For the past several years, we’ve been watching the rise of cannabis brands, but as the industry inches closer to federal legalization, it won’t be long until we see full-scale national cannabis brands become part of our cultural lexicon – just like Coke, Uber, Amazon, and Google.

We’re already seeing cannabis brands cross state borders in creative ways – through mergers and acquisitions, by winning new licenses, by entering partnerships and licensing agreements, and more. However, it’s only a matter of time until federal legalization happens, which will remove significant obstacles that currently make it difficult and expensive for cannabis brands to grow and scale across the country.  

With that future on the near horizon, let’s take a look at five key factors that matter most to the rise of national cannabis brands.

Differentiation

Research shows that “brand” is only important to 47% of U.S. cannabis consumers when they choose a cannabis product today. Stated another way – more than half of U.S. cannabis consumers don’t care about what cannabis product brand they buy. 

There are a few reasons why branding isn’t essential to cannabis consumers yet. Specifically, since cannabis isn’t legal at the federal level, consumers don’t have a lot of product options, and of the products that are available at their local dispensaries, most or all are from in-state cultivators and manufacturers. 

Today, consumers are more likely to choose cannabis products based on three factors: 1) product efficacy, 2) product form, and 3) what the budtender recommends. Brand plays a much smaller role in the purchase decision when the options are limited to local, craft products.

When cannabis is legalized at the federal level and cross-border competition begins, branding will become much more important. With more choices, consumers will compare specific differentiators and benefits between brands, so the cannabis producers who are investing in brand development today are the ones that will win in the national marketplace of the future.

Product Consistency 

Branding is all about consistency – from a consistent product to consistent experiences, consistent messaging, and everything in between. For a national cannabis brand to scale effectively, flower and manufactured products must be transported across state lines so products bearing the brand name are consistent from one state to the next.

Think of it this way. When you buy a Coca-Cola product in one state, it tastes exactly the same as it does when you buy that product in another state. National cannabis brands must deliver the same experience in all states. 

At the same time, costs have to be reduced across the supply chain to keep prices down for consumers. All of that is very difficult to do when cannabis must be grown, manufactured, and packaged in the state where it’s sold. 

Therefore, if federal legalization doesn’t break the state silos that fragment today’s cannabis industry, then it will be more difficult for national cannabis brands to scale simply because there will continue to be barriers to production consistency and cost reduction.

Digital Marketing 

Today’s national brands outside of the cannabis industry share something in common. They all rely heavily on digital marketing to connect with highly targeted consumers across the country. In order for national cannabis brands to develop, digital advertising and marketing restrictions need to change. 

Social media advertising and pay-per-click advertising are essential to national brand building, and national cannabis brands will be at a significant disadvantage if Facebook, Google, and other key platforms continue to ban cannabis-related advertising.

Search engine optimization and content marketing will also be crucial to national brand building as will high quality websites offering comprehensive online experiences. For any cannabis brand to become a national brand, the company behind the brand will need to invest in digital marketing with an adequate budget to meet consumers where they are with the best digital experiences.

National Brand Building Expertise and Experience

As discussed above, digital marketing investments will be critical to building national cannabis brands, and that means businesses need to invest not only in marketing initiatives but also in marketing and brand-building expertise and experience. In other words, to become a national brand, cannabis companies need to hire just like consumer packaged goods (CPG) companies do.

We’re already seeing these kinds of hires happening, and you can expect to see more in the future as we get closer to federal legalization. For example, companies like Cresco Labs, Cronos Group, Tilray, Parallel, and The Parent Company have hired CPG executives in the cannabis industry. 

This is a hiring trend that will continue, and many companies are already bringing seasoned CPG experts onto their teams. You can bet they’re strategizing opportunities to establish national brands.

Brand Integration Post Merger and Acquisition

In advance of federal legalization, many cannabis companies are already finding ways to start building national brands on a state-by-state basis. Cookies, Wana Brands, Curaleaf, Trulieve – these are just some of the companies across the supply chain that are pursuing various strategies to build a piece-meal national footprint. 

One of the most popular ways to expand a cannabis brand today is through mergers and acquisitions. However, mergers and acquisitions require a coordinated strategy to bring different products, marketing, processes, and licenses together into a consolidated, consistent brand. This includes everything from operational processes to combining online and offline brand footprints.

Bottom-line, companies aren’t waiting for federal legalization to start building their national cannabis brands. However, the process to jumpstart those plans requires strategic planning so brands are appropriately positioned for national expansion in a seamless and consistent way.

Key Takeaways About National Cannabis Brands

National cannabis brands are coming, but when they’ll have the opportunity to thrive remains to be seen. It will take federal legalization for full-scale national cannabis brands to become household names like Uber, Google, and so on. However, the seeds are already being planted by cannabis license holders in multiple states. Companies that haven’t taken steps to do the same are already falling behind.

To keep track of cannabis license holders across the United States, Canada, and international markets, subscribe to the Cannabiz Media License Database. Schedule a demo to see how a subscription can help you reach your business development goals.