Almost two years after federal legalization, the landscape for Canadian cannabis brands is an interesting place. Many of the large companies that dominated the market early have fallen on hard times, resulting in massive layoffs and shuttering of facilities. In the first year of legalization, these companies raced to produce cannabis on a large scale to meet demand. For many, the rush to increase supply led to compromises in product quality. These quality issues, a lack of retail locations, and high prices (among other things) have led many Canadians to become disillusioned with the legal cannabis market.
This wavering interest can be seen in the consumer purchasing habits of Canadian cannabis brands. According to Stats Canada, in 2019 only 28% of Canadians bought cannabis solely from legal sources. Many consumers find themselves going between regulated and unregulated sources for their cannabis. The number of people buying some of their cannabis from licensed sources rose to 53%, but the legal market still loses many of these consumers to unlicensed sources. This is especially prominent with younger demographics where close to 50% of Canadians between 19 – 44 still buy some of their cannabis from an illegal source. As the legal industry moves forward, customer retention will need to be improved for steady growth to continue.
This fluidity between regulated and unregulated markets shows there are still issues that need to be addressed to help improve the legal channel. Making it easier for growers to enter the industry will help increase the variety of cannabis products available through licensed channels. Provinces increasing the number of retail locations will make it easier for consumers to access. Prices and product selection have been steadily improving but there’s still work to be done. Moving forward, cannabis companies will need to be ready to adapt quickly and will have to work to establish their own unique place in a rapidly developing industry. These five brands are well on their way to setting themselves apart as the recreational cannabis market grows.
The flagship flower brand for British Columbia based grower Experion, Citizen Stash has been establishing a name for itself in the Candian cannabis market. Their line of dried flower offers an enticing mix of strains, most of which are unique to Citizen Stash. While some of these products can go for as much as $16/g, they’ve started offering some strains at more affordable prices. Initially launching on the west coast, they have since moved their way east. After recently announcing their entrance into Ontario, watch for this brand to take off in a provincial market that’s eagerly awaiting new products.
What sets Citizen Stash apart from its competitors, other than it’s well-designed brand, is the genetic variation of their products. After launching with Creamsicle and Lemon Zkittlez they followed with MAC-1 which has been getting great reviews since its launch. Adding strains like Nuken, Mimoza, and Sunset Sherbert helped Citizen Stash solidify what was an already strong line of products. Having unique product offerings like this will be important for brands looking to differentiate from their competitors.
This unique product selection will help Citizen Stash stand out in a cannabis market saturated with brands offering the same strains. As more flower brands begin to enter the cannabis market there will be an increase in the variety of flower available. This increased selection will lead cannabis consumers to start taking things like unique genetics, terpene profiles, and cannabinoid variety into account when purchasing products. Demand for classic strains will always be there but consumers will start branching out to find the new and interesting products. As the market gets more competitive, brands who set themselves apart with unique genetics will thrive while brands with a focus on growing what’s popular will struggle.
Ever since entering the market, Pure Sunfarms has slowly been working towards becoming one of the top brands for price-conscious cannabis consumers. After launching with their single strain products in traditional quantities (1 & 3.5 gram), Pure Sunfarms now offers 1 Oz. blends (Sativa, Indica, or Hybrid) priced as low as $3.57/g. While it’s not a top-shelf cannabis brand, it’s a great option for the more frugal shoppers. With brands just starting to explore selling dried flowers in larger quantities, Pure Sunfarms has the chance to cement themselves as one of the top value brands in Canada.
In a market starved for bulk cannabis options, Pure Sunfarms is leading the way by capitalizing on the subset of cannabis consumers who prefer purchasing large quantities of cheap flower. Currently, there are very few brands that offer products that satisfy that subset because the focus has been on 1 gram or 3.5 gram packages. The lack of bulk options available on the licensed market leads many consumers to purchase products from unlicensed sources that offer a wide range of quantities available for purchase. If Pure Sunfarms starts to offer single-strain ounces of dried flower it may further help them secure their position as the go-to bulk brand for consumers.
On top of offering value to customers, Pure Sunfarms has a well-designed brand to back up their products. While most value brands put minimal effort into branding, Pure Sunfarms has taken the opposite approach. Their website is user friendly, well designed, and offers a wide array of information on all their products. While current marketing regulations are extremely limiting for branded packaging, Pure Sunfarms has the marketing elements to capitalize as packaging and design regulations decrease. This strong, effective branding will elevate and legitimize Pure Sunfarms, helping them stand out in a space that will soon be crowded with cheap, value brands.
Redecan is an effortlessly good brand that provides good quality products at reasonable price points. They aren’t trying to become the leading premium brand, but rather a one-stop-shop for all cheap and cheerful cannabis products. By offering a wide selection of products across multiple categories with consistent quality, they’re quickly becoming a repeat purchase for many cannabis consumers. Redecan is an example of how brands don’t always need to spend lots of money to gain brand recognition. They see success because they know their market and serve it well.
The brand most recently knocked it out of the park with their Redee pre-roll products. For those who haven’t seen them, Redees are single-strain packs of 10 x 0.35-gram joints. While multi-packs of 0.3-gram joints aren’t common among Canadian cannabis brands right now, the concept has seen success in the U.S. These smaller sized joints are great for consumers who are looking for a quick and easy smoke. They save customers from having to hold on to half-smoked joints that weren’t finished in one sitting. This product stands out in a pre-roll market that tends to lack creativity. Offering a unique pre-roll option at a good price (~$6/gram) is a great example of how Redecan grows brand recognition through their products instead of using traditional marketing channels.
What Redecan is doing well is building brand recognition in a market where that’s been difficult to do. They are winning over consumers not through million-dollar ad spends or branded merchandise but by providing a consistent quality product at a reasonable price. This strategy of providing both quality and value to customers helps when it comes to budtender recommendations in-store. With many cannabis consumers having limited to no knowledge about the various brands available on the recreational market, the budtender recommendation reigns supreme. Redecan is tapping into that by selling products that offer consistent quality at a reasonable price, a combination that makes it easy for budtenders to recommend.
Anyone looking to launch a cannabis brand in Canada should take notes on what Top Leaf has done. Top Leaf was a brand from pre-legalization that entered the market through a partnership with Sundial Growers. Since launch they’ve taken the cannabis market by storm, quickly getting Top Leaf’s products into almost all Canadian provinces. This expansion is being aided by their deep brand which is positioned to excel as marketing regulations loosen. A strong presence in every province coupled with a well-designed brand means Top Leaf is well on their way to becoming a household name across Canada.
What sets Top Leaf apart from the competition is their ability to stay on brand across multiple markets and product categories. When rapidly entering multiple provincial cannabis markets it can be difficult to ensure your brand doesn’t become diluted in the process. Top Leaf has managed to stay true to their brand as they’ve expanded which is not easy to do. Everything from their Instagram page to their swag uses their eye-catching black and gold. They’ve also made an effort to do in-store activations, a marketing medium that helps brands make direct connections with both retailers and consumers. All of this helps Top Leaf on their mission to be recognized as one of the top high-end brands in the market.
Similar to Pure Sunfarms, Top Leaf is another brand that will benefit from reduced marketing regulations. Brands, like Top Leaf, that are prepared for these changes will have an advantage over others who are slow to react. As brands are permitted to get creative with their designs, things like package design will start to have more of an influence on consumers’ purchase decisions. As the flower market grows and more brands are competing for shelf space, having packaging that stands out among the rest will help set you apart. If Top Leaf can react quickly to regulation changes and implement package designs similar to the sleek mock-ups on their website, they will be hard to miss.
Based out of Salt Spring Island, Good Buds is a smaller brand starting to make a name for itself in the cannabis market. While their flower products have been getting great reviews for some time now, what sets them apart is the fact that they are one of the first brands to enter the newly legalized concentrates market – a challenging endeavour. After recently launching their hash and hash rosin in Alberta, Good Buds has begun their journey in the early days of the legal concentrates market.
Good Buds are setting themselves up to be a brand that’s well-known across many product categories. Having a wide product mix will help smaller brands grow recognition naturally without having to blow the bank on marketing expenses. In the case of Good Buds they have: small-batch indoor flower to satisfy quality-conscious consumers, outdoor flower products to satisfy the more price-sensitive consumers and cannabis extract products to satisfy concentrate consumers. Building a brand with an array of product offerings that hit multiple consumer subsets is a recipe for success.
The first brands to enter the legal concentrates market were going to take it on the chin so Good Buds’ choice to enter the market early is not without risks. The concentrates market may look wide open for brands to secure market share but this market didn’t just appear with legalization. Cannabis concentrates were an advanced product category that was rapidly growing beforehand. As licensed concentrate brands enter the market they will be heavily scrutinized and measured against the products that have been, or are currently, available on the unlicensed market. Consumers who purchase concentrates tend to be very fastidious about the products they consume, and for good reason. Quality tends to be top of mind when purchasing concentrates because low quality products are very noticeable and will be swiftly rejected in a competitive market. There will be brands that offer budget concentrates at cheaper prices but even those products will have to maintain a certain quality level for consumers to consider purchasing. It will be an uphill battle for brands to convince these consumers to purchase their concentrates through the legal market, but the view from the top for first movers like Good Buds may be well worth the risk.
What’s Next for Canadian Cannabis Brands?
There has been much progress since legalization but there is still a ways to go. With many consumers flipping between purchasing from licensed and unlicensed sources it’s hard to say the recreational cannabis industry is firing on all cylinders. A collection of issues has limited the growth of the industry but as time passes these problems are being addressed. Canadian cannabis brands and retailers are now entering the market quickly, and this will only get quicker as the barriers to entry decrease. Brand recognition and differentiation will have increased importance as the market begins to get cluttered.
While the five featured brands have worked to set themselves apart, they’re not alone. Simply Bare, Broken Coast, and Tantalus Labs are just a few examples of other brands that are working to secure unique positions in the cannabis market. All of this being said, predicting the market leaders of the future is too difficult in such a young industry. It’s quite possible that some of the Canadian cannabis brands who will be leading the way a year from now haven’t even entered the market yet. Brands that are currently on the market should be aware of their competition and differentiate themselves accordingly in order to defend their position in the industry.
It’s been a rollercoaster since legalization back in October 2018 but the foundations for a successful cannabis industry are in place. Growth has been slow but we’re starting to get glimpses of what the future has in store. In the coming years watch for the true Canadian cannabis brands to take form. Once it takes off there will be no looking back.