Cannabis companies love to brag about the latest hot-shot executives they’ve poached from the mainstream economy. It legitimizes their mission and industry. One of this year’s big arrivals was Peter Horvath, the former COO of Victoria’s Secret, who is now CEO of cannabis maker and distributor Green Growth Brands. He spoke to Quartz about how selling lingerie prepared him for the marijuana business, where hundreds of competitors are basically all selling the same product.
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This interview has been edited for length and clarity.
Quartz: What did selling bras teach you that’s going to be relevant for selling cannabis?
Horvath: It’s really not about cannabis consumers, it’s about consumers. The product is an important detail, it’s an essential ingredient, but it’s not the recipe. The market has identified a product, but you need some way to sell it. The existing market is very immature, young, and moving fast. They don’t have experience cooking the way we do, to stick with this one crazy metaphor. We are Michelin star chefs.
Yeah. In 1985, the bra market was comparable to the cannabis market today. Bras were something women bought maybe three times a year, they tended to be white, and they were bought in the foundation department of department stores. They cost maybe $16 each. Now, after putting the Michelin star chefs in the mix, the average woman buys 10 or 11 bras a year and can pay $36 or more.
The first thing [for the bra industry] was positioning the brand to be more emotional and less functional. The functional aspect was a foundation, something that just held you together underneath your clothes. Les Wexner (Chairman and CEO of L Brands), who was one of my mentors, said, “I think women deserve lingerie,” a term which wasn’t broadly used back then.
The functional performance of [a Victoria’s Secret bra] accentuates who she is, and brings out the best of her. If she feels a certain way, she feels confident, she feels empowered. That was ultimately what was going on behind all the stitches.
How can you bring that to cannabis, which isn’t necessarily associated with bringing out the best of you?
I don’t know about that. [Currently available products] are probably the crudest versions of the product that we’re ever going to see, because it’s only going to become more sophisticated, more acceptable, and more relevant to consumers. That’s the product piece.
How do you differentiate yourself from everybody else? It’s got to be on an emotional level. What that means is that you can’t expect consumers to be forced into getting a PhD in the benefits of a product. You need to let them opt into the level of education that they want.
Basically, we’re experts at building assortments, presentations, running stores, and guiding staff so that they can read the needs of the consumer and meet the consumer where they want to be met, so that each consumer can individualize their interaction with our brand.
Five years from now, what does that connection with consumers look like for cannabis?
Emotion will be part of it, that’s an element. Function will be part of it, and function can sometimes be about the product, or in the case of Casper Mattresses or Warby Parker, it’s about a different way to transact.
With Amazon, which is a marketplace, not a product and not a retailer, the thing that people like the most is that all they have to do is press a damn button and they get access to endless assortment, and the transaction is easy. It’s like almost scarily too easily. Believe it or not, that’s a functional thing that kind of bridges emotion. That’s part of loyalty.
For cannabis, it’s as simple as if every time the consumer comes into your cannabis store, everything that they loved about the store last time is there, so you’re getting consistency, plus there are things that are new and exciting and surprising. What’s even better is if there’s familiarity in terms of the staff. You know the staff, you trust them, they know you. You feel like they know you.
It’s like a dance. Basically, all these things connect. They all make it easy for you to swim downstream and earn loyal customers and deliver consistent experiences with surprise and delight every time. It’s hard to do.
What do you make of tobacco giant Altria’s recent investment in Canadian marijuana company Cronos?
It’s the same event as liquor company Constellation buying into Canopy. It’s US consumer package companies that cannot participate in cannabis in the US placing bets on Canadian companies, hoping that either through export to foreign countries, which is very limited, or the legalization of cannabis in US states, they have a toehold that allows them to dominate the market when the US gets federally legal.
Do you think it’s bad for the industry’s image to be associated with tobacco?
I don’t know. That’s a tough question. Maybe it’s a way to say, “Wow, the tobacco guys are finally getting away from the evil stuff and moving on to stuff that promotes more wellness.” I’m guessing that if you smoke cannabis, it’s not as good for you as if you take it other ways.
That’s the general consensus.
Cannabis basically will be a healthier alternative to alcohol. I feel like tobacco isn’t used for the same purpose as alcohol or cannabis, so for me, tobacco has always been an outlier.
Do you use cannabis?
Yeah, I’m a new user.
What have you gotten into?
Well, I’m very purpose-driven. What I use it for is when I get a text message at 11:00 at night, and I’ve already fallen asleep on the couch, and I’m trying to keep that sleep mode going by moving to bed, and it’s like, “Don’t read the text message,” and I do.
Then it’s like, “Damn it.” Then what I have is an indica vape pen and I take two hits of that and I usually sleep like a baby, and I feel really good in the morning. That’s this 61-year-old former distance runner endurance athlete who’s never wanted to smoke anything.