Tobacco Business

[ 92 ] TOBACCO BUSINESS [ SEPTEMBER / OCTOBER | 21 ] Wortzel explains. “The first group would be the curiosity seeker. Knowing that hemp is legal, they wanted to give it a try. Based on the feedback we’ve received, they have tried the current products on the market, and the smoking experience didn’t deliver what they wanted. They moved on, and you’re likely not seeing a lot of repeat purchases here. This is a niche consumer and never represented the true opportunity for combustible hemp. “The second opportunity lies with the cannabinoid- conscious. This is a smaller piece of the market; however, it still presents a viable opportunity. This consumer is interested in things like CBD and CBG and would rather get it in a combustible form than, say, in a liquid, vape or gummy. The largest group is current cigarette and cigar smokers that are simply looking for an alternative. They enjoy combustion, but they don’t always want tobacco or nicotine. They want a satisfying change of pace. This is by far the largest consumer segment, yet no one has created a product for them yet that actually tastes good.” With an idea of what its potential customers are looking for in a product, Insurgent Ventures is launching with its first brand, Versa Hemp. This hemp product will be available in two formats: filtered smokes in a 20-count hard box that is similar in appearance to a cigarette box and a wood-tipped smoke packaged in a single resealable pouch. This smokable hemp product is available in original sweet, menthol and cherry, while the tipped smokes will be available in sweet, cherry and grape. “Versa is completely different from anything on the market,” says Wortzel. “We have combined the hemp with a special form of cocoa and then applied our proprietary flavorings and casings. We’ve eliminated the harsh, skunky aspects of hemp and created something that is much more in tune with a typical tobacco smoker’s palate. In short, we’ve figured out a way to make hemp actually taste good.” For Versa, Insurgent Ventures is using CBG-rich strains of hemp grown in Oregon and Washington state. This particular type of hemp is more expensive than others, but there are several reasons the company chose it. “The CBG flower has naturally low levels of THC, so it’s always federally compliant when it comes out of the fields. CBG flower also has lower levels of terpenes, the compounds that give cannabis its distinctive taste and smell. We wanted to play down those characteristics, because, again, it’s not what a typical tobacco smoker is looking for in a smoking experience.” Insurgent Ventures hopes that Versa will appeal to the millions of adult tobacco smokers who are looking for an alternative. Initially, Insurgent Ventures is focusing its sales efforts on smoke shops, head shops and discount tobacco outlets. “The majority of the trade is well aware of combustible hemp, but it is still a relatively new category,” says Wortzel. “Our research shows the majority of target consumers are not aware of combustible hemp. We want to be in stores where you can truly merchandise the product, and where there is enough time for us to engage with clerks and for clerks to engage with consumers. Having a product at the bottom of a busy tobacco set in a fast-paced convenience store is not the ideal environment to build consumer awareness. We feel convenience store distribution should wait until the brand is established.” While the plan is for Versa and other products from Insurgent Ventures to be available coast to coast, the company is focusing its efforts initially in the states of Florida, Virginia, Tennessee, Ohio and Colorado. This concentrated sales effort will allow Insurgent Ventures to work with stores where it can activate, something it wouldn’t be able to do if it were trying to launch in too many states at one time. Insurgent Ventures’ sales force will have a strong presence on the retail level. When activating a new account, the sales team will ensure the retailer is fully equipped and ready to move Versa—including merchandising, hanging signs, educating clerks, engaging with consumers and activating promotions. Outside of retail, Insurgent Ventures will be supporting its brand with local print and bar advertising, event marketing, and social media and coupon campaigns. Many of the retailers Insurgent Ventures is targeting already carry some form of combustible hemp. Many of these retailers saw some initial movement of hemp products and brands in their stores but noticed that there weren’t a lot of repeat purchases. In Wortzel’s opinion, this is because there are a lot of products that haven’t been made with the target consumer in mind—until now. “From the aroma alone, you will see that Versa offers a completely different experience than any other combustible hemp product on the market,” he says. As STG has done for years, the company is monitoring the regulations and changing legal landscape of the hemp industry. Insurgent Ventures uses its current internal and external counsels and has also retained a second external firm that focuses exclusively on cannabis to help ensure the company stays in compliance with local, state and federal laws. All of the hemp used in Insurgent Ventures’ products is tested for THC when it comes out of the field, and the blend is tested prior to production and once it is in the final product before leaving the factory. As the hemp industry begins to take shape, so are the laws and legislation involved with the category. “We are encountering some patchwork legislation at the state level. Ohio, for instance, has robust labeling requirements for combustible hemp, including a requirement to print THC and CBD levels directly on the packs. From the machine-made products we’ve seen on the shelves in Ohio, we are the only company that is actually in compliance with their regulations,” Wortzel explains. Though there are a variety of different hemp products currently on the market, including topicals, tinctures and food items containing CBD, Insurgent Ventures’ focus will be solely on combustible hemp products. Combustibles are what have made STG successful, and those products are what the company is good at, Wortzel says. Edibles and tinctures may be popular among consumers, but that segment of the hemp category is already oversaturated, making it unappealing for STG to enter into at this stage. The real opportunity lies in combustible products, and Versa will bring the company into a new category and era, but it certainly won’t be STG’s one and only brand and entry into the hemp industry. TB