In this episode of the How to Cover Money podcast, Megan Calcote reviews some of the tips on covering the legal marijuana industry that was originally shared at Reynolds Week 2016. The tips include the importance of highlighting the industry from a business perspective, including consumer trends, new businesses, and ancillary services, and the impact on the local community. These tips come from Ricardo Baca, editor of The Denver Post’s website The Cannabist; and Kevin Dale, executive editor of Arizona PBS’s Cronkite News, who directed pot coverage as a top editor at the Post.
This is the first in a three-part series on covering the marijuana industry. Be sure to listen to part 2 and part 3 after this episode.
Transcript
[Intro music]
Megan Calcote: How to Cover Mone: Covering the business of pot.
Ricardo Baca: As a news organization, I think we owed it, or you will owe it if your if your state does this to cover this from the business perspective, that’s where some of our biggest and best stories have come.
Calcote: Hello and welcome to the Reynolds Center podcast. We are coming to you from the Donald W. Reynolds National Center for Business Journalism, based at the Walter Cronkite School of Journalism and Mass Communication at Arizona State University. I’m Megan Calcote, host of the How to Cover Money podcast. Today we begin Part One in our discussion on covering the business of the marijuana industry. Cannabis is classified as a controlled substance by the Drug Enforcement Agency and is classified as a Schedule One drug, according to the DEA website, Schedule One drugs, substances or chemicals, are defined as “drugs with no currently accepted medical use and a high potential for abuse.” Schedule One drugs are the most dangerous drugs of all the drug schedules with potentially severe psychological or physical dependence marijuana. Schedule One classification listed among drugs such as heroin, LSD and ecstasy. In spite of this classification, the District of Columbia and 23 states have laws in place allowing some form of legal marijuana. In Alaska, Colorado, Oregon, Washington and the District of Columbia, it is legal to use cannabis for recreational purposes. Several states look poised to follow. As support for legalizing marijuana increases, it’s become an important industry for business reporters to cover. We invited Ricardo Baca, editor of The Denver Post website, The Cannabist, and Kevin Dale, executive editor of Arizona PBS’s Cronkite News, who also directed pot coverage as a top editor at The Post, to discuss their approach to covering this new industry as it emerged in Colorado.
Kevin Dale: So a few months before the legalization of marijuana, in January of 2014 I was just thinking about how would we serve this audience? And we had been doing, we had medical marijuana for a long time, and we’ve been doing a lot of stories around the efficacy of that and the regulation and the doctors and the prescriptions, etc, and it was all more of hard news reporting. But I knew with legal weed that we also needed to write about the culture and the consumer issues and the and the news of it. We approached Ricardo, I think we surprised him a little bit with the suggestion, but we just pitched it to him as, hey, here’s a great way to for us to get in front of a brand new industry that was being touted as a billion dollar, it would be a billion dollar industry, and it was clear that we needed to put the muscle of our newsroom behind that. And so we said to Ricardo, “Hey, what do you think?
Calcote: Once Ricardo signed on, they started covering the emerging market in Colorado. Dale and Baca soon realized there was a lot to cover from a business perspective.
Baca: This is an industry, just like any industry that’s out there. I think there’s more consumer news to be done here than the auto industry. I mean, all that consumer news has sort of been done and, and there’s, yeah, there’s ongoing recalls and safety issues and and reviews of cars and such. But here what you have is, you have an entire population that is curious about this. One of the things in Denver, we found were, yeah, a lot of young kids were going to the shops, but lawyers were going to the shops because it’s legal now, and bankers were going to the shops, and older people who wouldn’t try it because it was illegal now say, “Hey, I did in college. Now I can do it again.”
Calcote: As recreational laws become more mainstream in states across the country, you may see similar trends in your area. Customer profiles are just one type of story you can cover. There are also great stories to tell about the new businesses and business owners entering the legal marijuana market.
Dale: These guys have achieved a certain level of success, many of them. And some of them have become a parody of themselves, or a parody of other corporate worlds that are more traditional. All the stories that you guys write on a regular basis, I think are oftentimes applicable to what we’re doing here. We have seen tremendous successes, but we’ve also seen epic failures. Just recently, I wrote about one of the most successful cannabis testing facilities in Colorado, and how they just imploded after going public on the OTC market, and ultimately closed down and laid off 18 people. I’ve written about other layoffs. So when you think about the things that you’d cover in traditional business reporting, they absolutely should apply to this and and we’re proud of our coverage, that we’re out there, of course, covering just what’s happening, whether it’s good or bad for the industry.
Calcote: As the cannabis business flourishes in Colorado, many ancillary businesses are springing up. As you’re about to hear from Ricardo, there are many interesting security services being provided to marijuana businesses.
Baca: You think about a business writing, think about the first story that we wrote on security companies in the cannabis space. At first, I thought it was a joke. Seeing all these companies come out saying we’re doing security for marijuana, “I’m like, God, they’re really kind of jumping on the bandwagon. Is this legit?” Now you have multiple companies out there, armor trucks, ex-military, ex-law enforcement.
Dale: Armed.
Baca: Armed, of course, and it’s turned into this amazing story, because the cannabis businesses want and need to work with these agencies, and these agencies are flourishing.
Calcote: In addition to support businesses, there’s also been a big impact on local real estate.
Baca: The commercial real estate industry in Colorado has taken off, and there are groups that say it’s all because of cannabis. One in 11 buildings in Denver have marijuana grows in them. 35.8% of industrial space leased in Denver since 2009 has been for cannabis. 3.7 million square feet, and that’s caused the lease rates to jump, and people claim a shortage of warehouse space. There’s some debate back and forth about whether it’s all due to cannabis, but again, that’s where that’s where your contextual reporting comes in.
Calcote: As sentiment about legalizing marijuana continues to change, you may find yourself covering the industry as a business reporter. There may be some mixed feelings about covering the substance from a business point of view, but as you’re about to hear, there’s a lot of important news to cover when it comes to legalizing pot.
Baca: There’s also very serious news to be done here and The Post, certainly, we’ve got tons of phone calls criticizing us, saying that we were pro-pot, saying that we were promoting people going out and getting wasted. And what we told them is, no, we’re looking at this from 360 degrees. This is going to sweep across the state, whether you like it or not. 67% of the people in Denver voted to make it legal I believe was the number.
Dale: It was 56 statewide.
Baca: Statewide as news organization, I think we owed it, or you will owe it if you’re if your state does this to cover this from the business perspective, that’s where some of our biggest and best stories have come.
Calcote: There are many different business angles to cover in the marijuana industry. Today, we’ve just scratched the surface. We’ll revisit this topic to discuss cyclical sales patterns and the unique banking challenges of the business. I’d like to say a big thank you to Ricardo Baca and Kevin Dale for presenting these insights during Reynolds Week 2016 and thank you listeners for tuning in to another episode of the How to Cover Money podcast. If you plan to attend SABEW 2016 you can hear more on this topic from Ricardo and Kevin at our workshop covering the business of pot on Friday during the conference. And if you want to learn about social media marketing, I’ll be presenting a webinar in partnership with our friends at Media Shift on how to automate social media. Visit businessjournalism.org to find more information on both of these training opportunities. If you’re in need of more business journalism training, the Reynolds Center can help. Visit businessjournalism.org to find articles and self-guided training, download our free eBook: Guide to Business Beat Basics, or sign up for our monthly newsletter. The newsletter will keep you up to date on training opportunities from the Reynolds Center year round. If you enjoy the How to Cover Money podcast, make sure to subscribe on iTunes, Stitcher or SoundCloud, and while you’re there, leave us a rating or a review to help make the podcast more visible to other business journalists. Support for the How to Cover Money podcast comes from the Donald W. Reynolds National Center for Business Journalism. Join us next time when we’ll continue our conversation on covering the business of the marijuana industry.
[Outro music]
