The importance of branding in the emerging cannabis market

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Courtesy of Lift Magazine

The interactions and memories between a customer and a company form a conceptual model in the customer’s mind. This is the brand. Branding is not specifically the “attractiveness” of a product. A brand is a mark that represents experiences, trust, and the values of the company and their products. “Attractiveness” is subjective. One brand will be attractive to some and repulsive to others. Some prefer Tesla, and some prefer Chevrolet.

The Canadian Cannabis Legalization Task Force released its report to a collective sigh of relief from many industry members. The Task Force did their homework, and have made recommendations using research and reason, and overall, it’s well done.

But the branding and packaging recommendations have alluded to the potential for “packages without any distinctive or attractive features and with limits on how brand names are displayed.” If this sentiment is pushed to the limit, as is done with tobacco in Australia, it will miss an opportunity to uproot illegal cannabis. According to one of the prime directives of legalization, this would be a mistake.

It’s worth noting that regardless of the rules and regulations set, great brand leaders will rise to the challenge and excel under any model. They will find unique ways to set themselves apart and win the hearts and minds their customers. The more restrictive the regulations, the more creative the winners will need to be to set themselves apart. These companies will see success, but their impact will be limited in the quest to shift Canadians from black market cannabis.

The intent of Health Canada is not likely to create competitive advantages for great marketers. Their intention is to disrupt black market cannabis, and ensure cannabis production and use are responsible and within the laws. It is not only the first-order effects of policy that should be considered, but also the second and third orders. Strategic allowance of branding measures will better implement Health Canada’s desired outcomes.

When Health Canada allows a legal marketplace for recreational cannabis, less desirable products will be driven out as consumers purchase products with the highest perceived value. If a cannabis product is recalled for poor production practices such as containing mould or pesticides, Health Canada should want that brand to face adversity and lose goodwill. Trust and loyalty from good production practices only matter when products can be distinguished on a shelf. If all packages look the same, there is no feedback loop to incentivize producers to care.

Cannabis consumers care deeply about product selection. They are looking for information that will guide them to the strains and producers that work for them. If information about strains is withheld, including reference to taste and smell, they will likely turn to places where the information is present. This would lead to a competitive disadvantage for legal cannabis.

Pushing packaging to conservative limits has achieved results in the tobacco industry, but simply using the lessons of tobacco and folding them into cannabis is misguided. The differences between the products are significant.

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