Tag Archives: marketing

The Brand Marketing Byte

Cannabis Brands in Culture: Tyson Ranch

By Cannabis Industry Journal Staff
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The Brand Marketing Byte showcases highlights from Pioneer Intelligence’s Cannabis Brand Marketing Snapshots, featuring data-led case studies covering marketing and business development activities of U.S. licensed cannabis companies.

Here is a data-led, shallow dive on the California brand, Tyson Ranch:

Tyson Ranch – Cannabis Brands in Culture

To just about every American, Mike Tyson is a household name, even after retiring from boxing for more than 15 years. For the uninitiated, Mike Tyson founded Tyson Ranch (TR), his cannabis licensing and branding company, about two years ago. The brand’s flower, extracts and infused products are distributed to dozens of dispensaries throughout California.

Last year, the brand developed plans for a boutique luxury resort outside of Palm Springs. About six months ago, the brand expanded its footprint to another state, with TR cannabis products showing up on dispensary shelves in Nevada.

Last week, Tyson Ranch gained some media attention, but this time not by anything Tyson himself had done. The Simpsons aired a cannabis-focused episode where they featured a character based on Tyson, Drederick Tatum, a former boxer who now resides in Springfield, the fictitious setting of the show. The episode’s storyline gives a major nod to the TR brand with a mention of an upscale luxury resort dedicated to cannabis.

That earned media attention helped Tyson Ranch soar in Pioneer’s weekly index of the hottest U.S. cannabis brands, earning TR the #2 spot. This also ends March with a bang for TR, climbing from the 40th position overall in February to the 28th presently.

The Brand Marketing Byte

Introducing The Brand Marketing Byte

By Cannabis Industry Journal Staff
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Cannabis Industry Journal is pleased to announce our partnership with Pioneer Intelligence on this new series of articles. This is the first installment of The Brand Marketing Byte.

Pioneer Intelligence uses data to benchmark marketing performance of consumer-facing cannabis brands across three areas: social media, earned media and web-related activities. At present, Pioneer takes in over 60,000 data points each week. The company’s team of marketers and data scientists share findings through weekly generated Performance Scorecard reports as well as Brand Marketing Snapshots. Pioneer Intelligence offers reports on more than 500 U.S. cannabis brands. Ben Walters, founder of Pioneer Intelligence, says their mission is “to help cannabis industry stakeholders better understand how marketing strategies & tactics resonate with audiences.”

The Brand Marketing Byte will showcase highlights from Pioneer Intelligence’s Cannabis Brand Marketing Snapshots, featuring data-led case studies covering marketing and business development activities of U.S. licensed cannabis companies. We hope this column can serve as a resource for readers interested in branding and marketing.

In terms of scoring methodology, Pioneer Intelligence’s reporting favors “heat” over “strength” as the company prioritizes “relative change” above “absolute position.” This means that, for example when talking about social media audience size, they don’t just score brands based on the number of followers, but they also score audience growth. In fact, Pioneer’s algorithms put more value in growth figures than actual number of followers. For more insight on their methodology, along with a weekly updated index of the hottest brands, visit their website here.

Without further ado, here is a data-led, shallow dive on the California brand, Legion of Bloom:

Legion of Bloom – Content Strategy

Legion of Bloom (LOB) was founded in Northern California in 2015 when five independent growers joined forces. As one of the more widely recognizable brands in the region, they produce craft, high-quality cannabis products and are well known for their vape cartridges. The company has superior genetics and sustainable practices, which they capitalize on in their marketing efforts.

LOB has invested heavily in generating content, which appears to be fruitful. Their website has an in-depth introduction to terpenes for consumers and they utilize their blog section well with a high volume of quality content throughout the second half of 2019. It’s worth mentioning their website features full laboratory test results for all of their products, highlighting their commitment to transparency, consumer trust and brand recognition. Through looking at a few key metrics like indexed keywords, site strength and visit duration, it is apparent that LOB has increased their audience engagement significantly.

All of those factors combined, LOB has used a variety of content tools to grow their website consistently and sustainably, earning them #38 spot on last week’s Pioneer Index, a ranking of the hottest U.S. cannabis brands.

Cannabis Industry Journal

Infused Products Virtual Conference Coming on March 31

By Cannabis Industry Journal Staff
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Cannabis Industry Journal

In the midst of a global pandemic with schools closing, businesses asking employees to work from home and events being canceled left and right, we have one event that will remain scheduled: The Infused Products Virtual Conference on March 31. The event is complimentary for attendees to register. Click here to sign up for this virtual conference.

On March 31, the event will begin with a presentation from the folks at Cresco Labs: Applying Food Science Principles to Cannabis Edibles. Marina Mincheva, Director of Manufacturing Quality Assurance and Stephanie Gorecki, Director of Food Sciences at Cresco Labs will deliver this talk. They will discuss what a research and development process looks like for creating cannabis-infused edible products, how to then commercialize those products and developing CPG products with input from marketing and quality.

Ellice Ogle, CEO & Founder of Tandem Food LLC, will deliver a talk on the importance of food safety culture in the cannabis space. Kathy Knutson, founder of Kathy Knutson Food Safety Consulting, will follow that talk with a discussion of GMPs, HACCP and how cannabis companies can apply preventive controls. The last presentation on the schedule is The New Canadian Edibles Market, where Steven Burton, Founder & CEO of Icicle Technologies, will discuss edibles regulations in Canada, a current state of affairs of the Canadian infused products market, as well as what US edibles companies can expect when it comes to new regulations.

To learn more about this virtual event, see the agenda and register to attend, visit the website here.

Judge A Book By Its Cover: Why Understanding Information Economics is Critical to Gain Consumer Trust and Build a Sustainable Brand

By Nathan Libbey
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Information economics has existed for decades and drives much of how products, including cannabis, are marketed and purchased. One of the essential frameworks that guides information economics are the search, experience, and credence properties of a product (Patterson, 2017). Understanding these different product attributes is key to setting up a sustaining cannabis product, corporation, and industry.

Search

The search attribute of a product is largely what we see prior to the purchase of a product. Images, claims, and packaging may all contribute to the search attribute of a product. You’ve got a good-looking, flower, pre-roll or edible, and it shows well on your insta page. Information is seemingly symmetrical between agency and consumer, what you see is what you get. In the developing cannabis industry, firms are investing a tremendous amount of resources into search attributes.

Experience

What is the effect of the product? There are two aspects of the experience attribute in information economics. Testimonials may be also considered experience attributes, as they give a user knowledge of how a product tastes, how long it takes to kick in, how long it lasts and descriptions of how others perceived the product’s deliverables. Despite testimonial power, experience is largely personal and occurs only after the product is consumed. Information is seemingly symmetrical; you get the experience that the agency planned and you anticipated. Advances in genetics, homogeneous production methods and potency testing demonstrate that the cannabis industry is investing in experience attributes.

A level playing field where transparency is at the forefront of all transactions will help solidify trust and drive sustainable growth. So, your product looks good, tastes good, and has very positive reviews. Customers can’t get enough; they are voting with their wallets for your product. But there is a third part of information economics you may be missing.

Credence

Credence attributes rely on information asymmetry. Think of used cars as a textbook example: sellers of used cars rely on asymmetry to motivate purchases. Highway miles, adult driven, oil changes every 3,000 miles, etc. are claims that can only be verified by the seller, the buyer has no way of knowing if these are true or not. Credence attributes can’t be verified by the seller due to lack of knowledge or expertise (Ford et al, 1988). The same goes for a consumable good like cannabis, only the grower or manufacturer knows what occurred in the “back of the house.” Product safety, therefore, is a credence attribute of cannabis products.

Investing in credence attributes in a young market may seem cost prohibitive. Many in the cannabis industry simply want to follow whatever the state they operate in dictates as the minimum allowable. In hemp we see states that require QR codes on each product that link to a COA, but many do not. Does the cost to produce the COA and QR code make a product more eye-catching or enhance the experiences? No, but those producing it may pay a hefty price if and when the product makes someone sick.

If a firm relies on fragmented, disparate regulatory bodies to dictate their investments in product safety, they will eventually face credence issues. Is smokable flower grown in Texas safer than that grown in Maine? We don’t have data to support either regulation’s effectiveness, so a firm or industry must dictate what the standard is and stick to it.

We need only look at the leafy green industry to see an example of a product that did not break any regulatory guidelines yet continued to sell a good with very negative credence attributes. How long were folks getting sick from leafy greens prior to them identifying the source? No one knows and that is what makes credence attributes so hard to pin down and develop an ROI formula for. Inputs that yield not-sick people aren’t known until someone gets sick. For leafy greens, they had an advantage – years of studies showing that they were good for you. Cannabis, unfortunately, doesn’t have that leg to stand on and faces an uphill battle gaining public trust.

As soccer moms (and dads) across the nation start to work cannabis into their play date wine sessions, the industry must ensure that they are investing in all avenues of information economics. A level playing field where transparency is at the forefront of all transactions will help solidify trust and drive sustainable growth.


References

Patterson, M. (2017). The economics of information. In Antitrust Law in the New Economy (pp. 39-60). Cambridge, Massachusetts; London, England: Harvard University Press. Retrieved February 7, 2020, from www.jstor.org/stable/j.ctvc2rkm6.6

Ford, G., Smith, D.,  and Swasy, J. (1988), An Empirical Test of the Search, Experience and Credence Attributes Framework, in NA – Advances in Consumer Research Volume 15, eds. Micheal J. Houston, Provo, UT : Association for Consumer Research, Pages: 239-244.

Practical Advice on How to Avoid a TCPA Suit

By Paul Gipson
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Texting consumers is a very effective means to drive engagement and ultimately sales. Text messages have outpaced emails when looking at conversion and click-thru rates. In fact, 95% of texts are read in ninety seconds or less! While text messages can be a great way to engage with prospects and customers, the FCC’s Telephone Consumer Protection Act (TCPA) is a regulation you need to be mindful of. In fact, the average cost of a TCPA settlement is over $6m dollars, which doesn’t include legal fees or reputational damage.

Over the past few years, there have been about 4,000 TCPA cases filed annually. Take a look at the growth:

Companies are being targeted for various reasons, but there are a few that I’ll cover below along with some advice on how to avoid TCPA suits.

See if you can spot the trend in these cases:

  • Papa Johns: $16.5m settlement due to texting pizza specials to consumers without their consent.
  • Abercrombie & Fitch: $10m settlement due to texting store promotions to consumers without their consent.
  • Rack Room Shoes: $26m settlement for texting their reward program members with various sales without their consent.

Do any of these campaigns sound like something your company is engaged in?

So, you’ve got someone who has signed up for a rewards program, wants to receive deals, or has provided their number to your company for other purposes, but you are concerned about the TCPA (hopefully). Based on my experience working with hundreds of clients at CompliancePoint, here’s where I think you should start. But first…

Quick assumption: Your company is using an automated system to send both informational and promotional texts. Examples include “blast campaigns” (upcoming sale) or “triggered campaigns” (signed up for rewards).

Quick point: Just because the text message says your store is having a sale but doesn’t ask the consumer to buy anything on the message, you may think it’s not considered “telemarketing”. This is wrong. Any plan to sell now or in the future through direct marketing is telemarketing and subject to the TCPA.

Here are my top 5 things to consider:

  1. Obtain consent. This is not achieved by simply having a number provided by the consumer. Instead, the consumer must affirmatively agree to receive promotional calls/texts by automated means. This is done through a clear disclosure and often accompanied by an unchecked checkbox.
  2. Honor opt-outs. This seems obvious right? Provide instructions on how to opt-out and look for other phrases like “stop/quit/cancel”. Opt-outs should occur immediately with most common texting platforms.
  3. Keep records. If you receive a complaint, you want to be able to respond confidently and records help you do that. The key records to maintain are your texting records (the phone numbers you texted, the date/time of the text, and the content of the text), your consent opt-in forms, and opt-out requests from consumers with dates. Ask yourself: what records do you need to prove you had consent, and what records prove you didn’t text a consumer after they opted out.
  4. Only text consumers between the hours of 8AM and 9PM according to their time zone. I always recommend going off address and not phone number due to cellphone mobility. If you text a California number at 8PM, but the phone owner lives in New York, you might get a few complaints.
  5. Monitor compliance with these items. Another one that seems obvious, yet most companies fail to do so, and you see above what happens. I guarantee you’ll find issues with most audits.

Bonus – here is a more comprehensive checklist on how to achieve a Safe-Harbor defense.

This article is not intended to be a scare tactic. The TCPA legal landscape is rampant and consumers are more aware now than ever of their rights. A quick Google search of “Cannabis TCPA” helps to illustrate the fact that this industry, like most, is not immune. However, with proper compliance parameters in place, your company can enjoy the benefits of texting with consumers with peace of mind.

Consumer Protection Laws & CBD Products—What You Need to Know Before Going to Market

By Jonathan C. Sandler, Alissa Gardenswartz
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By now, cannabis companies have heard that the Food and Drug Administration (FDA) has issued a slew of warning letters to sellers of CBD products for selling unapproved and mislabeled drugs and illegally adulterated food, as prohibited by the Federal Food, Drug and Cosmetic Act. However, companies marketing CBD products should know that making any health-related claims about their products also exposes them to liability under state and federal consumer protection laws. These laws additionally prevent CBD sellers from misrepresenting how much CBD is contained in their products, and even govern how companies communicate with their customers via text message. As the former head of consumer protection enforcement in Colorado and a lawyer routinely defending consumer protection class actions in California, we have seen firsthand how not considering these laws when developing a sales and marketing strategy can result in protracted and expensive litigation.

Consumer Protection Laws – Federal and State

Section 5 of the Federal Trade Commission (FTC) Act provides that “unfair or deceptive acts or practices in or affecting commerce . . . are declared unlawful.”1 The FTC enforces this law, and has clarified that “deceptive” practices involve a material representation, omission or practice that is likely to mislead a reasonable consumer under the circumstances.In other words, a claim is deceptive if an average consumer would believe and rely on the misleading claim to buy something. With the rise of social media marketing, the FTC has also issued disclosure guidelines for companies and influencers promoting products online.3 Every state has some form of consumer protection statute that similarly prevents deceptive marketing, and is typically enforced by the state’s attorney general. Many state laws also allow for consumers to bring actions themselves.

Both the FTC and state attorneys general have used these laws for decades against companies making scientifically unsupported health claims about their products. Just this month, the FTC and the Maine attorney general filed a lawsuit against two dietary supplement companies who were claiming that their products were a “miraculous natural solution” for life-threatening diseases. According to the lawsuit, the companies violated a 2018 settlement that required them to not make any health claims about their products without first conducting at least one randomized, double-blind, placebo-controlled trial to support the claims.4 While much of the enforcement around dietary supplements has focused on unsubstantiated health claims, other actions have been brought for improper “expert” endorsements as well as misrepresenting the amount of active ingredient contained in the supplement.5 In other words, these laws are used to police all manner of labelling and marketing of products, including those containing CBD. The FTC has already issued warning letters to CBD companies several times this year, and has stated that CBD sellers could be subject to enforcement for making unsubstantiated health claims.6

While consumer protection laws are largely focused on the content of advertisements, there are also laws that address how sellers can communicate with consumers. The Telephone Consumer Protection Act (TCPA) restricts telemarketing and the use of automated systems to contact consumers, and applies to both voice calls and text messaging. Both the FTC and state attorneys general can enforce the TCPA, and consumers can bring private TCPA actions as well. Because the TCPA allows for courts to award $500 per violation—that is, per illegal call or text—companies can face judgments into the millions of dollars.

Recent Consumer Protection Lawsuits in the Cannabis Industry

Cannabis is proving to be an attractive target for consumer protection litigation.All companies need to navigate consumer protection laws when they market their products, but class action lawyers may be pursuing cannabis companies in particular because of the products’ legal uncertainty, and because they provide opportunities for unique claims of deception. For example, a nationwide class of consumers recently filed a lawsuit in California against a CBD company that had received a warning letter from the FDA in November of this year, alleging that they would not have purchased the company’s CBD products if they knew selling the items was illegal.7 The consumers claimed violations of a variety of California and Arizona consumer protection laws, including those related to breach of warranty and unfair competition. Other lawsuits have been brought because products did not contain the amount of CBD as represented on the label, or because the product claimed to not contain THC when it did.8

Cannabis companies have been subject to TCPA class actions as well. Florida’s largest medical marijuana company has been accused of spamming customers with unwanted texts in violation of the TCPA.9 A dispensary with multiple locations in Colorado was also the subject of a TCPA class action complaint in Florida alleging that it did not obtain prior consent from consumers prior to texting them.10

Cannabis is proving to be an attractive target for consumer protection litigation. However, companies can head off lawsuits by thoroughly vetting their marketing strategies with experienced consumer protection lawyers before going to market.


References

 

  1.  15 U.S.C. Sec. 45(a)(1).
  2. See FTC Policy Statement on Deception, October 14, 1983.
  3. See Disclosures 101 for Social Media Influencers at https://www.ftc.gov/tips-advice/business-center/guidance/disclosures-101-social-media-influencers.
  4. See https://www.ftc.gov/news-events/press-releases/2019/12/ftc-state-maine-file-contempt-action-against-dietary-supplement.
  5. See FTC v. Nobetes Corp., Case No. 2:18-cv-10068 (C. D. Cal) (complaint against supplement company for using deceptive endorsements); “New York Attorney General Targets Mislabeled Herbal Supplements,” https://www.npr.org/2015/02/03/383578263/new-york-attorney-general-targets-mislabeled-herbal-supplements. (detailing the New York attorney general’s investigation of herbal supplements, and finding that they did not contain the ingredients as advertised).
  6. See https://www.ftc.gov/news-events/blogs/business-blog/2019/09/making-cbd-health-claims-careful-disseminating.
  7. Fausett et al. v. KOI CBD, LLC., Case No. 2:19-cv-10318 (C. D. Cal).
  8. Potter et al v. PotNetwork Holdings, Inc., Diamond CBD, Inc., and First Capital Venture Co., Case No. 19-cv-24017, (S. D. FL); Horn v. Medical Marijuana, Inc., Case No. 15-cv-701-FPG, (W.D.N.Y.).
  9. Jaslow v. Trulieve, Inc., Case No. 4:19-cv-RH-CAS (N.D. Fla.).
  10. Stinnett v. Hobby Farms, LLC d/b/a A Cut Above, Case No. 9:18-cv-81449-RLR (S.D. Fla.)

The Secret to Marketing Cannabis to Women

By Jacquie Maynard
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The world is changing, and women are the ones changing it. Classic methods of advertising to women just don’t work anymore, and worse, make you seem outdated and out of touch.

According to a 2017 study by BDS Analytics, 45 percent of cannabis users are women and that number is quickly rising. It could be even higher since according to Van Der Pop’s Women & Weed survey, 66 percent of women hide their cannabis use. No one seems to be able to agree on the exact figure, but experts do agree that women are the fastest growing market in the cannabis industry.

Harvard Business Review reported in their 2009 article “The Female Economy” that worldwide, women control nearly $30 trillion in household spending and make the majority of purchasing decisions in the family. If they’re not directly purchasing something with their $18 trillion in collective income, they are influencing others’ purchasing decisions. Often, they are the primary caregivers in their family circles, making them responsible for buying things for their children, or on behalf of their elderly loved ones.

Gender can often be a marketing blind spot, even though it’s the biggest influence on consumer behavior, according to a 2017 report from The Journal of Business and Management. Now that the number of women working in the cannabis industry is at 36 percent and rising, they are using their experiences and perspectives to market effortlessly to women, and it shows. If your brand is ignoring this powerful demographic, you’d better catch up quick.

Why do women use cannabis products?

Women are into cannabis wellness, but like to get high, too.

In Headset’s 2019 report entitled “What Women Want in Cannabis: Shopping Trends Among Female Cannabis Consumers,” some of the most popular cannabis products among women are still classics like flower and pre-rolls, but women are more likely than men to try capsules, topicals and sprays. They are fascinated by the concept of CBD helping them with issues like menstrual cramps, body and muscle pain, and even sensitive skin, but enjoy products with THC as well.

In general, women’s purchases in the cannabis industry end up being more centred towards wellness, but it’s not all about spa treatments and relaxing.

Sex sells, but not in the way you think.

The structure of cannabidiol (CBD), one of 400 active compounds found in cannabis.

There has been a growing interest in using cannabis and CBD for women’s sexual health. Researchers haven’t quite caught up with the science yet, but researchers at the Center for Sexual Health at Saint Louis University think that cannabis and CBD can help women overcome pain and anxiety during sex. Foria Wellness is a brand that sells CBD suppositories and lubricants that help women have a better sex life. Not only are their products seemingly effective, but they provide loads of education to their audience and work with influencers to build their community.

Beauty is Pain.

Being a woman is hard. Or at least, painful. Between walking in heels, getting in an intense workout, and feeling the stress of general life, women end up with quite a few aches and pains. Topicals and bath bombs seem to be leading the way in this area. Celebrity stylists have been using CBD lotions on the feet of starlets before a long night on the red carpet, and more brands are marketing their products to fitness buffs.

Market to specific kinds of women.Skincare is another burgeoning market. Van Der Pop reports that 60 percent of women are interested in cannabis skin care. Again, the science hasn’t quite caught up, but anecdotally it has been shown to have anti-bacterial and anti-inflammatory properties when applied to the skin. Women with psoriasis, eczema and other skin troubles are also finding relief with CBD. A bunch of large retail brands have already jumped on the bandwagon and indie brands are starting to pop up as well.

Life is Stressful.

A report from Spate and Landing International found that there has been a 24 percent increase in consumer interest in anxiety. Young people these days are under more pressure than ever, and they are turning to their products to solve it. The American Psychological Association says that 12 percent of millennials are officially diagnosed with an anxiety disorder, so it’s no surprise that anxiety and depression are the fastest-growing search terms associated with CBD.

Does this make me a bad mom?

Being a mom is stressful, and a lot of moms have been toking since before their kids were born, so after the kids are asleep they relax on the porch with a joint. It’s right for them, but the stigma is still there and they can feel it. Over 70 percent of women believe that there is still a stigma attached to cannabis use. The answer is not only marketing to Mary Jane moms but also using marketing to help end the stigma around cannabis consumption.

What do women look for in cannabis brands?

Women use cannabis for different reasons than men, so it makes sense that they would look for different things in a cannabis brand.

“Traditionally, marketing weed to men has either been about projecting fantasy, or appealing to the everyday guy that men feel like they could smoke a bowl with,” Mary Pryor, CEO and co-founder of Cannaclusive, told AdAge. “But women want to know what gets the job done without having to do too much work to know what we’re going to get.”

That means lots of education and support at the customer level. Women are used to a higher level of customer service and will most certainly take their business elsewhere if they feel they aren’t being heard or served effectively.

Women buy things that make them feel good, or items that help them express themselves, so aesthetic is important, too. There was a time in cannabis culture when most cannabis accessories had flames, or skulls, or aliens, and while that may appeal to some women, the majority want a more feminine and streamlined look. Brands like Van Der Pop offer modern designs that will readily fit into the consumer’s decor, and Lord Jones packages their CBD oil with an ornate style that invokes more of a luxury perfume brand than a cannabis product. Women are looking for a product that will look good on their shelf or in their homes.

The Secret? Know Your Audience

The first rule of marketing to women is: don’t market to women.

The absolute best way to reach women is to create authentic content for women, by women, addressing their specific concerns.At least, not women as a mass, general group. Market to specific kinds of women. Like cannabis, women come in many beautiful and exotic varieties, each one more interesting and lovely than the last, and each with their own values and shopping habits. For example, the wellness guru will have different needs from the sun-weathered gardener, who will have different needs from the stressed-out mom with a sore back.

Here are some time-tested generalizations that could help you out, though. The Journal of Business and Management reports that women are more likely to appreciate finer distinctions and enjoy more of a conversational style dialogue. When it comes to problem-solving, women care more about how a problem is solved, and like sharing and discussing it. Similarly, shopping is also a process where women tend to enjoy more interaction and take more pride in finding the best bang for their buck and the best product for them.

According to Bloomberg, you should study women as if they were a foreign market. All groups of women have their own culture, values and even language. The key here is to get to know each and every one of these personas so that you can create a targeted strategy to reach them specifically.

The absolute best way to reach women is to create authentic content for women, by women, addressing their specific concerns. Create a community for them. Formulate products for them that actually work. Hire them, listen to them, hear them and they will choose your brand every time.

The CalCannabis Appellations Project Is About to Spark a New Chapter in Place-Based Branding

By Amy Steinfeld, Jack Ucciferri
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Connoisseurs know that pairing a fine cut of steak with a Napa Valley cabernet sauvignon is a sure winner. But how many are aware that pairing strawberry cheesecake with a certified Santa Cruz Blue Dream cannabis strain creates an equally delicate palatal synergy? Thanks to the California Department of Food and Agriculture’s CalCannabis Appellations Project (“CAP”), premium cannabis regions will soon have the potential to capitalize on such newfound awareness among discerning consumers.

For decades, cannabis connoisseurs have been willing to pay a premium for flower said to have been grown in certain regions or with certain techniques, but because of cannabis’ legal status, supply chains have been opaque. As a result, cultivators of distinct cannabis strains struggled to capture the full market potential of their products. That has begun to shift with implementation of California’s Cannabis Track-and-Trace System. The costs associated with implementation of the METRC1 system have been bemoaned by many in the industry, but there is also tremendous potential value in having the most transparent supply chain in the world. The CalCannabis Appellations Project is the vehicle through which brands will be able to harness that value.

The underlying premise behind the CalCannabis Appellations Project is that the distinctive qualities of a cannabis product are often attributable to where and how the plant is grown. Through this project, CalCannabis is developing a statewide appellations system2 that will allow qualifying licensed cultivators to effectively communicate information about their cannabis crops (i.e., the standards, practices and/or varietals used) through labels, advertisements and other marketing techniques. It will also prevent disingenuous cannabis cultivators from making inaccurate claims about where and how a product is grown, which protects the integrity and value of the appellation.

What is an appellation?

In general terms, an appellation is an identifying name, title or label that can be legally defined and protected. Appellations are most commonly used in the wine industry to geographically identify the origin of grapes in a particular bottle. This place-based identification system comes from an understanding that certain regions have unique environmental and growing characteristics, which result in a product that cannot be produced from other regions even when the same varietals are used. Famous wine appellations or American Viticultural Areas (AVAs) in California include the Napa Valley and Santa Ynez AVAs, and sub-AVAs such as the Russian River Valley AVA, located within the larger Sonoma County AVA.

Recognizing there are also growing regions that produce uniquely distinctive cannabis, CalCannabis is developing a process for:

  1. Establishing an appellation (i.e., identifying regions that produce distinctive cannabis and defining standards, practices and/or varietals that must be used in those regions to qualify for an appellation); and
  2. Qualifying to use a particular appellation once they are established (i.e., determining the cannabis cultivators that can legally label or market themselves as belonging to a particular appellation).

While the state has not released program details, it’s likely that cultivators will have to demonstrate their outdoor-grown cannabis is distinctly unique.3 CalCannabis has until Jan. 21, 2021,4 to establish these processes, but a draft is expected to be released by early January 2020.5 This is an opportunity for cultivators to organize and participate in the process to define and create unique local appellations.

What are the benefits of an appellations system?

Napa wine country
Image: James Faulkner, Flickr

Appellations benefit both cannabis cultivators and consumers. It allows small farmers to capture the value that consumers place on unique and local cannabis products. Allowing for product differentiation through an appellations system will prevent cannabis from becoming a commodity—a situation that could result in indistinguishable products and a single market price for cannabis regardless of how or where it is grown. Thus, an appellations system protects not only local economies and farming communities, but also consumers that care about the origin and growing practices of their cannabis.

A criticism of appellations, particularly in the wine industry, is that they can disincentivize innovation and industry growth when strict growing practices and standards are required to be a part of an appellation. This will be an important consideration as CalCannabis establishes its appellations system.

County of Origin

In addition to setting up an appellations system, the CalCannabis Appellations Project will expand upon current county of origin regulations. Unlike an appellation designation, the county of origin designation is designed to be much more inclusive—it can currently be used on any cannabis product as long as 100% of the cannabis is grown within the designated county.6 Whereas an appellation will communicate information about the quality of a cannabis product and how it was produced, a county of origin designation is more like a “Made In” label. For example, a county of origin designation can be applied to indoor cannabis whereas an appellation will likely only include sun-grown cannabis.

There is also a desire to allow city of origin designations in addition to county of origin designations, which would enable products grown wholly within the political boundaries of a city to further differentiate themselves.7 As the legal cannabis landscape changes nationwide, it may also be important to have a statewide appellation allowing products to be marketed as “Grown in California.

What should cannabis cultivation regions be doing now?

After CalCannabis releases a draft process for establishing an appellation, the next steps will be clarified. However, not everyone is waiting. For instance, growers in Mendocino County have already started to organize.8 The Mendocino Appellations Project divided the county into 11 unique subregions based on regional growing conditions and practices that could potentially be turned into appellations in the future. The goal of the appellations outlined by the Mendocino Appellations Project is to protect cannabis products coming out of Mendocino County and preserve the region’s growing heritage.

A group in Sonoma County is also discussing the establishment of appellations with the hope that it will help differentiate their cannabis and draw attention to the unique microclimate and soil structure in parts of Sonoma County.9 The groups involved in these discussions also believe it will allow cultivators to develop strict growing standards and to protect certain strains, while creating new jobs and encouraging agritourism. Appellations will become increasingly important as sophisticated consumers begin to select quality cannabis that aligns with their preferences.


References

  1. METRC is the third-party-owned software contracted by California authorities to implement the commercial cannabis track-and-trace system “from seed-to-sale.”
  2. Passage of Senate Bill 185 calls for the use of the term “appellations of origin” instead of “appellations.”
  3. Based on comments made during the October 23 Cannabis Advisory Committee Meeting.
  4. Business and Professions Code Section 26063.
  5. Based on comments made during the October 23 Cannabis Advisory Committee Meeting.
  6. Business and Professions Code Section 26063(a).
  7. Based on comments made during the October 23 Cannabis Advisory Committee Meeting.
  8. https://swamiselect.com/mendocino-appellation-project/
  9. https://www.sonomacountygazette.com/sonoma-county-news/cannabis-appellations-the-small-cannabis-farmers-elyon-cannabis.
Jennifer Whetzel

Branding for Cannabis Companies 101: Part 3

By Jennifer Whetzel
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Jennifer Whetzel

Editor’s Note: In Part 1, Jennifer Whetzel introduced the concepts of branding, marketing and advertising for cannabis companies. Part 2 took a closer look at the benefits of branding. Part 3, published below, illustrates the different archetypes to use in branding.


People talk a lot about consistency when it comes to branding; after all, it’s a feature of the world’s most lucrative consumer brands (just ask Apple, Nike and Starbucks). As a result, companies will spend buckets of money on ensuring that their look and sensibility are uniform when marketing materials are out in the wild.

This consistency makes it easier for customers to recognize your brand. But the most important effect of consistent branding isn’t just that customers will recognize you– it’s that they’ll trust you.

 Trust is the product of familiarity and consistency, and it’s far easier to be consistent across platforms when you have a strong sense of who you are as a brand. Strong branding helps you stick out in a crowd, and repeated viewing reinforces who you are to consumers. By extension, a consumer’s ability to quickly recognize you means that when they see your brand in public, they’re more focused on your message than picking you out of the crowd. And one way for consumers to recognize you is through archetypes.

What a Character!

Branding: Who
Marketing: What & Why
Advertising: Where & When

Archetypes are typical examples of a person or concept that appear across different fields of literature, art and behavior; in other words, archetypes are familiar concepts that appear in storytelling. An outlaw is an example of an archetype. If an outlaw appears in a story, you may find yourself immediately drawing conclusions about that character’s motivations and sensibility and imagining how the outlaw fits into the story.

This demonstrates how archetypes can serve as a kind of shorthand when you’re telling your own brand story. We’ve created 16 archetypes–brand characters, if you will–for the cannabis industry, such as the Activist, the Doctor and the Stoner, among others. These archetypes all have a specific look and tone that you can use in your communications to keep your messaging consistent and effective so that people are focusing on your message rather than sussing out who you are and what you stand for.

For one thing, this makes your marketing efforts easier on you because you’ll be able to tell what makes sense in the context of your archetype. For example, the Doctor Archetype wouldn’t be sharing a 4/20 playlist, and an Activist Archetype wouldn’t be arguing the merits of different CBD bath bombs. You don’t want consumers scratching their heads, and having an archetype helps to determine what kind of behavior is appropriate for your brand.

Moreover, it helps to establish consistent behavior that your consumers see. Consistency helps to build trust because it helps customers build expectations. When you build expectations and you act in a way that immediately feels familiar to them, they’ll feel more comfortable with you. Imagine your closest friends; you have a strong sense of who they are. You know that your friend will refuse to order their own fries and then pick at your own. But there’s some comfort in this because when a person acts exactly as you expect, it makes you feel as though you know them deeply. And when there aren’t any mysteries, you can focus on what lies ahead in your friendship.

You know that Apple stands for sleek design and innovation.

Brands operate the same way. When you see an Apple ad, you don’t have to rack your brains for context before you absorb their message. You know that Apple stands for sleek design and innovation, so when you see an Apple ad, Apple doesn’t have to keep reintroducing those values. Instead, you can focus on the new product or idea being featured, knowing that the sleek design and innovation are already baked in– and it’s because Apple has done decades of legwork making sure that that’s the case.

Archetypes make that legwork even more efficient by giving you those values as part of a character. If you think of your brand as a character, it immediately makes your communication more human. For instance, like Apple, the Scientist Archetype also values innovation. But when you write social posts as a Scientist Archetype rather than a brand, it makes it easier to connect with folks because you’re writing from a particular person’s perspective rather than a bulleted list of company values.

It also grants you more structure in your brand strategy because it allows you to envision a whole person. When you’re writing a post, for example, you can ask yourself, “Would the Scientist say this?” You can envision this Archetype’s mannerisms and sensibility, and being able to do that makes it far easier to know what will feel real to consumers– and by extension, trustworthy.

That ability to build trust is what will ultimately decide how successful your brand is in this burgeoning industry. You’ll be facing more competition than ever and you may eventually find yourself facing companies selling near-identical products. The brands that will win out will be the ones that know how to build trust with consumers with a cohesive brand strategy. With the right strategy, that could be you.

FDAlogo

FDA Sends Warning Letters to Curaleaf

By Aaron G. Biros
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FDAlogo

Curaleaf Hemp, a well-known and publicly traded cannabis company, made headlines this week for all the wrong reasons. The US Food & Drug Administration (FDA) sent a warning letter to Curaleaf President Joseph Lusardi for making unsubstantiated health claims and for misbranding their products as drugs.

FDAThe health claims in question appear to be removed from their website and social media accounts. In the warning letter, the FDA cites numerous claims made on Curaleaf’s website, Twitter and Facebook accounts. You can check out the health claims they found here, but it’s essentially a list of instances where Curaleaf said their products can be used to treat specific conditions. They claimed their CBD vape pen can be used for chronic pain and said another one of their products is a “[S]oothing tincture for chronic pain.”

For most of the health claims the FDA cited, it appeared they were articles or blog posts on Curaleaf’s website. Take a look at some examples of statements that should not be posted on a CBD products website (taken from the warning letter found here):

  • “CBD has also been shown to be effective in treating Parkinson’s disease.”
  • “CBD has been linked to the effective treatment of Alzheimer’s disease . . ..”
  • “CBD is being adopted more and more as a natural alternative to pharmaceutical-grade treatments for depression and anxiety.”
  • “CBD can also be used in conjunction with opioid medications, and a number of studies have demonstrated that CBD can in fact reduce the severity of opioid-related withdrawal and lessen the buildup of tolerance.”
  • “CBD has been demonstrated to have properties that counteract the growth of spread of cancer.”
  • “CBD was effective in killing human breast cancer cells.”
  • “Heart disease is one of the leading causes of death in the United States each year, and CBD does a number of things to deter it. The two most important of these are the ability to lower blood pressure, and the ability to promote good cholesterol and lower bad cholesterol.”

While the FDA is expediting their push to roll out hemp and CBD regulations, companies should still be cautious when marketing their products for interstate commerce. Dr. Amy Abernathy, Principal Deputy Commissioner and Acting CIO, said in a series of tweets earlier this month that the FDA is eager to get to work and plans to report on their progress by the end of summer. The public hearing they held back in May helped jumpstart their efforts to begin investigating regulation of the market.

Still, companies need to be careful when marketing CBD products. The FDA has made it abundantly clear in a lot of warning letters that drug claims are not allowed. Here are two articles that give advice on how companies should proceed with marketing and how to go about properly labeling their products.