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Crafting Cannabis Brand Loyalty

In Canada’s cannabis industry, brand loyalty is shaped by two competing narratives. One emphasizes smart marketing campaigns as key strategies, while the other argues that the lack of prominent brands is due to issues of availability and consistency, as well as the cannabis consumer’s desire for novelty.

The focus here is brand loyalty as a goal for every cannabis company, likened to industries such as fashion, cosmetics and beverage alcohol. This is a comparison made by global cannabis consultant, Mitchell Osak. 

Osak, who has experience working with marketing powerhouse Procter & Gamble, defines branding as “the ability of a product or service to drive high awareness, repurchase, plus the ability to command a price premium in the marketplace versus its competitor.”   

Despite the initial marketing hype surrounding regulated weed, where “more money was spent; more heat was generated with a lot less light,” he says, “at the end of the day, I think it’s because of the restrictions.” He also witnessed the reflex of hurling cash at a problem without fully understanding consumer and channel needs.  

Recently Osak spoke on a panel at Benzinga on the art of storytelling, and echoing the advice he provides international clients, told the room that in order to brand, marketers first must study human behaviour and connect the “latent primordial desires and fears we all have.” Or employ an “anthropological lens” to the brand’s market position and benefits before embracing the tactical branding considerations.  

“We have low brand development in this industry,” says the expert who has worked on brands like Tide, Cascade and Cover Girl. “We have nothing like that almost six years into cannabis.” 

Osak believes that even with the regulations we have in place, eventually we’ll get there, but it will take longer. “It will take an evaporation of lots of brands in the marketplace, such that you’re left with fewer but stronger ones – more consistent and standardized ones,” he says.  

A segmented cannabis marketplace

Understanding consumer needs means offering more product by segments. This is emerging for target groups by leveraging specific product profiles. 

Producers might cater flower for the connoisseur, or for first time smokers. They may market a brand of edibles for seniors. Aiming products at different segments and at different occasions is the key to satisfying different needs. 

“It’s the difference between a Chanel dress and a Zara dress,” says Osak. 

The emergence of organic product offerings serves as an example of a mix up between feature and benefit, where growers confused organics as a benefit rather than a feature. Branders didn’t connect organics with a consumer benefit or outcome, such as eliciting a cleaner high using living soil, which is a message that needed to come through in the marketing. 

“Quality means different things to different people,” he says, and in this industry, “high terpenes or high THC became a proxy for quality, when in fact it’s potency, not quality.” 

What matters is the consistent, quality product at the right price. “Terpenes and THC matter, but they matter for the need state of the consumer when they want to consume it.” Of course, “price per buzz” is going to drive a lot of consumer preference, however the entrance of low THC products on the market signals the start of a sophisticated industry.  

While the market is starting to segment – cutting across gender and sex, income and region – there will still be “switchers in all directions,” says Osak, who come in for the 99-dollar ounce, but leave with the new infused pre-roll. 

The reason why brands haven’t yet “entrenched themselves in people’s minds,” is that there is high incentive to switch brands. There is always new product coming out, some producers are unable to sustain consistent production, and consumer tastes evolve.  

Superette by SNDL

Cannabis vs. fashion

With the churning out of new strains and product formats, cannabis resembles the fashion industry that may recycle styles but never stagnates. With fashion comes loyalty to houses of brands, and less to a particular style or fashion.

Cannabis companies have frequent SKU turnover, compounded by stocking issues. And with consistent new micro licenses who generally grow better-quality product, Osak makes the analogy to the wine industry, where consumers opt for the region or the grape and less the winery. 

“It’s hard to build brands in a segregated, stratified high end wine world,” he says. “It takes decades if not hundreds of years.” The pace of innovation, constant need for capital and the number of producers in cannabis could hinder the ability to build brands in the market’s current state. 

So how can cannabis companies get a leg up amidst regulatory struggles, saturation and turnover? 

Brand activation

With early branders’ lack of consumer understanding, some companies recognized the challenges (namely the lack of ROI) and shifted to what the marketing expert calls brand activation. 

If brand management is the act of building a brand image through advertising and PR, then brand activation is what happens in the retail setting – also called trade or channel marketing.

“The power is when you get the overlap; when your brand activation or trade marketing enhances your brand promise and value proposition,” says Osak.  

Too much focus on brand building at the higher level never makes it to the budtenders in store. On the flipside, too much emphasis on sampling or swag can also damage a brand that sometimes requires the “allure of mystery.” Price signalling will support the quality message, but it’s how branders can tie it all together, like an overlapping Venn diagram, that can make all the difference.  

“You need your great sales reps hustling in store,” says Osak. “You need consumer and insights driven brand thinkers, and you need the product educators crafting the right message for budtenders and store managers about why the consumer should support them.” 

Branding in Retail: SNDL case study

Osak affirms that in many ways, retailers have done a better job than product companies at eliciting brand loyalty. “Partially because they have more levers to pull,” he says.  

For example, Alberta-based SNDL owns a variety of retail banners that are positioned to different market segments. With a store count of 190, they are the largest retail footprint in Canada operating four retail banners: Value Buds, Spiritleaf, Superette and their deep discount brand Firesale. 

“The value in our multi-banner approach means that we have something for everyone and a deep understanding of the customer.” – Marcie Kiziak, president of cannabis retail, SNDL

“When all retailers sell the same products, creating brand loyalty is critical and we lean into basics to support brand affinity,” says Marcie Kiziak, president of cannabis retail at SNDL. “While price and selection are key factors,” she says, “we heavily focus on the in-store experience and the expertise of our staff.” 

A multi-banner approach that caters to different demographics in a fluctuating market is a competitive advantage that enables a curated retail experience based on the location of the communities they’re in. “Looking at our two largest banners,” says Kiziak, “Value Buds focuses on value-driven, large-format convenience customers, while Spiritleaf consumers tend to be more casual and value trying new formats, producers and flavours.”

Moreover, “Firesale is a pilot concept focused on deep, deep value, and Superette is an award-winning, best price retailer that is uniquely designed for the community in which it operates,” says Kiziak, who works for a company that has captured the full scope of the customer base. 

SNDL gauges trends and community preferences using industry data, combined with real-time customer insights to identify and adapt to trends.

Consumer feedback is a pinnacle of their operations. Kiziak also emphasizes collaboration with industry partners that “help us understand the broader community and share insights across retailers, regulators and producers.”

SNDL’s agile business model, grounded in fundamentals and inventory management, enables them to respond well to market shifts. In addition to inventory management, they use other data points to align with consumer preferences, striving for “consistency, quality and value,” says Kiziak. “And data is the lever needed to effectively curate our menus to hit all those markers.”

Exception to the Rule: Pink Kush

Due to a number of competing factors such as marketing chokeholds and stocking limitations, there are few strong brands in Canadian cannabis today, with outliers such as Pink Kush and some from eastern Canada.  

Pure Sunfarms of Village Farms International (VFI), is among the largest global producers of cannabis and is home to the best-selling Pink Kush brand. “It really hit the sweet spot in terms of what consumers are looking for as they’re going from pre legalization to legalization,” says Maria Guest, Pure Sunfarms’ VP of brand. The Vancouver Island genetic holds a wide appeal among consumers, and it has a bit of everything says Guest: “The quintessential Kush has a nostalgia associated with it – the sweetness, the spiciness – it really captures the nostalgia of what Kush was pre legalization.” 

Guest spent 20 years in strategic brand marketing before shifting to the Delta, B.C. producer, that launched in the Canadian market in 2019, a 1.1 million square foot greenhouse facility previously converted from tomato production. 

For the last five years, Guest has overseen product development. She outlined the LP’s initial strategy of starting with one brand, Pure Sunfarms, before expanding into additional segments, such as their value brand Fraser Valley Weed Co. 

At the starting line of regulated cannabis, some LPs launched multiple brands at the same time, “placing bets before you really knew what the makeup of this brand-new industry is going to shape up to be,” says Guest.

“Even a year later when we launched, it was with one brand intentionally, to focus our efforts and build Pure Sunfarms with consumers.” After three years, they began expanding their portfolio to address the changing consumer trends and preferences with a multi-brand approach.  

Earlier this year, Pure Sunfarms launched Kush God, a Pink Kush cross catering to cannabis consumers looking to try something new. “Resting assured,” says Guest, “that they always come back to the ones they love.” 

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