Branding Becoming Bigger Part of Cannabis Industry as Companies Look to Expand

By Tony C. Dreibus

Brand marketing has finally become a buzzword in the cannabis industry as a growing number of companies look to expand across city, state and even international boundaries.

In the past, many dispensaries, retail stores, infused products businesses and even growers relied primarily on word-of-mouth in their local communities, online listing sites like Leafly and Weedmaps, and ads in regional alternative newspapers to get their names out.

This worked well when the industry was relatively small and confined mostly to regional opportunities.

Now, the barriers to growth are falling, and many businesses are trying to figure out how to make their products a household name.

Several established medical marijuana companies are planning to extend their brands into new markets such as Nevada and Illinois, for instance, while recreational businesses in Colorado and Washington State are eyeing opportunities in Oregon and Alaska.

Opening a store or putting a product on a shelf in one state that’s recognizable to users who live in another is key to developing a successful expansion strategy, as people tend to gravitate toward what’s familiar.

What’s more, with over 90% of cannabis companies expecting to grow this year, according to the Marijuana Business Factbook, branding will become essential from a competitive standpoint going forward.

“Branding is absolutely essential,” said Bruce Nassau, the co-founder of Tru Cannabis, a company that owns of five recreational shops and dispensaries in Colorado. “It’s all about customer recognition.”

The ‘Walgreen’s Model’

Nassau should know – prior to buying the shops that fly under the Tru Cannabis label, he owned a company called Telecrafter Services that installed and serviced cable television in people’s homes. He said he spread nationwide after working hard on a brand marketing campaign in an attempt to get his name out.

His plan worked. Soon, everybody in the cable TV industry, including executives at large cable companies, knew Telecrafter’s name and reputation. That opened a lot of doors, he said, and helped grow revenues.

That’s what he wants for his rec shops and dispensaries, what he calls the “Walgreen’s Model,” meaning Tru Cannabis patrons from Denver can find a Tru Cannabis store in Seattle or Portland at some point, know the name, logo and reputation, and feel comfortable going in.

To build the company’s brand, Nassau changed the name of the rec shops and dispensaries he purchased to Tru Cannabis, designed a logo that adorns each store and standardized the customer experience so each shop would give a sense of familiarity to patrons when they walked in the door.

He said consolidating under one brand and logo not only helped with name recognition, it brought down advertising costs, as he could pay for one ad for all five rather than having to purchase one for each store.

Nassau is in the minority, though, as the number of business owners in the cannabis space who’ve built companies and know how to implement a brand marketing campaign are few and far between due to the industry’s infancy.

Early Adopter

Dixie Elixirs is one of the few edibles companies that has created a well-known brand in the industry, even though it currently offers products just in Colorado.

Since advertising in the cannabis industry is so restricted, Dixie executives use a combination of press relations, marketing and word-of-mouth to stay fresh in the minds of their customers.

The company also markets its products not only to consumers and patients who consumer the product, but also to dispensary owners who sell it, said Joe Hodas, Dixie’s chief marketing officer.

Dixie worked with a creative agency to design a logo, then branched out on its own to design its packages in an attempt to build its brand. It’s also a consistent presence at industry trade shows where cannabis business executives congregate, and its executives have appeared on respected national news programs, including “60 Minutes.”

Dixie hopes these efforts will pay off when it expands into two new states, which it hopes to do soon.

Hodas said when Dixie first started, very few companies were doing any sort of brand marketing.

“Nobody was doing anything to differentiate themselves – they were all dropping product into a plastic bag,” he said. “The packaging is the initial handshake with that customer.”

Look to Beer Industry

Cannabis companies interested in branding can look to other industries for examples of what works.

The beer industry in particular has done a great job of brand marketing, said David Welch, the managing partner of D|R Welch, a law firm that helps companies protect their brands.

Consumers buy Budweiser products, for example, because the cans have the recognizable names, logos and catchphrases on the side, even though most people can’t differentiate between the beer and its competitors.

“Bud Light sells more beer than Miller Lite, and it’s not because of the taste,” Welch said.

Bud and other long-standing beer companies have developed names and logos consumers can easily recognize – and remember.

But it’s not an overnight process, said Jared Mirsky, the owner and founder of Online Marijuana Design, a branding and advertising agency that’s served the industry since 2011. Most business owners spend a lot of time building and designing their facilities to be functional and appealing to the eye but give no thought to their marketing.

“A lot of people come in and want shotgun work,” he said. “They spent all this time on the build-out of rec shop or build-out of their grow, but then they come in and say `I want a logo designed in 30 days.’ It’s just not possible. You need to take as much time to do this as you do building your facilities.”

Once names, logos and marketing efforts are established, cannabis companies that manage to build success on the branding front could become industry leaders in a short amount of time.

“As this industry becomes more mature it’s going to be a bigger issue,” said Nassau, who is “looking at some opportunities” to expand in the Pacific Northwest. “Even if you just want to be a good-sized state company, it makes sense to brand. If you’re doing your job right, people will say `these guys are great’ just by looking at the name.”

Tony C. Dreibus can be reached at [email protected]

15 comments on “Branding Becoming Bigger Part of Cannabis Industry as Companies Look to Expand
  1. Eric rw on

    That’s what the world needs. More crappy products being sold for inflated prices based on lies generated by professional liars.

    And yes, it is truly sad that the big decision for mainstream America is miller…or bud..

    Reply
  2. Tim on

    I agree with a few of your points Eric. But hopefully with cannabis becoming mainstream, products will be safe, regulated and consistent.

    Why is it bad if the Cannabis Industry is focusing on branding? This is a sign that the industry is growing and maturing. Brands are willing to advertise and stand behind their product instead of hiding in the shadows. With the market becoming saturated with imitators, companies need to differentiate themselves with quality and presentation.

    I readily avoid “home-made” style cannabis products (especially edibles) that have unknown effects and shoddy packaging versus a known brand with consistent product and nice presentation. If they’ve taken the time to present their product in a nice way, I’m more confident that the product itself will be of higher quality.

    Reply
  3. JIMMY LIMO on

    Branding ? You want BRANDING ? Look no further than WEED ! Weed, California, that is ! “High on the Slopes of Mt Shasta” in Northern California, historic commercial store fronts on Main Street can be had for next to NOTHING ! “Made in Weed” will be a MAJOR branding opportunity when California legalizes in 2016. Contact me through the website for more information… http://visitweed.com/

    Reply
  4. briar on

    I noticed a company called terra tech inc has gotten in to branding with its line of flowers and wax products. The packaging looks really great and “classy” I believe they are going to launch this week in California and then in Nevada soon.

    Reply
  5. Ben Guzman on

    Branding is great for the industry because it helps expose marijuana. The more exposure it gets as a good thing is the whole point. It will help normalize the legalization.

    Reply
  6. Mike Jaglois on

    Branding is much more than a logo or ad message. It’s about standing for something your audience actually wants and communicating that with every touch point. There’s a real need to brand in a smart, strategic way, especially in a new category not everyone supports. Our firm has done a national consumer study that segments the market and details what they like and dislike in a canna brand. Might be helpful to some firms out there. Check it out at http://www.canna-ventures.com.

    Reply
  7. Brandon Monchamp on

    Branding is HUGE! I mean look at the investment Privateer is making… However you mention looking at the beer industry, which is valid but I would say to look at the Cigar industry. Through my experiences this correlates more closely than the alcohol industry; but I do believe in the future we can look at liquor stores as the future for dispensaries.

    Reply
  8. Eric rw on

    Tim

    There is nothing wrong with branding/marketing, if done honestly by accurately communicating information about the brand to its consumers. I am 100% for as much information to consumers as possible…but the bud light to miller comparison shows what branding means for most companies, turning piss into fine wine.

    Branding/marketing is absolutely essential for organizations, but in an industry in its infancy, as ours, it is a time to invest heavily in research…in quality and consistency of product. Every dollar you spend on branding and marketing is a dollar not spent on what really matters.

    Take Dixie edibles for example. They were mentioned in the article and are a “trusted” edible company. Their dixie rolls were tested. On the package it states their is 100mg of thc, but when tested they only averaged out to 60 mg. That is robbing your customer of almost half the product they are paying for…what sort of brand image are they trying to create with that? maybe its time they divert a couple dollars from that grand brand plan of theirs and invest it in providing a consistent high quality product.

    Reply
  9. Jon Lake on

    Terminal Cancer survivor here. I registered my names to be recognized for the specific medical purposes as well as recreational. We will offer Spray High, Spray Herbs, our patented Green Delaware free to Vets and Cancer patients in upcoming clinical trials. Good article, thank you!

    Reply
  10. Karen Freese on

    It’s fantastic that the cannabis industry is recognizing the need to brand! As a consumer marketer with 20+ years building global and domestic brands, it’s a disciple far bigger and more sophisticated then most practice or even understand. For those who do get it, they will quickly set themselves apart from the pack.

    There is a whole, little addressed side to the branding business which is understanding the end user – the patient or recreational consumer, male vs. female – what they want and need, how you communicate to them personally, and how to impact their behavior inclusive of products offered. Much of what I’ve seen in the marketplace is a push strategy that tends to commoditize, not differentiate. I know of a few dispensary operators that are running data metrics and insights research to learn how these effect their business. They are using the research to adjust strategies to further grows sales and loyalty. This is the marketing side of branding

    For those seeking to expand nationally, it helps to recognize that what translates in one state, especially for those in developed markets, does not equal the same results in another state that is not developed. Understanding what aspects or touch points to pivot when you expand nationally, is critical.

    Reply
  11. CO 420 websites on

    More than 60% of customers look up a business online (and 40% use a tablet!).

    If your branding isn’t up to snuff, you have no way to stand out in this rocketing industry.

    We’re talking about personalized, honest marketing in a way that allows a company to represent its intentions and capture like-minded customers who actually want their products.

    This is what we do. Check us out at http://www.colorado420websites.com

    Reply
  12. cockasauras wrecks on

    How hard would it be to call your brand
    Magic Carpet Ride. The package of course would have a picture of a flying carpet made up of
    As for the rest of the marketing, just pour favorite flower.lay 2nd fiddler, what has worked before will work again. Ya know if it worked for the girl scouts it’ll work for you.

    Reply
  13. cockasauras wrecks on

    That should of read –made up of our of our favorite flower. As for the rest of the marketing just play 2nd fiddler, what has worked for the best will work again.

    Reply
  14. InhaleMerc on

    Totally agree with Colorado 420 that branding is essential in this industry for differentiation and representing what your business is and strives to be. Without branding, you don’t have an identity and your target consumers can’t find you.

    Reply

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