How one CBD CEO is using transparency in marketing to reshape the industry

PotNetwork Holdings, Inc. CEO Kevin Hagen knows a thing or two about the CBD industry, with his company’s wholly owned subsidiary, Diamond CBD laying claim to over a dozen brand name products from oils to edibles to vapes (Full disclosure, PotNetwork Holdings is the parent company of PotNetwork News). The former Diamond CBD president, who took the company’s top spot late last year is also familiar with the fickleness of the internet, having weathered both good media and bad.

Through it all, however, Hagen has remained steadfast in one guiding principle which has kept his company on top.

“Transparency,” he told PotNetwork News recently. “ While our mission is always to satisfy customers, our goal is to remain transparent, which, in turn, we believe will uplift the entire CBD industry.”

[How to assemble a multinational, vertically integrated, multi-brand cannabis conglomerate, with Weekend Unlimited CEO Paul Chu]

With the barrage of social media and fake news available to consumers, transparency and authenticity is now a cannabis or CBD business owners best way to gain brand credibility. Over-reliance on catchy slogans and slick marketing campaigns could easily become fodder for online backlash or mob justice should consumers feel they are not genuine. Customers demand authenticity from the companies to whom they give their hard-earned dollars.

“I learned a long time ago that no matter what else I do in this business, I won’t survive without being transparent,” Hagen told PotNetwork News.

Cannabis industry beware: The numbers don’t lie

Edelman’s annual Trust Barometer (yes, that’s a thing) found that trust in business fell below 50 percent in about half the markets surveyed for its annual study in 2015. The all-important millennial demographic — the one group that every company desires— prizes authenticity more than most. In fact, according to a study from Boston Consulting Group only loyalty discounts rate higher than authenticity for millennials.

“It’s easy to say you’re a transparent or authentic brand,” said Hagen. “But for consumers to see you as such is a completely different thing.”

At Diamond CBD, management realized they needed to do more than just tell customers who they were as a company. Instead, Hagen told PotNetwork News, they had to show the people their true selves.

[Transforming the CBD marketplace: PotNetwork’s exclusive interview with Youngevity President and CFO Dave Briskie]

The company was always dedicated to enacting state-of-the-art quality control innovations and utilizing them to their full potential in an industry-leading quality assurance effort. But recently, they decided to take things much further.

“What we did, is we enlisted the help of some of the country’s top independent laboratories and had them perform a confidential assessment of both our products and our labeling practices,” Hagen recalled. “Product experts, scientists, and more helped us come up with transparent processes that we believe will set the standard for the CBD industry.”

Along with third-party independent lab tests for all of their products, Diamond CBD puts Quality Seal Holograms on every label, makes lab reports available throughout their website, and adds QR codes and expiration dates to everything.

“Our consumers know just as much about our products as we do,” said Hagen.

Stop being clever, start being transparent

Since the passage of the farm bill late last year, the cannabis and CBD industries are now overflowing with competition, and the numbers are only expected to grow throughout the next few years. And although marketing and communication teams are the cornerstone of any organization, cannabis businesses still need to be honest and useful in their tactics.

“Remember,” Hagen said to PotNetwork News, ”most people are using these products for health reasons of some kind, be it pain or sleep issues, or whatever else it may be. Transparency isn’t just a marketing tool; it’s a necessity for our customer base.”

[As CEO, CannAmerica’s Dan Anglin wants a piece of the hemp and CBD market. As a Marine, he wants veterans to have access to cannabis too.]

Of course, teaching authenticity is a tricky thing, as either a business is authentic, or it isn’t. But even if the cannabis industry finds the idea silly, they may have to succumb to the necessity. And really, any small business can take steps to adapt their marketing tactics to become more authentic.

Customers know when a company isn’t being transparent. Those in the CBD industry, for example, can simply say they care about the health and wellness of their customers, or they can perform the testing and provide the package labeling necessary to show their customers that they actually care.

“At PotNetwork Holdings and Diamond CBD we’ve built a successful business on being transparent not because it’s good marketing, but because it’s the right thing to do,” said Hagen. “Do the right thing, and success will usually follow.” 


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