Cannabis Entrepreneurship 101: How to compliantly market cannabis in Canada

by Nov 30, 2020, 14:47 PM

There are many tactics that may be worth investing time into that can help any company make inroads with consumers.

A 2020 Brightfield Group study paints a bleak picture of the prospect of cannabis marketing in Canada: of the 3,000 people polled, two out of five respondents said they recognized Canopy Growth’s Tweed brand, while 17 other brands had less than 20 per cent name awareness. When brand awareness and recall is so low, how can start-ups stand out in a fiercely competitive market and do so in a way that’s compliant with the Cannabis Act?  

“From a start-up perspective, it's anyone's game,” says Kayla Rochkin, marketing VP at socially conscious cannabis brand house TREC Brands. She sees the lack of brand awareness in the industry as a positive, and advises that start-ups shouldn’t lose sight of long term brand building. “We are just at the point in the industry in Canada where there's so many new products coming out every single day that most consumers are just open to trial. They’re seeing that there's something new on the shelves all the time. And retailers have been delivering that by constantly pulling new products when a new producer gets licensed or when a new format comes out, which is wonderful,” she explains about the reality of the current situation, and the even playing field it can offer. 

Though the rush to be first to market certainly gave some companies an advantage, what we’re seeing now suggests that being first doesn’t necessarily lead to brand loyalty. For start-ups, that may mean that there is opportunity in the industry’s young age, and room for savvy marketing. There are many tactics that may be worth investing time into that can help any company make inroads with consumers.

Know what is and isn’t compliant

The Cannabis Act makes it clear that brands should avoid marketing to minors, sharing testimonials or endorsements, connecting the consumption of cannabis to an appealing lifestyle, praising misleading claims about the effects of a product, and sponsoring people, activities or events. There’s also a lot of grey area within those guidelines.  Rochkin recommends that any start-up should find their own legal advice in regard to compliance. 

“Having lawyers, or partners in general, who are close to the industry and have their ear to the ground or can hear some of the news that goes around is often very helpful for a start-up,” she explains. Rochkin says lawyers and legal teams become a necessary information sharing tool for finding out whether another brand’s marketing tactic warranted a letter from Health Canada.

“It’s through those channels that as a cannabis start-up you can be aware of what is or isn’t possible. Ultimately, with so much grey area, a lot comes down to your own comfort level and the risk you’re willing to take,” she adds. 

“We consult with lawyers regularly to get their opinions on what works and what doesn't,” Rochkin continues. “A lot of the advice they'll offer is on a sliding scale. So they'll say, ‘this is a low risk item and this is a high risk item.’ Then it's up to whoever the client is or whoever is doing the marketing to decide: ‘what is the risk that our corporation is willing to take on?’”

Retail-level marketing

It is critical to understand the role that cannabis retail plays in brand marketing. Rochkin says that although name recognition isn’t currently high, it underscores the need for companies to befriend those who are swaying consumption. “Consumers are walking [into retail] and asking for whatever they're looking for, whether it's CBD, something fun for the weekend or something that's a really high THC, and it's the budtender that is often making that recommendation to them.” 

Rochkin says that really knowing one’s audience often means finding a balance between long-term brand building and identifying your key influencers. The majority of purchases are happening at the store level, and many consumers are walking in with very little sense of a specific brand or product. Outreach to budtenders and retailers via product knowledge sessions can be a key tool to introduce your brand to the experts making the recommendations to consumers and emphasize above all else why your product is as good as you claim. 

“Making sure you build up your marketing towards the [budtender] is truly going to impact the decisions made at the point of purchase,” Rochkin adds. “It's a different type of marketing than people may think about, because it's focusing more on interpersonal relationships and building experience, but it's still marketing. It's still getting your brand out there, raising awareness and driving demand.”

Social media can also drive brand awareness

Part of the work involved in connecting with budtenders and influencers overall is happening online. Rochkin names Facebook, Twitter, Instagram, Snapchat, and LinkedIn as the five key platforms that cannabis companies should focus on, though each have their own audiences and benefits. 

  • LinkedIn: “Linkedin is an amazing source for news, any kind of investor relations work you want to do and job opportunities. So there's an opportunity there if you want to build up more of a corporate brand.”

  • Twitter and Snapchat: “In terms of a consumer facing brand, Twitter has some strength as well as Snapchat. They will actually take investment from a cannabis company and allow you to buy media and buy paid ads on their platform. So that can allow you to reach a much wider audience beyond just your followers and really raise awareness of your brand in a big way.” 

  • Facebook: “A great place to build community. There are some wonderful cannabis communities on Facebook where people share tips and tricks, but it's less about a brand communicating their message out and more about active community building, where people tend to share with each other more. It also tends to be a bit of an older demographic.”

  • Instagram: “Provides this opportunity to truly build up to a beautiful aesthetic which can go a long way to helping define your brand and communicate what it is in very few words just through visual imagery, which we all know resonates with people so much more detailed copy does.” 

Focusing on keeping your brand compliant can be a difficult situation to navigate on your own, but with the right help, this can open up a lot of possibilities for you to consistently deliver your message to your target audience.

Extracts

  • Don’t think of compliance as a limitation on how you can/cannot market to your consumer. Think of it as an opportunity to gather information and partner with a legal team who has your best interest at heart.
  • It might be anyone’s game in terms of brand awareness and recall, but there are compliant ways for you to impact decisions made at the point of purchase. Budtenders have a lot of experience and know the products and the consumers extremely well. Trust in that knowledge and build relationships with them.
  • Depending on your branding/messaging there’s likely a social media platform that suits your needs and your audience’s needs better than others. Understanding these differences can be key to being able to connect with your consumer.

This is not an offer to sell or a recommendation to trade in any securities. This information is provided as of the date hereof. This document contains data obtained from third parties that Canopy Rivers has not independently verified. This document also contains forward-looking information within the meaning of Canadian securities law, which is based on certain assumptions. While management believes these assumptions are reasonable based on information available as of the current date, they may prove to be incorrect. Many assumptions are based on factors outside of Canopy Rivers’ control and actual results may differ materially from current expectations. Forward-looking information involves risks, including, but not limited to, the risk factors set out in Canopy Rivers’ most recent Management’s Discussion and Analysis and Annual Information Form. You should not place undue reliance on forward-looking information. Except as required by applicable law, Canopy Rivers assumes no obligation to update or revise any forward-looking information to reflect new events or circumstances.