“America’s marijuana industry is no different than the hot dog industry,” writes cannabis investor and author Jeffrey Friedland in a recent essay. “Branding is quickly becoming critical in determining the success or failure of many marijuana businesses.” Friedland explores the abundance of celebrity cannabis brands such as those by Willie Nelson, Snoop Dogg, Whoopi Goldberg, and even the estate of Bob Marley. The legal marijuana industry generated $6.5 billion in 2016, a 30 percent increase over 2015, with expectations that the industry could generate annual revenues of $20 to $30 billion in 2021.
Here are five takeaways on the importance of branding from Friedland’s story, which you should read in its entirety here. He’s also the author of “Marijuana: The World’s Most Misunderstood Plant”:
“Many younger consumers are turned off by commercialization and branding. Older customers are generally more comfortable with branded products. They frequently feel that a celebrity-endorsed, branded product line, provides a “seal of approval,” and that the marijuana product will provide the desired recreational effect or medical benefit the consumer is seeking.”
“The industry’s move toward branded products provides tremendous opportunities for existing state- licensed marijuana businesses, entrepreneurs seeking to enter the industry, and businesses seeking to establish brands. Most importantly, branded marijuana products allow growers, processors, retailers and dispensaries the ability to reap a larger profit.”
“Budtenders are the gatekeepers at dispensaries and retail stores, and are key to the success of the business. Generally, budtenders suggest that customers or patients take a whiff of various strains contained in apothecary jars, or follow their recommendations regarding concentrates or edibles. This is a throwback to how most medicine and consumer products were sold at the turn of the 20th century.”
“There are numerous challenges in establishing a national marijuana brand. Products need to be produced and sold in a state in compliance with each state’s marijuana licensing requirements and regulations. Since marijuana is illegal federally, this eliminates producing a product in Colorado and shipping it to Oregon, Washington, or anywhere else.”
“A brand with a good formulation, excellent quality control, and consisting of one or more popular products can be destroyed by a licensee in a state who produces and sells substandard products. With the popularity of social media, poor quality products in the marketplace in one state can destroy an entire national brand.”