When you take Las Vegas, make cannabis legal and add more than 18,000 industry pros, it’s hard not to have a damn good time. But, this year’s MJBizCon showcased progress and cannabis marketing insights, not only partying.
At the show, more than 670 companies showcased products and offerings, a 111-percent increase from last year, according to Marijuana Business Daily, which hosts the event. Nearly every sector was represented, ranging from cultivation equipment companies to security.
With that many vendors and that much foot traffic, it wasn’t hard to ID some significant macro trends playing out in the cannabis industry. I talked with tons of people – and observed plenty of vendors – to sift for trends that will impact how brands ultimately shape their identity and messaging.
1. The industry is Canada obsessed
Medical marijuana is legal in Canada, but the market is about to blow up, with recreational use becoming legal in July 2018. And that’s what everyone was talking about at MJBizCon.
Why? Because once Canada cannabis is fully legal, production is going to skyrocket. Currently, there are 74 licensed producers for medical purposes, but the number of licenses is expected to exceed 300 over the next year.
With that kind of potential, everyone from greenhouse builders to bud trimmers is drooling over Canada and trying to jockey for position. Even current operations are going to need to expand once the masses can use cannabis freely—that includes major players such as Tweed Farms, Canada’s largest cannabis producer.
Talking with owners of companies producing things like modular indoor grow facilities, as well as investors, it became apparent to me that Canada is so important because it’s not nearly as saturated as the U.S.
It’s worth noting that Canada is aware of its popularity. Seventy-five percent of the non-U.S. attendees were from Canada, as they try to leverage their new-found freedoms.
From a cannabis marketing and communications standpoint, the same opportunities exist in the U.S. and Canada. Companies will need branding, public relations, social media strategy and more.
The key to success for companies in the cannabis industry – and those leading their marketing and communications efforts – will be to understand the nuances of the Canadian industry compared to the U.S. For instance, in Canada, the government controls all dispensaries. That alone is a huge difference that will dictate how cannabis brands talk to their audiences (more on this in another post).
2. Corporate America wants its weed
For anyone working in the category, it’s no secret that large corporations such as Scotts Miracle-Gro are buying up companies serving the cannabis industry. Even tech companies, including Microsoft, are getting in on the action.
As expected, this is stirring up anxiety and angst among many in the industry, and excitement among others (though, few will admit it openly because they’re reluctant to support “big business”). But regardless of how the corporate invasion is received among industry vets and purists, this is clear: Big biz is here to stay and the impact is going to be huge.
That’s because with big business comes big budgets. They have the ability—and capital—to innovate and invest at a rapid pace. They have operations efficiencies built from years of practice. And they’re experts in things like market research and consumer behaviors.
A lot of small and mid-sized vendors at the show, especially those serving growers, are concerned. But while things may sound ominous, they’re not that bad— at all. Just like in the beer industry, we’re going to have the Anheuser-Busch of cannabis one day. But, we’re also going to have the Surlys, Founders and New Glarus’ of the world, serving up craft buds that are high quality, locally produced and sought out by consumers.
A number of nuanced points make this much more complex than a few paragraphs can describe. Ultimately, though, success won’t be about size or who has the richest board of directors. Instead, it will come down to each company finding a way to define their brands and refine their strategies to put a laser focus on their customers’ needs, which in this category are complex and fluid.
3. Everyone has a competitor – or four
Other than the obsession with Canada (seriously, it got weird), one of the most significant things I noticed was the number of brands competing with essentially the same product.
At last year’s show, I saw the same thing, but this year’s MJBizCon had a lot of clones. I talked to a number of companies making trimmers, custom soils, lights and every other ancillary product imaginable.
In such a young industry, this isn’t surprising—and it’s not a bad thing. The good brands are starting to rise to the top and the number of competitors is pushing innovation. The reason I bring it up isn’t that the market is saturated (there is plenty of room for multiple companies with similar offerings), but instead because the need for brand identity is evident for so many of the players, including industry leaders.
So many brands have succeeded to this point because demand has been so high. That’s going to continue but ultimately, those with strong brands that support the industry are going to win. The problem right now is that so few companies have strong brands.
For example, let’s talk logos, booth setup, collateral – you know, those things you can see at a show. I saw a lot of the same. Ancillary companies, especially, have been slow to brand appropriately for the industry. Others, default to stereo types.
4. We still have an identity crisis
There were many more brands at MJBizCon this year that had the look and feel of kick-ass companies anyone with a sense of style and brand strategy would say are getting things right. But out of nearly 700 vendors, we still have a long way to go.
A couple things are causing this identity crisis:
- The industry is young and many companies haven’t needed strong branding/communications, because demand has been so high.
- B2B historically doesn’t seek out top-tier marketing as early and frequently as B2C (the show is primarily B2B vendors).
- Many of the companies are young, therefore lacking capital to spend on marketing when more pressing priorities such as sales and operations get investment first.
Not every company should look and feel the same, or have the same ethos and mission. But like any category, each brand in the cannabis industry needs to have a consistent look, feel and identity, so their customers can – and want to – connect with them. This is over simplified but cannabis companies need to look as cool and dialed-in as the products they’re providing. Ultimately, this is a lifestyle category and that vibe carries over to B2B companies in cannabis.
You need to have a logo I want to wear. And have a brand identity that matches your consumer. Don’t suck on social. Is that asking too much? No. But, as anyone who walked the show will attest, there are a lot of bad logos in the cannabis industry.
This is just the beginning …
Here’s the thing, some of these issues likely could be seen in any young industry. These are the growing pains every industry goes through, from tech to weed. We’re going to see more competition. Big companies will continue to buy up the little guys and those willing to sell.
And while even the best CBD oil can’t alleviate the inevitable agony that comes with these challenges, every brand in the industry has the potential right now to win. That starts with great product. But it’s sustained through great marketing and communications.