How Strong Brands Win in the Canadian Cannabis Market

Strict regulations, limited product differentiation, and a growing market pushes brands to find unique ways of trying to sell an in-store and digital experience.

Introduction

When Cannabis was legalized in Canada, many thought of this as an extraordinary opportunity for Canada to become a major leader in the market before many other countries got the chance. Canada could be a country to jump on the opportunity to develop strong brand and companies for future growth (as Tweed would say).

Legal cannabis consumption spend in Canada is set to grow over $7 billion by 2024, according to a report by Arcview Market Research and BDS Analytics.

Unfortunately, we saw strict advertising regulations, delays in store roll-outs, and the large LP’s trying to work their way through a new market losing revenue, and laying-off hundreds of staff at a time.

In this blog I go over some of the key advertising regulations that are in place and how the current Canadian Cannabis brands put their product out to the market.

The Scenario

1.Advertising Cannabis to Minors or Young Persons
Brand elements on anything that would appeal to a young person.

Marketing Cannabis products is a tall task. Somewhat similar to the Tobacco industry, you cannot showcase Cannabis products or any brand elements that may be appealing to young children. That means - no products in TV advertisements, billboards, transit ads, etc. - showing the product or even a positive emotion that could potentially gain the attention of young people.

The Solution: Age-Gating Websites and Social Media Profiles

Companies have to incorporate age-gated aspects on their websites and social media accounts to ensure they abide by the regulations. This is also done in stores or when events are held, ensuring no younger people can view any of the Cannabis product, messaging, or brand elements.

Opinion: Although I understand the reasoning, why isn’t this the same for beer and liquor? Both are severely damaging to any young person who consumes it. Yes, research on the negative impact of Cannabis is still required, but we need to educate people about Cannabis at a young age, so everyone can have a full understanding of what it does and how it impacts them.

2. No Sharing Testimonials or Endorsements
No reviews. No testimonials from major influencers. No celebrity endorsements. These are core aspects of many marketing strategies that major companies put into place. When you aren’t able to use these tactics, you need to highlight a brand experience so your customers connect with your offering.

The Solution: Highlight the Brand Instead of the Product
Supperette created a unique retail experience that was both friendly and informative. Their design of the everyday diner look and feel brought nostalgia and creativity into the space.

Here are a few examples of what their in-store experience looks like:

Here are a couple of the positive highlights from when they first launched:

• Processed over 128,300 transactions between opening April 1 and
  August 31 2021

• Continuously generated robust month-over-month revenue growth and positive Adjusted EBITDA(1) since April

• Partnered with the Public Health Agency of Canada to host an initial educational event about safe cannabis consumption

• Recycled over 20,000 units of cannabis packages

• Donated over 680 food cans to the Ottawa Food Bank

Their unique brand experience was successful - with over $7M of sales in five months. By having this strong brand that resonated with their audience from the get-go, and offering an in-store experience that was pleasant and reassuring, they earned the trust and loyalty of their consumers.

3. Presenting Cannabis as Part of an Appealing or Exciting Lifestyle

This is a pretty tricky one to get around.

Brands always want to showcase how their product or service will make a difference in their consumers’ lives - whether that’s offering a new convenient way of doing things or escaping from their day-to-day - an emotional connection is required for someone to make a buying decision.

Without being able to be appealing or exciting, brands had to find new ways to connect and inspire their target audience.

The Solution: Focusing on Brand-Specific Content
Be known for something positive. Stand out from your competitors (and in Cannabis, there is A LOT) by allowing them to fully understand the value proposition you offer.

This is what Prairie Records did when they tied in Cannabis with music, pairing each strain with a type of music that suits how the person that consumes the Cannabis will feel. This not only enhances the in-store experience making it fun and engaging but educates users without having to dive into the technical and scientific components of Cannabis, which a lot of the consumers and staff don’t fully understand.

Here are a few photos of their store, along with a video of them going over why they chose to make that connection.

4. Posting Misleading Claims about the Medical Benefits of Cannabis

Many people will go into Cannabis stores expecting the budtenders (IE anyone working there) to know what strain can fix what. Until we have more scientific data, we cannot clearly identify each strain and how it impacts each person individually.

Brands have to be careful about the messaging they have in-store and online about their product - both recreational and medical - to ensure that they are transparent in describing their product.

The only solution for this is to continue to do research, learn, and educate consumers as more information comes to light.

5. Sponsoring a Person, Activity, or Event

Along with not having athletes and celebrities align with their company, Cannabis brands also can’t sponsor specific people, activities, or events promoting their products. That limits opportunities for partnerships - unless you are actually not talking about the Cannabis product itself.

The Solution: Removing the Focus from Cannabis
Education is key in the Cannabis industry, and Tweed x Uber x MADD created an immersive marketing campaign that brought to light potential issues with Cannabis, and how they can be solved.

Instead of talking about Cannabis products, they talked about all the things you can do instead of driving after you’ve consumed them. With three large brands partnering together, they were able to have a fun, yet impactful, campaign that focused on safety and best practices.

Here are a few examples of the campaign creative:

The campaign increased awareness about the dangers of high driving, with 93% of Canadians saying that they understand the dangers of driving high, and #DontDriveHigh has been adopted by other organizations, such as CAA.

The partnership with Uber resulted in over 10,000 discount codes (averaging $10/ride; $100,000) redeemed, effectively removing over 10,000 potentially high drivers from the road.

The Verdict

We are going to be a while until restrictions change in Canada, and around the globe, but with more research and data the Cannabis industry continues to grow and educate consumers about the variety of brands and products available.

Although it makes it difficult for companies to come up with unique campaigns, you can see the creativity that comes out of these regulations - and I can’t wait to see how brands position themselves next.


Note: This blog was written in the summer of 2022. Cannabis regulations are constantly changing and adjusting. Make sure to check with official government sites for the regulations in your Country/Province/State/Territory.