It is an understatement to say that it was a dramatic decade for the cannabis industry. We have all watched the rapid development from its humble beginnings to something of real scale, sophisticated operators, and accelerated consumer adoption. As state after state legalizes the sale of cannabis products, the dynamics that drive the entire supply chain – from growth and manufacturing to packaging, marketing and sales – emerge from the shadows and take on familiar forms as they emerge, proven paradigms .
When it comes to mainstream consumer products, success is about streamlining operations, understanding how to differentiate yourself in a competitive landscape, and developing creative marketing and sales tactics to rise above the noise.
Cannabis is now ready to play the same game as any other packaged product when it comes to gaining brand loyalty – powered today by social media and a primarily digital marketing ecosystem. After all, physical shelf space and online attention are of paramount importance in every sector, and cannabis is no exception.
How should cannabis companies balance traditional business rules with their willingness to break new ground and set their own pace?
Interestingly, traditional fast-paced consumer goods brands (FMCG) are struggling, particularly with the dominance of e-commerce for instant – and often automated – comparison of purchases and price hunts … and also with the rise of the millennial. One of the dominant traits of this generation is the desire to explore, test, compare, and jump from brand to brand with little loyalty. They demand firsthand experience, personal engagement, and bottom-up evaluations, not top-down streams of ostentatious claims.
Mass market brands have always relied on core value proposition messaging and ongoing marketing campaigns to cultivate and retain audiences. Today, these companies find themselves in a world of metrics, analysis, and empirical data that can and must drive every step forward. But many resist the approach rather than their own perceived “expertise” of knowing what the public wants or expects.
Unburdened by the historical baggage traditional brands have to contend with, cannabis brands are eagerly embracing this dynamic. And given the continued and impending growth that cannot be matched by other industries – projected annual sales soar from $ 20 billion in 2021 to $ 40 billion in 2025 and legalization of the East Coast on the way with an anticipated average annual growth rate of nearly 50 percent – a lot is at stake.
Homing in houseplant
Seth Rogen and Evan GoldbergBrand, Houseplantis a great example of a company that is harnessing and reinventing the traditional dynamics of game books. The Houseplant brand has its start in Canada (which makes sense since it was the first country to legalize it) and it’s only on its way to California this month. Let’s take a look at how some of these guidelines apply to the brand’s recent expansion.
Houseplant started with the benefit of the built-in star power of roe. Interestingly, he didn’t include his name in the product name itself, which indicates a level of confidence with which he implies that the brand can stand on its own. What’s more interesting is that the company also produces a number of standalone housewares that can be used to further expand the brand. The two businesses have been carefully separated on social media to prevent restrictive cannabis marketing guidelines from limiting the company’s ability to build a brand awareness base. Beyond the name of the houseplant, the two come closest to a series of records with the names of three cannabis strains (Sativa, Indica and Hybrid). The company cleverly builds a brand with a parallel, essentially unrelated line of products.
Rogen’s company innovates not so much in the actual product, but in the packaging. With a mid-century retro style and color-coordinated wooden-stamped cans, the products in Canada stand out in ways they never could. There the regulations are extreme, restrictive and difficult to implement if a differentiated visual impression is created. In addition, Rogen is borrowing names from his film Pineapple Express as an out-of-the-box strategy to not only use varieties as product names. Names like Pancake Ice Sativa are sure to grab the attention.
Sales are more easily made when the demand is clear and retailers see the logic (i.e. profit) in promoting a particular brand. Houseplant is starting a direct-to-consumer (DTC) game to build that demand, and with Rogens’ social media following alone, it should be easy for the company to attract customers to an online store. I assume that the DTC approach is not a long-term strategy as it requires overhead and shipping cannabis is complex even within a single state due to cross-border / regional regulations. Additionally, real-world shelves provide a more attractive stage for the brand’s dramatic packaging. We will see the progress over time.
Houseplant also appeals to millennials by jumping on the socio-ethical-political train and emphasizing its desire to increase the impact on the world well beyond its commercial goals. The company is actively involved with nonprofits that seek drug policy reform (drug laws are known to disproportionately disadvantage minorities) and mentors cannabis entrepreneurs – the young, creative makers who can help innovate the market.
It is clear that Houseplant does not want to be “just another cannabis supplier” vying for attention and a tiny fraction of the market share. The brand’s strategy uses the traditional playbook, but expands many of the tactics implied there as best practice. When looking for an upscale consumer base, the brand is already differentiating itself. There are many other challenges that help or will harm the business (expanding products beyond flowers, delivery logistics and scope, getting into brick and mortar retail, etc.), but when these are all treated with the same creativity and not the same business as-usual approach, the future is bright.
Cy Scott is co-founder and managing director of Headset, Inc.Convert retail data into real-time insights into the cannabis market. In his weekly blog he offers industry analysis and insights into innovative brands. Cannabis packaged goods. Prior to founding Headset, he co-founded Leafly and helped make the website the world’s leading cannabis information resource. Along with his work at Headset, Scott founded a monthly cannabis tech meetup that hosts cannabis entrepreneurs and technology developers and is expanding into multiple regions in the United States. Scott’s favorite is Tangie.