Canadian cannabis companies are quickly becoming aware that a change needs to be made. Although the legal market continues to grow in Canada, the informal market still owns 70% of all cannabis sales in the country (according to StatsCanada). As a result of a lack of focus and lack of overall market share, cannabis stocks have fallen more than 60% on average over the past year.
Many of the headlines surrounding the failures of legal cannabis companies point to the reported price difference between the formal and informal markets. In Q4 of 2019, it is said that a legally sourced gram of cannabis cost around $7.48 while informal market cannabis costs around $4.36 on average per gram.
In response to this perceived pricing pressure from the illicit market, many of the larger cannabis producers have launched “value brands” that offer lower-priced cannabis products. These brands are aimed at consumers that are looking for low cost offerings and don’t necessarily care about “high quality” or “craft” cannabis.
Join us as we take a look at the more prominent value brands that have recently been launched in Canada and analyze their promotional strategies.
Original Stash (HEXO)
Original Stash is one of the first Canadian value brands that explicitly branded themselves as such. HEXO, a large publicly traded Licensed Producer based in Quebec, made headlines when they launched their Original Stash brand to “beat the black market”.
The brand’s slogan is “Quality Weed. Totally Legit”. Original Stash aims to be “your go-to brand for quality weed. Authentic and uncomplicated.” The brand’s main value propositions is that they are selling safe and legal high quality cannabis for a price that is “a lot less than you’d expect”. The brand has its own dedicated website and social media channels (@original.stash).
Original Stash offers 1 ounce (28 grams) bags of dried cannabis flower at a competitive retail price of around $125.70 on average, including sales taxes. This price is equivalent to $4.49 a gram. For a brand that is centered around being inexpensive, the child-resistant, odour-proof and resealable packaging the cannabis comes in is actually quite luxurious. These bags resemble the packaging used by Café, one of Toronto’s most popular and notorious illicit market dispensaries. This could have been on purpose, as Original Stash aims to target the exact consumers that are currently buying from informal storefronts.
A large segment of informal market consumers are used to purchasing larger amounts of cannabis (a half ounce or an ounce) for lower prices. Original Stash tapped into this insight and is one of the only bulk offerings on the Canadian market. This helped OS stand out among a sea of brands offering only 3.5g or 7g containers.
The brand cycles through a variety of batches of different cannabis flower. This allows HEXO the freedom of using a variety of inputs (not limited to one strain or facility), an emerging trend in the world of value cannabis brands. Their first offering was titled OS.210, a Sativa-dominant hybrid flower “blend”, tested at 12%-18% THC. The second batch released (now available in many provinces) is referred to as OS.220 and offers a medium potency Indica-dominant blend of strains. These ounce bags seem to sell out relatively quick whenever re-stocked
Daily Special (Aurora)
Daily Special is one of the newest value brands in Canada. The brand was launched by parent company Aurora Cannabis, which is one of the world’s largest publicly traded cannabis companies. Aurora sells cannabis under their own corporate name as well as through a variety of other brands including San Rafael ’71 and Altavie.
The name “Daily Special” is a creative and compliant way for Aurora to basically say “on sale”. Health Canada’s promotional regulations state that cannabis companies cannot “promote cannabis or a cannabis accessory by communicating information about its price or distribution”. Since Aurora cannot create digital content or promotional materials that explicitly talk about cost, using the brand name “Daily Special” allows Aurora to market based on price promotion, something that would otherwise be potentially uncompliant.
The brand’s slogans are “deals this good shouldn’t be legal”, “high never cost so low” and “the best for less, served daily”. Similar to Original Stash, Daily Special’s promotional messaging is centered around beating the informal market on price and giving consumers the feeling that they are still purchasing from a trusted friendly illegal dealer. The branding reminds us of a 50’s diner inside of a roller skating rink with a hint of vintage car-racing vibes. The colour-scheme is yellow, red and orange – reminiscent of popular fast food franchises (signalling convenience and affordability).
Daily Special offers dried cannabis flower in three different sizes that range from 3.5 up to 15 gram containers. Daily Special promises that all of the products sold under the brand will have THC percentages of 15-21%. Some Licensed Producers are beginning to posit that the new key to success in this space will be the equation of mid-to-high THC plus low cost.
The products sold under Daily Special are “sativa” and “indica”. Aurora likely chose not to sell products with strain-specific names in order to have the ability to fill these SKU’s with a variety of different cannabis products going forward. The product descriptions for both of these products are very basic and explicitly state “don’t expect a fancy product description”. Daily Special is solely focused on offering quality flower with a high THC percentage at an affordable price, without all the unnecessary nonsense.
Twd. and Plain Packaging (Canopy)
“No Name”, the brand known for its signature yellow-and-black-Helvetica packaging founded in 1978 by Loblaw (Canada’s largest grocery chain), made a huge splash this year with their utterly basic and tongue-in-cheek marketing. Simplicity and “anti-brands” are all the rage in 2020.
Canopy Growth Corporation, one of Canada’s first and largest producers of cannabis, has launched two value brands that are their equivalent of “No Name” in the cannabis industry.
The first is called “Twd.,” which offers “sativa”, “balanced” and “indica” versions of dried flower, milled flower, pre-rolls and ingestible oils and sprays. The brand’s slogan is extremely simple: “Good wd. No extras.”
Twd. is reportedly launching a one ounce (28 gram) product in April named “Twd. 28″ that will cost consumers approximately $4.00 per gram, undercutting almost every other value brand in the country.
Twd.’s stated mission is to draw consumers from the illicit market into legal channels. The Canopy team has identified that there is a large segment of cannabis purchasers looking for low-cost and bulk offerings, similar to the current buying habits of those purchasing from the legacy market. This same insight has inspired all of the value brands that we have analyzed thus far.
Plain Packaging is another value brand offered from Canopy. The brand’s slogan, which is featured prominently on their packaging, is “It’s what’s inside that counts.” As the name states, the packaging is completely plain white with no colour, no logo and no imagery. Plain Packaging wants consumers to focus on the product, not the fancy marketing or wrapping. Similar to Twd. – Plain Packaging offers products in “sativa”, “balanced” and “indica” in dried cannabis flower and ingestible oil formats.
Neither of these brands have dedicated websites or social media channels. These two brands from CGC mostly exist in-store and do not have much of a digital or online presence.
The Batch (Tilray)
“The Batch” is a recreational cannabis brand launched by High Park Company, which is owned by/associated with publicly traded Licensed Producer Tilray.
The brand promises “good weed that won’t cost you a ton”. Similar to the other value brands that we’ve explored – The Batch aims to make the cannabis buying process as simple as possible. They ask their customers to “forget cultivars, genetic lineage, unique terpene combinations and fancy strain names”. The brand is targeting customers looking for a good deal on basic cannabis products, not necessarily experienced connoisseurs looking for the next best thing. Also similar to other value brands, The Batch emphasizes the certified lab-tested safety of their products while simultaneously calling out the “black market” by name and aiming to beat them on price.
The Batch’s dried flower is sold in “quarters” (7 grams) and “half-quarters” (an eighth/3.5 grams). The brand chose these terms on purpose as informal market consumers are used to this type of lingo. The Batch’s pre-rolled offerings include “quints” (five 0.5 gram pre-rolls) and solo (one 0.5 gram pre-roll) for enjoying alone or with friends.
Tilray’s Chief Marketing Officer, Adine Fabiani-Carter, has positioned The Batch as a “no-frills” cannabis brand focused on delivering quality cannabis flower and pre-rolls at competitive prices. The brand was built by High Park Company’s internal team that included former brand manager Matt Coulson. “Burn your weed, not your wallet” and “Weed that doesn’t cost you a ton” are two of the main slogans used by The Batch on social media and in-store marketing promotions.
The Batch recognizes that those who buy cannabis by the ounce have been the toughest to convert from the informal to the formal market, mostly because of the price discounts these consumers are used to receiving. The Batch plans on competing with the informal market by offering an assortment of low-cost quality cannabis offerings in a variety of formats.
PureSunFarms, a licensed producer based in the Fraser Valley of BC, is unique in that they do not proclaim themselves one of the cannabis value brands, but their affordable flower products successfully appeal to the value consumer. On the Ontario Cannabis Store, all of PureSunFarms’ strains are approximately $8 per gram depending on the quantity that you purchase. This makes them one of the least expensive brands listed on the legal retailer’s website. Most consumers that have previously purchased cannabis illegally are used to paying around $10/gram, so PureSunFarms appeals to these individuals and may even be responsible for transitioning some new consumers over to the legal market. As a brand, PureSunFarms emphasizes their humble farming roots, which helps them appeal to the consumers currently or previously purchasing from the informal market.
PureSunFarms offers a variety of dried flower cultivars including Critical Kali Mist, Pure Sun CBD, White Rhino, Afghan Kush, Headband, Hashplant and Island Honey.
PureSunFarms was voted “Brand of the Year” in the 2019 ADCANN Awards by the Canadian cannabis community. Since the brand only launched in 2019, it is evident they made a large splash and positive impression with consumers.
Re-Up is a value recreational cannabis brand presented by Zenabis that offers low-cost dried flower and pre-roll products. Zenabis has reportedly been able to increase their market share in the Atlantic provinces, specifically New Brunswick, by launching this new sub-brand. The brand offers several strains including “MKLTR”, which is an MK Ultra cultivar. Re-Up is available in Alberta, British Columbia, New Brunswick, Quebec, Saskatchewan and Yukon.
Re-Up’s slogan and mission is that they believe everyone should enjoy the “benefits of great cannabis”. They promise to offer high value, low cost cannabis products that are created with no waste, no fuss and no compromise. Along with affordability, sustainability is one of the brand’s core values. The name “Re-Up” was chosen because it stands for both purchasing more cannabis and “recycle and upcycle”. Re-Up’s plastic packaging is 100% recyclable and they use white labels with minimal printing to reduce the amount of ink used.
Milled Cannabis Flower
Although not necessarily a “value brand”, some cannabis companies are now offering a pre-milled cannabis product at a lower price than their full flower offerings.
Color Cannabis, a recreational brand offered by Licensed Producer WeedMD, has recently introduced a milled product to the market that they call “ready to roll”. Color’s Blueberry Seagal strain is sold in this pre-milled format, meaning the cannabis is already grinded up into a fine shake, ready for convenient consumption.
Many consumers are turning to “ready to roll” products for their convenience and affordability. So where does the term “ready to roll” originate from?
When analyzing lower-priced brands in this space it would be a disservice to ignore the United States and the most popular and iconic value cannabis brand – Old Pal. This California-based company is likely the main inspiration for all of the Canadian brands that we have examined in this article.
Old Pal was created during a time in the American cannabis industry when everyone seemingly wanted to create the next premium and female-focused brand. The main insight that the founders of Old Pal leaned into was that the average cannabis consumer considers price as their number one purchasing factor.
They made the conscious decision to be the first weed brand focused exclusively on providing a quality product at a low price point, while still remaining hip, cool and design-forward. The founder of Old Pal says that they looked at companies in the alcohol space like Pabst Blue Ribbon for inspiration, as PBR has successfully created a value product with a high perceived value. Old Pal’s mission was to do the same for legal cannabis.
Old Pal believes that offering products at a good value isn’t enough and that the brand must have an authentic reason for existing if it is to succeed long-term. The brand’s slogan is extremely fitting: “It’s just Weed, Man”. Old Pal encourages consumers to take their cannabis purchasing and consumption rituals less seriously, and aims to make weed more accessible to anyone interested in the plant.
Old Pal may seem simple but everything about the brand is well thought out. Old Pal partnered with Land, an Austin-based firm that’s worked with companies including Stumptown Coffee, Fender and Patagonia, to develop their branding and marketing strategy.
Old Pal insists that their products are communal and are intended to be shared among friends and neighbours, positioning their products as “classic shareable cannabis”. The company offers a variety of products available in “sativa”, “hybrid” and “indica” including: “ready to roll” milled cannabis flower, 1/8 ounce bags and a plethora of different vape cartridges.
After studying their branding and marketing strategy, it is apparent that Old Pal laid the framework for many of the new emerging value cannabis brands that we see today in North America and beyond.
Who is the Value Customer?
So who is the value consumer? Who are the people purchasing these brands? What do we know about them?
They are frequent users but are not heavy spenders, with most consuming at least once a week. They prioritize convenience, price and peer recommendations. They are a lower-income group and don’t usually splurge on fancy entertainment or material items. They are often older (40+) and have been consuming cannabis for a long time, or consumed cannabis in the past and have recently started experimenting again. This means that they likely started their consumption by purchasing through the informal market and are mostly comfortable buying through these channels. This group is typically split pretty evenly female and male. The challenges with marketing to this group is that they are mostly focused on price and convenience and are not easily persuaded by marketing or promotions.
Did we miss any cannabis value brands? Launching a brand in the space that you want us to cover? Want to tell us how much you enjoyed this article? For these purposes and anything else, you can contact us at: info@ADCANN.ca – we look forward to hearing from you.