Who will become the Google of pot?



Despite marijuana being legal in Canada for 2 years, Canadian cannabis brands are having a tough time getting consumers to notice them.


This is a case study of bad marketing strategy that highlights the importance of strong brand management.


Let’s look at what went wrong...



High expectations, low returns


Pot producers have spent millions of dollars in marketing in the hope that people would try their brands in an emerging $6 billion market.


Most of that money was completely wasted. A survey that polled 3,000 Canadians in the first quarter of 2019 found that brand awareness remains low.


So much money, so little recognition

No brand in Canada has more than 41% recognition among current cannabis users, with most languishing between 1% and 15%. Less than half of consumers familiar with leading brands actually go out and buy them.


The five largest Canadian cannabis companies



Dude, where's my brand?


Industry players have focused on raising capital, but this hasn’t translated into strong customer relationships. No-one has been able to build a strong brand.


Top Canadian cannabis brands by dried leaf sales (2019-20) [Source: Ontario Cannabis Store]


Cannabis companies blame the strict advertising regulations placed on them, which bans mass advertising, sponsorship, contests, endorsements and promotions that associate cannabis with attractive lifestyles.


But these same restrictions apply to tobacco companies, and to a lesser degree alcohol, which hasn't stopped them from building iconic brands.


To get around the restrictions, Cannabis brands’ advertising have focused on educating consumers about their products.


This has led to a real lack of differentiation and distinctiveness.


Most pot brands look identical: bland mission statements, vague positioning, and the same boring lifestyle 2.0 look and feel.



"In a cluttered market that lacks differentiation, consumers choose based on price instead of by brand name, packaging, or the glowing review from a friend." - Brightfield Group

In focusing solely on their products, brands have failed to move up the ladder from functional marketing to building a connection with consumers.


Cannabis, the original counter-culture substance, has fallen under the influence of blanding - an identikit formula for business models, look and feel, and tone of voice.



Who are the pot players?



Edison Cannabis Co.

The second most-searched brand in 2020, they’ve been growing steadily in a growing market & stealing customers from rival brands. Their positioning revolves around better living through chemistry.


Top Leaf

The second most-searched brand in 2020, they’ve been growing steadily in a flat market & stealing customers from rival brands. Is it a coincidence they seem to have the most personality? They’re all about “the good sh*t”.


Tweed

Former favourites knocked off their perch, Tweed skyrocketed during legalization thanks to a large OOH campaign and celebrity partnerships but has failed to maintain momentum. Market share losses have stabilized since Covid-19, but they’re sitting firmly in the bottom 10%.


Everyone else

It’s a dog-eat-dog world at the bottom, and everyone is struggling to break out. Sundial, Burb and Houseplant are holding steady at 10% SoM, while premium brand Doja trickles along at >5%.


Pure Sunfarms appears to be on a huge growth trajectory since July - they must be doing something right!


Still, no company has moved up the ladder from functional marketing to building a connection with consumers. Like alcohol and tobacco companies, they need to transcend the products they're selling.


In other words, they need to create a real brand.


This is a massive failure of strategy and brand management for everyone involved.



How to build a cannabis brand


Cannabis companies need to completely re-think their marketing strategies. What they're doing now clearly isn't working.


"In 2018 I managed social for a cannabis brand. Their main focus was the stock market, leaving their content to be bland. Board members couldn’t get past the press release and staged photo op part of their image. They’d be disappointed when social didn’t convert with a link to a release." - @nataleighb

Here's what I'd do:

  1. Proper diagnosis to understand consumer cannabis behaviour

  2. Positioning that makes them stand out to a specific segment

  3. Create unique brand codes and ruthlessly codify all packaging and communications

  4. Big brand mass media campaign around a story, not product features


Pot companies need to really understand the market and the different types of consumer behaviour in it. The lack of distinction between brands is a major red flag that no real segmentation, targeting or positioning work has been done.


"There’s still a major gap in product, creating a barrier to entry for would-be consumers. Not everyone wants to enter the ether every time they consume cannabis." - @rant_thony

The right way to segment a market


How to start building a marketing strategy for any market, in any category, using market segmentation.









And they need to get smarter about using their websites to persuade people to try their products.


With the restrictions around advertising, their websites are the #1 asset in selling their brand.


How to steal customers from your online competitors


Beat a bigger company by using these six powerful heuristics to disrupt online shopping behaviour.









The cannabis market is like internet search engines pre-Google. There's a variety of brands poorly serving a broad set of vague interests, but no-one has really figured out what people really want yet.


So who will become the Google of pot brands in Canada?


Only time will tell.




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© 2020 by Ian Barnard.