Brand Awareness Low on Day 1
Consumer brand awareness on the first day of legalization in Canada was “extremely low,” with more than 95% of consumers unaware of the legal brands they had just purchased.
This low amount of awareness calls into question the large sums of money spent by some LPs to launch their brands. Several Licensed Producers ran sizeable marketing campaigns that included billboards and OOH advertising, radio ads and social media pushes. However, the majority of customers, likely coming from the grey market, didn’t recognize any brand names when they step foot into a regulated storefront or logged on to a government website.
The low amount of awareness may stem from a variety of factors. The first is lack of focus. Instead of leveraging existing awareness and selling product under their current medical brand, most LPs decided to create new brands for the recreational adult-use market. Licensed producers are attempting to launch too many new recreational brands all at once. Most of these brands weren’t fully created until only weeks before legalization, which didn’t give consumers enough time to discover them. LPs should have focused on launching only one new brand for the rec market and then started slowly introducing new ones based on nuanced consumer insight.
The second potential reason is lack of consumer knowledge. Most Licensed producers and their marketing departments do not understand the recreational cannabis consumer. They do not know how or where to reach them. This industry needs more market research as a whole. LPs need to deeply understand their customer’s preferences, attitudes and personalities. Find out who your target is. Develop insights about them. Discover where their attention is. Feed them the content they want in the places they are.
A third reason is just plain non-effective marketing. This is also a result of not understanding the consumer and what is important to them. This is a new industry and there is no definitive playbook on how to do cannabis marketing correctly. Because of this, there will be a lot of mistakes made and lessons learned in the early stages of this business.
My advice for Licensed Producers is to hire people with cannabis knowledge. Invest in market research about the cannabis consumer that is currently purchasing from the grey market. Remember that 80% of marijuana is consumed by 20% of the users. Those 20% of core users influence the consumption habits of the casual user. Find out what these insiders deem valuable and use it to influence your business decisions. Test and figure out which marketing efforts are actually presenting a return. Experiment with new and emerging marketing techniques like social media and influencers. Get creative.
Canada has the once in a lifetime opportunity to lead a new market. If Canadian companies aren’t able to establish trusted and beloved cannabis brands, America will quickly catch up. It is time to make your cannabis company a household name.
(Statistics from GMP analyst Martin Landry)