EXCLUSIVE: KCSA President Todd Fromer Discusses Support For Cannabis Industry And Weed Stocks

KCSA is a strategic communications firm that offers public and investor relations and social media services.

Founded in the late 1960s, the company works with many companies valued under $500 million, providing strategic communications that are tailored to their current and future needs, including access to funding.

“The firm has three legs, investor relations, public relations, and social media,” explained exclusively to Benzinga, Todd Fromer, KCSA  president. “In 2022 we had a big flight to quality, investments are moving towards bigger names, larger market caps, and it is difficult for small-cap companies to reach out to institutional investors. That is why retail investment has become such a big deal in 2023.”

Benzinga is featuring KCSA and other innovative companies in the cannabis industry to celebrate their excellence. After the overwhelming success of last year's 4/20 business event, the Benzinga Cannabis Capital Conference is returning to Miami Beach on April 11-12, 2023, with events taking place simultaneously on two stages at the historic Fontainebleau Hotel.

Investor Relations

“There have been billions of dollars of retail money flowing into the stock market in 2023. We made a digital transition to attract retail investment for our clients, and we do that through a combination of traditional investor relations tactics and digital strategies,” Fromer added.

KCSA offers a digital investment service that uses a systematic approach to drive retail investment into its clientele.

The program is structured around quarters and includes videos, earnings presentations, investor decks, shareholder letters, and social media messaging to reach millions of retail investors and provide them with the information they need to make informed investment decisions.

The Time Of Retail Investors

Fromer says regulation is necessary for the success of smaller cannabis companies as they need to raise funds through the institutional market. Without proper regulation, raising money becomes difficult, making it expensive for these companies to raise capital.

“Without regulation, you're going to be stuck,” he said. “It's a difficult sell these days. So the money becomes very expensive.”

Fromer anticipates a cycle where cannabis companies will have to raise expensive money, which is typical. He advises investors to focus on retail as it will drive volume and share price appreciation. “Where investors on the cannabis side can benefit from this is, focus on retail.” 

If a company is going to raise money and it's going to be expensive, it's better to do it with a higher share price and more liquidity in the issue, according to Fromer.

“My general sense is investors and owners of cannabis companies, and CEOs need to start turning their attention to the retail market now because the money in the institutional market is hard to come by.” 

Royalty Program

The financial aspects of the cannabis industry are currently unclear. However, the industry has shifted from being solely focused on medical purposes to the packaged goods industry.

Any packaged goods found in grocery stores today may potentially contain THC or CBD in the future. From Oreos to goldfish crackers, and frozen TV dinners all kinds of food and household products could potentially be either infused with THC or CBD or made of hemp.

KCSA launched a division dedicated to beauty and wellness in 2023, to expand the agency into consumer PR. By promoting a narrative of wellness and sustainability, the beauty and wellness angle can also help make the cannabis plant more widely acceptable to public opinion.

Fromer mentioned that KCSA was looking for individuals with consumer capability and hands-on experience for their beauty and wellness division. They have a unique loyalty program and stumbled upon Michelle Aselta, who had experience and a stable of clients in the beauty and wellness sector, making her senior vice president. 

“We allow our people to participate in the account. You receive 20% of that client's fee in perpetuity as long as we keep the account. We are attracting the most talented senior executives that would love to leave their agency and start their businesses with our experience and support,” Fromer explained.

Doubling Down On Cannabis

Fromer noted the values of cannabis stocks are very low, making it an opportune time to invest. The profit potential is vast because the companies that are still in business are experiencing an increase in revenue.

He highlighted that these companies are not getting smaller. In fact, they're selling more cannabis than they did in the past and the trend is expected to continue.

“Anyone who's been around cannabis for the last couple of years knows this is as bad as it's been. Yes, sure. But how much worse? I mean, for God's sake, this is the time to be investing. That's why I say 'double down.' As I said earlier we're investing in cannabis. We are doubling down,” concluded Fromer."

Join us in April at the Benzinga Cannabis Capital Conference and stay at Miami Beach’s historic Fontainebleau Hotel. Don't miss out on a chance to hear about future market forecasts and worldly advice on investing and finance from those embedded in the cannabis industry. Are you ready?

Buy your tickets HERE before prices go up. Book your room HERE.

Photo Credits: Janon Stock on Shutterstock and photo courtesy of KCSA.