Branding is the absolute foundation of any long term successful business. It’s why you choose Coke over Pepsi, or Dominos over Papa Johns. There is NO DIFFERENCE when it comes to mary jane. Even though we’re still in a grey market area, & it’s a totally new industry, companies that put branding first and foremost as their foundation are positioning themselves leagues ahead of their competition.
Cannabis branding is a crucial strategy to build legitimacy and interest that will drive recognition and repeat sales. Previously the image of marijuana arouse connotations of fringe group slackers and black market activities. As legalization is becoming mainstream, so too is the capacity for marijuana.
Cannabis branding will bring greater legitimacy to the industry and offer trust for new patients and consumers. The way cannabis products are presented needs to be sleek and professional to appeal to an increasingly sophisticated market and to break these negative perceptions. As many different entrants to the cannabis industry emerge, it is increasingly important for brands to express their niche and how they differentiate from the rest.
Your Brand Should Declare Trust
“[In marijuana branding], there is nothing more important than building trust,” says James Kennedy, founder of Apothecanna, tells Co.Design. Advocates have fought long and hard for these business relationships to be able to exist. Now that they do, cannabis branding needs to present the same level of professionalism that is expected out of any other legitimate industry.
Whether or not you are branding a dispensary, the products located in there should look as if they belong. This means that they will be curated and expected to have the same degree of professional, sleek branding as the stores themselves.
Cannabis product features
Cannabis mostly has “experience” and “credence” features. Consumers can’t evaluate a product’s high and side effects until they smoke it. Even afterwards, they won’t know how much tetrahydrocannabinol (THC) and cannabidiol (CBD) it contained, or whether it had traces of pesticide or mould contamination.
Those are real concerns. Pesticides and mould are not unusual in black-market products. Even legal Canadian medical cannabis producers were forced to recall products this year.
Government regulation can help prevent those unseen factors from harming consumers. That includes standards for allowable pesticides and rules about testing frequency.
In the quality field, such regulations are part of “conformance quality.” They enforce key product minimums and maximums.
But quality isn’t just about avoiding the bad; it also involves creating the good. This is part of “design quality” — making products great, in other words.
For cannabis, design quality has many dimensions. What are the best THC and CBD levels? What is a high-quality high? Should it be smoked or eaten? How do these preferences vary among consumers?
Branding informs consumers
The complexity of cannabis’s “credence” and “experience” features make product branding important. Branding can be done via distinctive logos, packaging and advertising. This helps firms explain their products to consumers.
With cannabis, recognizable brands could help consumers find the best product for their needs. Different customers may want a mild buzz, a powerful high or more medicinal benefits.
Good branding also builds trust. Consumers learn which brands consistently meet their needs.
That’s one advantage legal cannabis could have over illegal. Consumers won’t need to risk unpredictable results buying on the street. They could learn to rely on consistent effects from known brands.
Branding will become even more important with edible products. Those are more complex, combining features of cannabis and food.
Insights for Dispensaries: How to Build Customer Loyalty
Despite what many believe, legal marijuana doesn’t just sell itself. Legal cannabis dispensaries are considered by many to be a gold mine, as they are in most circumstances capturing an untapped market where product demand already exists. What more could a new business ask for, right? However, in addition to the regulatory, banking, distribution, taxation and insurance issues dispensaries have to deal with, they must compete with the already vibrant black market and increasing competition from other dispensaries. As competition grows in many of the key cannabis markets, it is important for dispensaries to build a loyal customer/patient base if they want to survive.
Approximately one-third of patients/consumers are highly loyal to their dispensaries, having used only one service or store over the past twelve months. More than half of patients and consumers have sought products from at least one other dispensary or delivery service over the past year. A very discerning 13% of consumers have shopped in five or more stores, and some in greater than 10, within the same time period.
Among both recreational consumers and medical patients, older generations are much more likely to be loyal to their dispensary or provider, with 60% of those over 55 having used only one store or dispensary´s services over the last 12 months, and 38% having shopped at between two and four during the same time period.
… Medical Patients are Not
Medical marijuana patients tend to be somewhat more selective and less loyal than recreational consumers, with 23% having purchased at only one dispensary or store and 58% having shopped at 2-4 over the last 12 months. The most discriminating shoppers among medical patients are those with spinal cord injuries, fibromyalgia, glaucoma and nausea – whereas patients with cancer, PTSD, and severe or chronic pain tend to be more loyal to one shop or service.
Related: How to Start an Online CBD Business
Geographically, consumers from states where medical marijuana was recently legalized, such as Massachusetts (MMJ legal since 2012) and Michigan (MMJ since 2008), and those from Maine (MMJ since 1999), demonstrated more loyalty to their stores and dispensaries, with approximately half of survey respondents from each state indicating they had only used one store or dispensary in the last 12 months.
Interestingly, those from states with more established markets such as California (MMJ since 1996), Colorado (oldest recreational market, MMJ since 2000), and Oregon (MMJ since 1998) were substantially less likely to exercise loyalty to one store, with only 27-30% of users having visited only one store or dispensary over the last 12 months. Seventeen percent of respondents in California and Colorado have used five or greater dispensaries or services over the past year.
Quality is Key
High quality products are the most important priority for over a third of users, with price as well as convenience of location bearing great importance as well. Relatively few users (9%) chose knowledgeable budtenders as the most important criteria in selecting a dispensary.
Marijuana users, particularly those of the younger generations, are not a naturally loyal bunch when it comes to dispensaries and dispensaries will need to work hard to not only bring them in but to keep them coming back. Stocking high quality products is of the utmost importance to consumers, many of whom are willing to pay steep premiums for organic or lab tested cannabis. While few users cite the product selection as a key determinant of their dispensary selection, it is one of the main drivers for people to switch from purchasing from the black market to the legal market, so dispensaries should pay careful attention to their product portfolios. Despite gains from edibles and concentrates, flower remains popular with the majority of cannabis users and dispensaries should maintain a solid selection of high quality flower, alongside their selection of infused products.
In conclusion, retailers & cannabis companies that are able to utilize effective branding with a clear messaging, & demonstrate that through their website are more likely to retain clients, grow their customer base, & position themselves for long term success.