The recent legalization of recreational cannabis has some California entrepreneurs feeling like they are living in a modern-day gold rush. With so many potential new consumers willing to buy and try legal cannabis, producers and ancillary companies have a unique opportunity to realize big profits in this young industry.
As with any industry, there will be winners and losers in the marketplace. Brands that recognize the coming realities of commoditization and competition, and act strategically, will increase their chances of thriving. Brands who take it for granted that their product or service will automatically fly off shelves may be unpleasantly surprised as sophisticated consumers are presented a multitude of choices.
We recommend a few branding basics for any organization looking to flourish in the marketplace, and ensure the long-term success of their cannabis brand.
1. Know your brand’s audience
This is a basic concept that warrants mention. Effective marketing requires understanding who you want to reach so that you can craft your message accordingly. The new consumers of legal cannabis are not an established and well understood audience. Cannabis companies will need to develop branding, messaging, and design that reaches people they may not have previously considered.
New users who would not have bought cannabis prior to legalization represent a massive opportunity for sales. These individuals will be from various ages group and backgrounds, and will be motivated by numerous factors. It’s unlikely that the majority will respond to messaging focused on a stereotypical “stoner”. Sure, there will be a place on the retail shelf for products endorsed by hip hop stars, aging celebrity hippies, and other outspoken marijuana advocates, but there’s huge opportunity for other brands–brands that speak authentically and thoughtfully to the myriad of benefits cannabis can offer users, and who establish their own unique tone that resonates with the people they want to reach.
2. Differentiate your brand
As the cannabis industry matures, many consumers will perceive fewer and fewer differences in the products themselves. Although there will be connoisseurs who understand the nuances of various brand’s offerings, a majority of new consumers will not be able to identify what makes one company’s edibles better than another company’s edibles. (Or extracts or flowers for that matter.) Companies who hope to compete will be faced with the challenge of how to convince shoppers that theirs is the cannabis to buy. Strong branding and packaging will be critical in motivating a purchase decision.
Brands that establish their unique personality with consumers will win in the marketplace. Those who take the time to define their principles, purpose, and promise–and build their brand messaging and marketing materials on that solid foundation–can better communicate their authentic differentiation, and win over consumers as a result.
3. Build your brand to last
As legalization becomes the new norm, there will be many brands launching quickly, trying to cash in on the large new market. Those who hope to stand out and create lasting profits must take a long view. Brand building is more of a marathon than a sprint.
Like any company in a mature market, cannabis brands who hope to win will need to make and nurture meaningful connections with their consumers. This is a long term branding effort that requires communicating brand and product benefits clear and consistently over time. Company leaders will need to be and stay engaged in the expression of the brand. They must hold their marketing up to high standards that are aligned to brand’s ethos, and check in often to be sure the message is staying true.
The opportunity to create value and profit in the cannabis space is here. California is by far the biggest market for cannabis, and more markets will be coming soon. Know your brand’s audience and share your brand story in creative ways. Establish your company’s brand foundation from the start so that you can stay the course and reap the rewards.
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