Chart: Marijuana brand concentration highlights need for strategic branding, marketing

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As most recreational cannabis markets mature, a small number of brands are gobbling up the majority of sales.

Brand concentration – where a few brands command most of a segment’s sales – highlights the importance of effective branding and messaging for marijuana companies.

“When analyzing the competitive landscape of the cannabis market we often look at a metric called ‘brand concentration,’ which is simply the proportion of sales to the top 10 brands,” said Cooper Ashley, a data analyst with Seattle-based cannabis analytics firm Headset.

The less concentrated a market, the more competitive it is, meaning sales are spread across more brands.

Data from Headset shows that brand concentration in recreational cannabis markets in California, Colorado and Washington state is increasing.

“We are seeing that proportion increase over time in most of our markets, indicating that the top brands are capturing more and more market share,” Ashley said.

Whether a marijuana company is a top 10 brand or a smaller player, it must have a solid branding and marketing strategy to retain or strengthen its foothold.

“You really have to work to find what it is that distinguishes your company from the next,” Taylor West, co-founder of Denver-based Heart + Mind Media, told Marijuana Business Daily.

Branding give companies the ability to compete on attributes other than price, according to West.

Price competition ultimately drives down prices, which can negatively impact a company’s bottom line.

It is also critical for companies to understand the customers they are targeting.

Factors contributing to marijuana brand concentration are difficult to pinpoint given the fragmented nature of the U.S. cannabis industry, with each state employing its own rules and regulations.

However, Nevada appears to be bucking the brand concentration trend by becoming less concentrated over time.

Roughly 80% of Nevada’s recreational marijuana sales occur in Clark County, home to Las Vegas – a city that hosted an average of 3.5 million tourists per month in 2019.

The Las Vegas metropolitan area population is only 2 million residents – meaning cannabis sales may be largely fueled by tourists who may have less brand recognition and loyalty.

A branding strategy that works in a market driven by locals may therefore be less effective in a state like Nevada.

Maggie Cowee can be reached at

The March issue of Marijuana Business Magazine covers the importance of developing and marketing cannabis brands in the face of regulations that prohibit advertising.