Amy Andrle, co-owner of L’Eagle Services, believes targeted branding will be critical to expansion on a national and even international scale.
*The following article was originally printed in the December 2017 issue of Marijuana Venture, on sale now.
By recognizing the latest consumer trends, innovative business leaders in the cannabis industry are disrupting retail with an eye on removing negative connotations associated with marijuana and ultimately bringing the conversation to the mainstream.
At the DispensaryNext conference in Denver, a panel of industry professionals weighed in on hot-button issues and speculated about the future of cannabis marketing, branding and delivery. The panel featured Amy Andrle, owner of L’Eagle Services, a Denver-based cannabis retailer focused on sustainability; Joseph Hopkins, owner of The Greener Side in Eugene, Oregon; intellectual property attorney Jeremy Kapteyn from Rose Law Group in Scottsdale, Arizona; David Champion, co-founder of Baker Technologies, an online customer engagement platform for cannabis brands; and Tony Gallo, managing partner of Sapphire Risk Advisory Group, a security consulting company. With each panelist operating in a different segment of the cannabis space, their insight provided a diverse range of perspectives.
Changing Demographics
Industry experts agree that a “new” type of customer will represent a broader demographic — one that differs entirely from the cannabis consumer stereotype — and will create demand for products with different purposes.
“The typical cannabis consumer is going to change; they are going to evolve,” Andrle said. “Now we are starting to see the over-55 age demographic coming on board, as well as women and people seeking cannabis for purposes like athletic recovery, rather than just recreational use. Companies that are ready to accept new clientele from different demographics will be successful and stay afloat.”
In a competitive market, it’s worth noting that there are nearly 75 million Baby Boomers currently living in America. This, paired with the fact that Baby Boomers generally have more discretionary income than the 21- to 34-year-old age group, suggests that these more mature demographics could be a lucrative market. As such, retailers must adjust and find ways to appeal to customers in different demographics.
Founded in 2012 in Eugene, Oregon, The Greener Side takes a strategic approach to marketing and anticipating future consumer trends.
Marketing and Branding
As the cannabis industry matures, it will be crucial for marijuana brands to differentiate themselves, allowing retailers to build their brand with the possibility of national or even international expansion in the future.
Product design and packaging are crucial to differentiation. According to Hopkins, brands can learn how to accomplish this from other industries.
“When it comes to product design and packaging, brands should be looking to Apple and other successful models from all industries and finding opportunities there,” Hopkins said. “It takes being thoughtful and strategic, but it’s essential.”
In addition, brands should focus on ways that each cannabis product is unique. They should be willing to highlight the attention to detail with which products are created.
“I believe that the value of brand recognition for a superior product will happen,” Andrle said. “Consumers want a trail all the way back to where the ingredients in their edibles came from. When you concentrate trim for edibles or other forms of infused marijuana products, potential pesticides are concentrated too. This can be a concern for patients with delicate immune systems.”
As competition increases in the marketplace, strategic branding becomes especially important. With the recent success of the restaurant industry’s farm-to-table movement, the cannabis industry could capitalize on the trend and mirror a similar model in order to enhance brand value and establish trust. “There’s now an expectation among consumers who are learning more about the products, that they should know exactly what’s contained within the product they’re buying,” Champion said. “Demand is increasing for products that are uniform, immaculately branded and completely transparent.”
Catering to the new cannabis consumer could be the key to successfully marketing products and expanding the boundaries of the industry and its capabilities.
“We are seeing more brands identify their product with the potential effects a consumer will experience, including ‘relax’ and ‘energize,’” Andrle said. “Some clients respond to that because it’s easier to understand, so I think there will be marketing around that. But we will always include the strains for the cannabis connoisseurs.”
Although cannabis businesses are prohibited from many forms of conventional advertising (in Colorado, marijuana companies cannot advertise in a print publication unless at least 70% of its audience is older than 21), there are unique marketing opportunities that can align with a cannabis brand and reach a mainstream non-endemic audience.
“With greater divergence in user types comes new ways of marketing,” Champion said. “Now, it’s all about lifestyle marketing and collecting information on the user — finding out if they’re a music fan, a foodie, etc. — and finding ways to create marketing around these types of lifestyle factors so that we can connect specific user types with the right products.”
As a dispensary owner who operates within state regulations, Hopkins often looks for opportunities outside the cannabis sector.
“For example, we recently had a booth at a tattoo convention that was really successful,” he said. “It’s a great way to reach people who are from out of town — both patrons and vendors. We’re not playing price wars; we’re not on a race to the bottom. Instead, we’re reaching outside of the cannabis model and finding opportunities there.”
L’Eagle’s quaint dispensary storefront in Denver.
Delivery
As the demographics of cannabis consumers shift, methods of servicing them will do the same. For instance, product delivery is on the rise in states like Oregon, Nevada, California and Arizona, where users can have products brought to their doorstep. This is one of the hottest issues circulating in the industry today.
“The demand for delivery service exists among the new generation of cannabis consumers — and the industry is headed in that direction — so we want to be ready for that and be able to do it safely in order to ensure a positive customer experience,” Champion said.
Hopkins predicted a similar trend in the near future.
“The new cannabis consumer will want products delivered to their home. They will want high-end products arriving at their door from a knowledgeable driver. We must anticipate this new opportunity and take advantage of it,” he said.
Disrupting old stereotypes
Perhaps the most prominent issue currently hindering the industry is the age-old negative connotation associated with cannabis use. The industry needs highly educated, customer-service driven employees, but it can be difficult to recruit talented professionals when they’re concerned about the stigma of working for a marijuana business and how that might impact future employment opportunities. However, as the industry changes the dialogue surrounding cannabis, it can begin take control of how it is perceived on a broader societal scale. One way the industry can move forward is to stop calling dispensary employees “budtenders,” Andrle suggested.
“If we change the job title, we can create an industry mentality where people feel good about their work, providing them with a model for growth into management positions,” she said.
Cannabis is paving the way for an entirely new way of thinking. Ultimately, the fate of cannabis retailers comes down to whether or not they can stay ahead of the curve and anticipate the fast-paced developments taking place at all levels of the industry.
Gabrielle Wesseldyk is an account executive at The Rosen Group, a public relations agency with offices in New York City and Denver. Wesseldyk manages communications for leading cannabis brands, including cultivators and infused product manufacturers.