June 25, 2019
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The cannabis industry is growing and a recent report by Arcview Market Research and BDS Analytics projects that the U.S. cannabis spending will jump to more than $40 billion by 2024. That means in just five years, marijuana sales will quadruple. For cannabis businesses, competition to get those sales will be fierce.
As competition increases, the importance of branding grows exponentially. When consumers are faced with multiple choices in the marketplace, basic human psychology tells us they’ll choose the one with the brand they recognize simply because they feel more comfortable and confident buying it.
And when retailers (including cannabis dispensaries and retailers) need to decide which products to display on their shelves, they’ll choose the brands that are likely to drive the most sales. Those brands are usually the ones that consumers know the best.
For example, when Kiva Confections, a well-known cannabis edibles brand, launched a new product in 2018, nearly half of the retail stores in its network had already stocked and started selling it within four weeks. Why? Because Kiva Confections is a well-known brand that consumers like, and it has a history of sales.
The same is true in nearly every industry – brand matters, and in the cannabis industry, brand matters across the supply chain.
The key to developing a strong brand for any business, including cannabis businesses, is to first understand what a brand is not:
So then what is a brand?
A brand is a promise. Your brand promises something to consumers and sets consumer expectations. Strong brands meet those expectations in every customer interaction and experience. Brands that don’t keep their promises fail.
With that in mind, cannabis businesses need to determine why they’re in business, who their target customers are, and how they’re going to deliver something unique to consumers that meets their real and/or perceived needs. That’s your unique value proposition.
A strong brand differentiates a cannabis business from competitors. The strongest brands own a word or phrase in consumers’ minds.
Think about brands in other industries. What word or phrase does Mercedes own? Now, compare that to the word or phrase that Honda owns. They’re very different, because the brands promise different things to consumers. Their brands have grown purposefully so they own specific positions in the automotive marketplace.
To create your own brand, you need to follow the three fundamental rules of branding:
You must be consistent in all brand interactions with consumers – from manufacturing, package design, and pricing to sales, customer service, and marketing – and everything in between. The biggest brand killer is confusion, so avoid confusing consumers by consistently meeting consumer expectations for your brand.
Don’t give up. Brands aren’t built overnight. In 2019, Apple ranks as the most valuable brand in the world, but it took Apple decades to reach that status. Do you think the founders of Apple thought their little brand would grow to be the most valuable in the world back in 1976?
The reality is that every brand has the potential to be successful, but you have to be persistent in getting your message out there, living your brand promise, and consistently delivering on consumer expectations for your it.
The biggest problem that entrepreneurs face is a lack of focus. A focused brand is a strong brand, but it can be very tempting to jump at every opportunity to grow and expand that presents itself. Don’t do it. Instead, exercise restraint and only pursue opportunities that match your brand promise. If you stay focused on your promise, you’ll make the best decisions to build a strong brand.
Now that you understand the fundamentals of branding, it’s time to develop your own cannabis brand the right way, so it can earn a spot in consumers’ minds, gain value, and grow purposefully.
Your first step is to develop a brand strategy. Take some time to do your research. What is your brand promise? Who does your brand serve? Why? Who are your competitors and what positions do they already own in the marketplace? Can you threaten their stronghold or carve your own?
With those questions answered, you can create a messaging and design strategy that will guide your overall marketing plan and give you the information you need to develop a logo, packaging, and other visual and creative elements to represent your brand.
The cannabis marketplace is still fragmented, but already, some strong brands are gaining traction and market share. It’s not too late to develop your brand and carve your own niche in the cannabis industry – no matter where your business falls in the supply chain.
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