The legalization of cannabis in Canada brought about a lot of changes in the industry, some of which have led to unintended consequences. One of the most significant changes was the requirement for all cannabis products to be pre-packaged. This requirement led to THC percentages becoming the default way for the average consumer to determine quality. Unfortunately, this has resulted in a systemic problem of falsely inflated THC levels, lazy and uninspired marketing and price compression. The blame for this problem is shared among regulators, labs, brands, marketers, provincial distributors, retailers/budtenders, and consumers alike.
This article will explore how the THC inflation problem began in Canada, the detrimental effects it has on the industry and how this correlates with the marketing, branding and advertising of legal cannabis.
Why Do Cannabis Brands and Consumers Focus On THC Percentages?
Health Canada regulations require all cannabis products to be pre-packaged, and this has made it difficult for consumers to examine the product before purchasing. As a result, consumers have no other option but to buy based on brand name, reputation, strain name, cannabinoid and terpene percentages. The legacy days of analyzing the aroma and visual appearance of a bud before purchasing it are gone. This has forced an inordinate amount of attention on THC and cannabinoid contents.
Without opening and trying every product themselves, budtenders and cannabis retail employees only have THC percentages and other COA data to sell based on (in addition to brands and brand stories). This has resulted in a majority of budtenders resorting to selling the most “potent” product instead of educating their customers on quality indicators outside of THC. Due to the lack of education, strict regulations and resulting budtender recommendations, consumers began to demand high THC products as they associated them with quality.
This led to provincial distributors demanding certain THC thresholds from brands that wanted to obtain product listings in their jurisdictions. This incentivized brands and testing labs to strive for insanely high THC percentages to the detriment of everything else (terpene content, flavour, moisture, clean burn, rare genetics, etc). Labs receive their testing license from Health Canada but each test result is not individually verified, which has led to skepticism over the validity of high THC percentages and numerous credible claims of THC inflation.
The Misleading and Harmful Claims of High THC Products
One of the major problems with the focus on THC percentages is the misleading and harmful claims associated with high THC products. Many consumers believe that high THC products are the best products, but this is simply not the case. High THC products may even be harmful for certain consumers and can produce unwanted, undesired effects. Inflated THC claims can also be detrimental for brand trust. A number of brands have recently come under fire on social media for dried flower with 40% THC or higher – eroding their image and trust with consumers.
THC % Is Not The Only Quality Indicator or Measure of Potency
Another problem with the focus on THC percentages is that THC is not the only quality indicator or measure of potency. Not even close. There are many other factors that contribute to the overall quality and potency of cannabis; including terpene content, flavour, moisture, smoothness of the smoke, ash colour, and uniqueness of the genetics. Furthermore, some consumers would actually reach their desired effect with a more nuanced cannabinoid profile. CBD-dominant strains, balanced THC:CBD strains and cultivars with minor cannabinoids like CBG and CBN can meet the needs of consumers more accurately than just “high THC”.
It is important for brands to educate consumers about these different factors and help them make informed decisions about their cannabis use. If the provincial distributors and government bodies won’t invest in these education opportunities for consumers and budtenders, then it is up to marketers to lead the way through storytelling and branding. The responsibility also falls on brand managers and product formulation teams to innovate and differentiate in areas that don’t involve THC potency.
Price Compression and Commoditization
The focus on THC percentages has led to price compression and commoditization of cannabis in Canada. Consumers have begun to walk into their local cannabis store and ask for “the highest THC for the lowest price”. This is turning the cannabis plant into a commodity around price and potency; when in actuality it is a special, nuanced plant with myriad recreational and medicinal benefits. The industry is experiencing a race to the bottom in terms of price and a race to the top in terms of potency. This needs to change. Rare and exotic genetics that cannot achieve high THC percentages are often left out of the market, resulting in less variance and choice for consumers. If the industry doesn’t act to stop this soon, this will become a self-fulfilling prophecy with every product on the market specifically catered to high THC potency with no thought for aroma, flavour, quality of smoke, uniqueness of experience, etc.
Your average alcohol consumer doesn’t walk into the liquor store solely to pick up 96% liquor or 90 proof vodka for the absolute lowest price. The conversation around liquor and wine is more nuanced; including flavour, aroma, effect, food pairings, age, country of origin, etc. Identifying quality cannabis is just as complex as identifying quality liquor, if not much more, and should be treated as such. As an industry, we don’t want to be left with nothing but 100 different SKUs of 96% vodka for $10 a bottle. It’s up to marketers and product formulation teams to innovate and differentiate in ways other than sheer potency.
Lazy, Uninspired Marketing
Finally, and most importantly as it pertains to ADCANN, the focus on THC percentages has also led to lazy, uninspired marketing. Instead of educating consumers about the different quality indicators, many brands simply market their products based on high THC percentages. This has led to a commoditization of cannabis products, where brands compete solely on the basis of THC percentages and pricing, rather than on the quality and uniqueness of their products. Cramming the most THC you can legally fit into one product shouldn’t be the only goal. Cannabis is much more than that.
Marketers and brands need to formulate products and tell stories that go past THC, for example:
- Unique, exotic genetics that can’t be found by any other brand in Canada
- Unique terpene profiles that produce noticeable aromas and flavours
- Show how dried flower smokes (ash colour, resin ring formation, smoothness of smoke, etc)
- The appearance of the bud (colour, trichome coverage, shape, size, etc), the way that the plant grows and its genetic expression
- New innovative product types (new extraction methods, infusions, multi-pack combinations, unique pre-roll wraps/papers, unique packaging, unique delivery formats and technologies, etc)
- Explain growing methods and production processes and how they correlate with quality in the end product and benefits for consumers
- Tell the story of the grower, the curator, the hashmaker, the producer, the entrepreneur, etc behind the product
- Tell the story of the origin of the genetic, the region that the plant was grown or extracted in
- Create visual branding and content/stories around strains and products that consumers can enjoy and relate to
- Connect your product to a meaningful charitable cause (active sustainability efforts, donate a percentage of profits, etc)
How Do We Fix the Problem of THC Inflation and THC-Based Cannabis Marketing?
Provincial distributors may not be solely responsible for creating the THC inflation problem, but they are the number one culprit in perpetuating it. In a recent product call from the Ontario Cannabis Store, they specifically requested more strains that tested above 30% THC. Moves like this from provincial distributors are plainly moving the industry backward. Calling for more products above 30% THC creates nothing but long-term negative consequences for consumers and companies alike. Provinces need to work in conjunction with marketers, Licensed Producers and budtenders/retailers to create thorough education campaigns to teach consumers about quality indicators outside of THC. The industry has a vested interest in educating consumers and budtenders who are willing to learn to create a more informed conversation around purchasing cannabis among the general public. This education and move away from THC obsession will save our industry in the long term.
The onus to change our industry doesn’t fall only on provincial distributors though. Brands and marketers need to challenge themselves to create brand positioning that moves past potency and price. Product formulation teams and growers need to challenge themselves to create product innovations and formats that bring value to consumers without focusing on THC percentage. We need to help consumers understand that cannabis is so much more than a vehicle for tetrahydrocannabinol.
Consumer Segmentation and the “High THC Consumer”
In contrast to the statements above, as marketers, we know the consumer is never wrong. Different cannabis consumers enjoy different things. The placebo effect can generate feelings of happiness and satisfaction with one’s purchase. And that satisfaction is real, even if the perceived benefits aren’t necessarily tangible. There will always continue to be a specific consumer segment that wants to buy the highest THC product available to them, regardless of if that actually translates into the effects or benefits they truly desire. There are myriad reasons for this – the placebo effect, social status of showing off to friends or a lack of education to name a few. These consumers will continue to exist and spend money in the legal market. Certain brands should continue to target those consumers. Budtenders and retailers shouldn’t necessarily waste time trying to educate those who don’t want to be educated. The problem arises when provinces, brands and consumers continue the cycle of focusing too much on THC, systemically stripping our industry of anything past potency.
But the tide is turning among a large number of consumers who are slowly beginning to realize that high THC ≠ quality. Brands should also pay attention to this trend and adjust accordingly. Make sure you truly understand your target consumer, how they think about cannabis and what they care about. Your target consumer may very well value numbers and THC levels, and that is okay. This is just a challenge for marketers to think more deeply about their target and how to delight them.
The Future of THC Inflation and THC-Based Cannabis Marketing
In an ideal world:
Provinces will stop calling for high THC products from producers. Instead, they’ll educate themselves and begin to source unique, rare, exotic and sought-after products that won’t necessarily test high for THC. The average cannabis consumer will become more educated. As a result, they will start to demand that budtenders and brands communicate a product’s value in a way that doesn’t only focus on THC percentage. Brands will begin creating meaningful product innovations and positions in the market that don’t involve potency. Regulations will slowly change over time to allow consumers to see, smell and even sample products before purchasing; helping to move the in-retail conversation past THC. Breeders and brands introduce exciting, unique and rare genetics into the market. Illicit consumers move into the legal space and their dollars spent are taxed and put back into the economy. And none of us hear “what’s your highest THC indica for the lowest price?” ever, ever again.
Last Updated on March 29, 2023 by ADCANN
