This month, Michigan-based Gage Growth Corp. announced a partnership with Khalifa Kush, the cannabis brand launched by hip-hop star Wiz Khalifa. While the brand has been found on shelves in Nevada, Arizona and Utah, this move marks a notable entry into one of the fastest-growing markets in the U.S.
“The strategy for us has been to partner with best-in-class brands outside of Michigan and bring best-in-class brands to the state of Michigan,” Gage CEO Fabian Monaco said. The KK pickup complements Gage’s partnerships with visible brands like Cookies and SLANG Worldwide, each deal bringing a new suite of inventive product lines to the Michigan consumer.
With a deal that was at least a year in the making, Khalifa Kush targeted Gage Growth for its rapidly increasing production capacity. In the third quarter of 2020, Monaco said, Gage was capable of producing 200 to 300 lbs. of cannabis per month. Now, the company is up to 3,000 lbs. per month. It’s that ability to guarantee production that catches the eyes of out-of-state brands interesting in expanding into new markets.
Gage currently runs nine dispensaries in Michigan, though the company has plans to increase that scope to 20 stores by the end of the year. This, too, matters: Holding the reins on retail allows a company like Gage to convey a certain amount o control over a brand partner’s products.
“You have to be able to control the experience for their customers from seed all the way to smoke,” he said. “That vertical integration is important.”
Monaco pointed out that Michigan’s highly competitive market has the economic mechanisms to propel prices downward over time. With more supply comes a lower price point. To beat that trend, it helps to provide an interesting twist on your product offerings. A celebrity like Wiz Khalifa is one part of that equation, and a lineup of different cultivars and flavor profiles tended by a local business like Gage is another. These things are important to a customer base that grows quickly more sophisticated.
“As more production comes online, having partnerships with brands like Khalifa Kush really adds that point of differentiation,” he said. “That keeps the consumer excited.”
This is also a contextualizing story for the cannabis market right now. As more states come online and more consumers enter the licensed cannabis space, the value of brands becomes more clear and more vital to a business’s overall strategy. Gen Z consumers, for instance, are aging into the legal cannabis market, and they’re brining with them a particularly pronounce affinity for savvy brand messaging and celebrity influencers. (Not for nothing, the December 2020 HQ Cannabis Brand Affinity report cited Wiz Khalifa as one of the more powerful celebrity influencer voices in cannabis.)
With that backdrop, Monaco said that the work with brands like Khalifa Kush and Cookies and SLANG Worldwide helps Gage understand its own brand. The deeper the portfolio, the more lessons that can be imparted back to a company’s internal strategy. It’s a feedback loop informed by celebrity-backed market knowledge.
“It opens up the opportunity to see within an ecosystem so many consistent brands,” he said. “The more information you have, the more partnerships you have, the better you can be. Whatever push we can have as a brand to variety of age categories is particularly important now, because this is the fight you want to win.”