A closer look at the evolution of brand marketing indicates that the weed industry still has a way to go.
In the dynamic world of cannabis, building a brand that will stand the test of time is a challenge for many reasons, including regulatory compliance.
Both Canadian and U.S. companies are still at the mercy of regulators regarding marketing and advertising. We are starting to see a few brands differentiate themselves in the California market, one of the most mature, but there is still a ways to go. At such an early stage in the industry, the brands that distinguish themselves from the competition and clarify why their product is better will win out in the long run.
To analyze the state of branding in the industry, we’ve come up with a five-stage model of brand evolution that can be applied to any cannabis market in the world. With it, we can see where the cannabis industry is now and predict where we think it’s going.
Stage One: The empty slate
The first stage involves unbranded goods, with little to no differentiation with the naked eye. Before legal retail cannabis existed, this is what most cannabis consumers were familiar with: getting your cannabis delivered in a tiny plastic bag. If you were lucky, you could find out what strain the product fell under, but beyond that, there was no way to differentiate one product apart from another.
An example of this stage is in Canada. Due to federal regulations that hamper marketing efforts, Canadian companies can display only particular parts of packaging, which is limiting.
More prominent brands in Canada like CGC or Aurora, that continue to conduct large-scale M&A, are losing market share to smaller producers like Auxly, Avant, or Noya.
At least for the time being, branding efforts in Canada are relatively futile against consistent quality products.
The nascent market in the Eastern U.S. is also in this first stage but slightly ahead of Canada. Due to erratic marketing and packaging regulations, many operators are “the only show in town” and either do not have the means to or feel a pressing need to invest in branding since they will make sales and margins on what they’re already selling.
These companies should be wary though, as legalization and interstate commerce become more of a possibility, well-established West Coast brands, which have heavily invested in brand building, will have a strategic advantage that could encroach on an East Coast operator’s market share.
Stage Two: Brand as reference
The second stage is where most of the cannabis industry finds itself now. This stage marks the emergence of mass production, giving customers more choice. Differentiation is the driving force, primarily based on packaging. A few brands have begun to differentiate themselves with their packaging, including Cookies, Kiva Confectionaries, Sonder, WYLD, and Wana.
Other brands are differentiating themselves by becoming hyper-focused on addressing specific problems that are relevant to their audiences. Brands like Dreamt and Pilgrim Soul built their whole brand around helping consumers sleep better or be more creative. These products will stand out in a dispensary, as new customers who may be unfamiliar with the actual properties of the plant can shop for desired mood states or distinct wellness applications. Brands can also use anecdotal stories that show how their hyper-focused products directly help customers.
To Read The Rest Of This Article By Narbe Alexandrian on Green Entrepreneur
Published: December 20, 2021
Founder & Interim Editor of L.A. Cannabis News