Private labeling can be an excellent avenue for cannabis retailers to earn extra money and build their brand loyalty. The benefits of having a private label go beyond just throwing your brand’s logo on a product. It’s an opportunity to connect with your customers and apply their needs to create a brand that is inspired by them.

Earlier this week, High Tide Inc. the parent company behind the Canna Cabana cannabis retail store franchise announced that it has begun retail sales of its first Cabana Cannabis Co. branded shatter and THC gummies in the province of Saskatchewan. The products were produced under the terms of white label partnerships with Heritage Cannabis Holdings for Cabana Cannabis Co. shatter, and Loosh Brands for Cabana Cannabis Co. THC gummies

In this guide, we will explain how cannabis retailers can make the most out of having a private label and bring a great cannabis product to the market.

Pros of private labels

The main pro to having a private label is having complete control over production, design, and marketing. Third-party manufacturers are directed by you in terms of the quality of cannabis, packaging, and production rate. The benefit of this is that you know what your customers are looking for and how much they want to spend. Having pricing authority allows you to decide on your pricing strategy and have control over how you optimize production costs, which contributes to a healthy profit margin.

Building loyalty can also be difficult because it takes time to gain traction when building an audience. It may also be determined by the current loyalty and relationships with the cannabis retailer. This is one of the reasons why private label products are ideal for people and brands who already have a loyal following. Lastly, be cautious about how you market your perceived private labels because consumers often can have a negative perception of them. They can be frequently regarded as cheap or low quality.

Cons and things to remember

While there are numerous advantages to private labelling, it is not without some cons. The main disadvantage is that you must rely on a third-party licensed producer to handle your production. As a result, you’re primarily at their mercy of what they can produce, their cost, and their speed of production. That is why it is critical to work with a reputable and trustworthy producer.

Our Starter Guide

To run a successful private label brand, you must differentiate yourself from the competition rather than simply following them. You can learn from the market leaders, but to stand out, you’ll need to take a different path.

Step 1 – Understand your customers and demographic to create your niche market
Know what cannabis products your customers are looking for. By using in-store data and social media, you can see what is popular amongst consumers and build on it. 

Step 2 – Decide a price
Look at the price the brand leaders are selling their products at and look at the income of your target demographic. From here you can find a middle ground on where you can base your price. The right price is all about balance, so try to weigh all factors together and come up with a number that meets your bottom line as well as your brand identity.

Step 3 – Create your brand and packaging
We recommend incorporating your customers in the building process of your new private label brand. Collaborating helps create interest, loyalty, and a sense of community amongst the customers. Decide if the brand will be a value brand or value brand. Look at what is missing in the market today and brand it so it stands out from other brands. The possibilities are endless as long as it is within regulations. 

Step 4 – Use with reliable licensed cannabis producers
Work with licensed producers who understand the market and can provide consistent results.

First thing to know before making any recommendation is who is the target market. Second would be to find the right partner/supplier who can provide consistent quality on the product. Third would be the pricing.

Another important thing is to start small, 3-4 SKU’s to start with, anymore would just dilute the focus and as a result brand will suffer.

Step 5 – Set up processing and packaging procedures

There are many third-party cannabis processing and packaging providers. These organizations can help your retail store brand its own white label products for the market.

Step 6 – Website and social media
Creating a website for your private label will help consumers get familiar with your brand and the products offered. By using emails already collected by the cannabis retail store you can have access to your demographic that already shops at your store(s). The emails can be used for direct marketing campaigns and brand promotion. Lastly, ask your customers which social media they prefer, this can help you focus on channels that you know your customers will be visiting.

Step 7 – Train your team
Budtenders can promote and hype up the launch of your new private label brand. They can also help retrieve email addresses and encourage customers to follow the brand on social media. Finding the right team that is aligned with the brand in terms of quality of product produced, flexibility (able to pivot with the client) and focus (not chasing every shiny thing or product category).

Step 8 – Launch social media campaigns
Create a social media campaign that follows regulations, promoting the culture, vibe or lifestyle associated with the brand. Engage in conversations with your followers and get feedback

Step 9 – in-store promotions, displays, and signage
Your store, your product, features your new private label and makes it look as good as the other products on display. This is an opportunity to show that your cannabis is not just anything stuffed in a jar. Displays and promotions can create intrigue and set good first impressions.

Step 10 – Launch party, everyone loves swag
Celebrate the release of your new private label with your team and customers. Invite a DJ, give away swag, and host a launch party or have a week-long event where you can release a new product every day. Make it appropriate to your brand and demographic – don’t forget to have fun doing it.

We met Michael Zhang from Coast  2 Coast Branding Inc. at Lift Co., a the have some unique rolling papers and cannabis accessories that will help keep the conversations going and make and lasting impression. Check out some examples below.

The market’s still young

Running a retail business, whether a private label or not, is difficult. If you don’t meet your initial objectives, it doesn’t mean your entire business is doomed. Allow yourself the freedom to fine-tune your business model and try out new strategies. Nobody gets everything right on the first try. Private label selling necessitates trial and error, so experiment with different strategies before cutting your losses. Lastly, remember that the cannabis industry is still in its infancy, and with many new brands entering the market – there’s plenty of room for dispensaries to get onboard.

Last Updated on June 14, 2022 by ADCANN

Spencer Tropea

Spencer Tropea

Spencer Tropea is a seasoned creative and certified cannabis sommelier with 15 years of experience in PR, design, and photography. He's worked with several prominent cannabis brands across North America, using his unique skills to craft engaging narratives that breathe life into the industry and the passionate people invloved.