The Secret Sauce: Building a National Cannabis Brand

Venturing into new markets can be a complex endeavor that requires strategic planning, and each market presents unique challenges, opportunities and regulations.

© Courtesy of Stone Road

One company that has maintained steady growth is California-based Stone Road Farms. Lex Corwin founded Stone Road in 2016. In 2022, he hired Sabrina Wheeler, now the company's chief operations officer.

Wheeler has played an integral role in taking Stone Road from a California cannabis brand to a multi-state operator. With Wheeler leading expansion this past year, Stone Road’s products are now available in retail outlets in Massachusetts, Michigan, Oklahoma, and most recently, Wheeler spearheaded a deal in New Mexico.

So, what is Stone Road's secret sauce for a successful brand expansion? Here, Wheeler shares comprehensive tips and considerations for those looking to venture into new markets.

Keep Standards Consistent

Wheeler says Stone Road incorpoates rigorous standard operating procedures (SOPs) into all its contracts across different markets. These SOPs serve as guidelines for which partners in each market undergo training, ensuring their comprehensive understanding of the company's processes.

"We keep it simple, just … like baking a cake," Wheeler says. "If they follow the formula, the product will essentially be the same."

For example, she says Stone Road does not use any trim or shake in its products, including its pre-rolls and half-ounce pre-ground pouch.

"There is [no] mix of shake and trim [that's] a huge differentiator," she says. "So that, and then [they’re] adhering to never using additives, distillate [or] botanical terpenes. We want to have the most natural products. The only infusion we use for our product is solventless bubble hash, made from ice, water and pressure. So, with that, it's, once again, going back to the recipe. As long as our partners follow the SOPs, the product will generally be the same across the country."

In each market, Stone Road seeks to collaborate with partners with similar values, such as family-owned organizations affiliated with sustainable, biodynamic farms.

Nevertheless, the company acknowledges the possibility of slight variations in its SOPs due to different climatic conditions across states. For example, she says some regions may not possess the necessary greenhouse or outdoor cultivation capabilities the company requires.

"Massachusetts, for example, … they do have some indoor operations [that are] completely solar powered. They focus on the sustainability factor, which is one of our three core ethos," she says. "Being able to keep our partners in line [is crucial]. ... We want a Stone Road customer to be able to buy a Stone Road product in any market and know what the experience will be like."

Vet Your Partners

When identifying and selecting like-minded partners, Wheeler says Stone Road uses a data-driven approach to gain a comprehensive understanding of the market landscape. Then, the company engages with numerous organizations to find the best fit.

As mentioned, a crucial part of Stone Road’s process to find partners is seeking liked-minded groups.

"We do look for organizations that mirror or abide by our same ethos of honesty and transparency—just truly dialed-in operators," she says. "We tend to favor small, family-owned operators like ourselves because we do find that they take more care and pride in what they're producing and distributing."

Stone Road also undergoes a rigorous vetting process for each potential partner.

"We always make sure that we physically visit their facilities in person and meet them because, for example, we can tell a group that they can't use shake or trim in our products, and we've heard, 'Oh yeah, we never use shake or trim,' but if we go to their facility and see 500 pounds of shake or trim, they're using it," she says. "We look out for those red flags."

Wheeler says she and Lex also leverage their extensive network to vet potential partners.

"If we haven't got a scoop on a certain organization, we can ask people within our network and get other people's opinions on how they are as operators," she says. "Really, [it’s] just being able to sift through the smoke and mirrors."

Before entering a partnership, it is also crucial to establish a comprehensive workflow and clearly define the responsibilities of each party involved, she says.

"Over the last year, we have had challenges sometimes getting in touch or getting responses from partners," she says. "Now we know entering into new partnerships [that] we want to have a standing call at least once every two weeks to be able to figure out what's working well, what we need to work on, how we can help, [and] all that good stuff."

Don’t Overestimate the Power of a Strong Brand

Developing an authentic and memorable brand that consumers can trust can contribute to a successful expansion and can help increase market share and sales, build credibility, and more.

"Right now, there are very few [brands] with a serious national presence that most people know," Wheeler says. "Cookies is probably one of the three that I would say at least people have heard of. … [I think] brands will start solidifying themselves as mainstream.

"As soon as federal legalization happens, that's when it's going to become very apparent how much power [a brand] has, especially if they allow things like interstate commerce and we're able to ship our farm flower to new markets. That's going to be crucial."

Know the Market

Before entering a new market, it's important to conduct a market analysis to understand the market dynamics, including its growth potential, trends, opportunities, demographic, gaps and competitive landscape, Wheeler says. Understanding these areas of the market can help you make informed business decisions and develop an effective strategy.

For example, knowing the market's demographic profile will help you create products that align with the specific needs and desires of the consumers in that market.

RELATED: How Stone Road Farms’ Lex Corwin and Blake Kelley Work: Cannabis Workspace

"In California, we have 80 unique SKUs at any time," Wheeler says. "We don't launch our full portfolio as we enter new markets. We look at the market to see which SKU categories are underrepresented or where we would fit in nicely. We are strategic up front. I feel that many brands lose money entering these new markets trying to roll out their full suite of products. Even if one or two don't sell, you've lost money for the next year and a half in that market. Do your research and understand what you're getting into."

For example, Stone Road is in talks with a couple of groups in Ohio; however, the current law prohibits using medical cannabis by smoking or combustion but does allow vaping.

"It has to be extracted or edibles, basically anything that's not smokable," she says. "We've found a little workaround where we can keep our signature half-ounce pre-ground pouch, but for that market, we're going to infuse it with our solventless bubble hash, which we don't do in any other market. … Being able to tailor our SKUs to fit [each market] and understanding where the gaps are in each market [is crucial].

Measuring Success

Despite being a small two-person team, Stone Road has successfully entered two new markets this past year.

Wheeler says their primary measurement of success lies in Stone Road's ability to continue engaging in conversations with potential new markets while juggling its other markets.

"We make sure we're moving the needle forward," she says. "There are some markets where we know that right now isn't the best time, but we're still consistently gathering data and strategically trying to plan when it will be the perfect time for us to enter the market."