall as a company for project management. And then everything in between is like filled in by Google Docs, which is always great to have.
Matthew: Okay. Now, here’s a Peter Thiel question for you. Another LA resident. What is the one thought you have that most people would disagree with you on?
Drake: That money does actually buy you happiness.
Matthew: Oh, wow. You’re gonna have to elaborate on that a little bit. I just heard 1,000 socialists die. Hey…
Drake: You know, I didn’t grow up with money at all, and certainly it led me to a lot of happiness. I think that, you know, money leads to freedom and freedom leads to choice and that often leads to happiness. And I think that, you know, I haven’t met many people who are very successful in terms of the money because success comes in many shapes and forms. But folks that are very wealthy are certainly happy to me, you know. So, I do find that people who build their wealth definitely tend to be happier than those that are given their wealth. But again, you know, it’s… Yeah, I just think the money does actually buy you happiness, and I think a lot of people would disagree, including many of my friends.
Matthew: And it’s a… And sort of people that earn it, it’s kind of like they’ve sharpened their knife against a rough stone, and in that process, comes appreciation and gratitude because they know what the struggle is.
Drake: Yeah. It sucks to go back, you know. I mean, I definitely had a few losses and more wins than losses, that’s for sure, and it’s painful, right? Some people are addicted to success and the pain. Yeah. I think that what you said is true. There’s an appreciation for getting there. There’s an appreciation for doing something good when you’re there, you know, and not being an asshole. So, you know, helping people is definitely a part of the end result.
Matthew: Okay. Drake, as we close, how can listeners find out more about PRØHBTD, find your unique original content and if we have any accredited investors that are interested in reaching out to you, how can they do that?
Drake: Sure. You know, our company site is prohbtdglobal.com, prohbtdglobal.com. Our Instagram handle is the same as that. Or they can go to the consumer lifestyle media site, which is prohbtd.com. prohbtd.com and Instagram is the same as that. I’m also on LinkedIn. I think it’s DrakeSS. I haven’t checked for a while. You can hit me up there, but happy to talk to anybody who’s interested in talking about PRØHBTD.
Matthew: Drake, thanks so much for coming on the show today and telling us about your business. This is really interesting, and I’m really gonna be watchful to see how big this empire grows in different ways so I can watch it on my TV and computer.
Drake: Thanks, man. I appreciate the time.
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