At my company, we explore and reveal the best marijuana business models and broker the sale of cannabis businesses. I speak with a lot of people along the entire supply chain and I would like to reveal some of what Iâ€™ve learned.
In this series, I will share the strategies that Iâ€™ve picked up from some of the fastest-growing cannabis and CBD brands for launching and growing a CBD brand.
Hereâ€™s the lay of the business landscape and what Iâ€™ve found to be the best business and marketing opportunities in the cannabis space right now.
Who This Is For:Â
1. Current dispensary owners and marketers looking to expand their businesses.
2. Turn-key franchise buyers who donâ€™t have experience in the industry.
3. Startup mavericks and marketers looking to shake things up with their unique spin.
Licensing Agreements: Interstate Commerce Loophole
While interstate commerce in cannabis is not legal,Â licensing agreements may be one of the best ways to do business across state lines.Â Hereâ€™s how it works: You can facilitate a licensing agreement where brand A grants brand B the right to produce and sell Aâ€™s products in Bâ€™s state.
Letâ€™s say your business is a publicly traded, multistate operator. Like many state license holders, youâ€™re looking for opportunities to expand into other states. To do this, you need partners in production, cultivation and retail across state lines.
Hereâ€™s a real world example:Â BaM Marijuana is a publicly traded, multistate operator in four U.S. states. Like many state license holders, it is looking for opportunities to expand into other states. To do so, BaM in Nevada partnered with G Pen in California. G Pen essentially crossed state lines from California into Nevada using this tactic.
The two companies entered into a licensing agreement, and BAM now produces and sells state-compliant cannabis products that are rebranded with G Penâ€™s brand and distributes them in the state that BAM operates legally in (Nevada). Essentially, G Pen has crossed state lines. This is a great growth strategy.
My advice? Create an interstate commerce network.Â Look for opportunities to expand across state lines by facilitating relationships in several states.
Brand Hack: Branding Via Archetypes
You basically cannot advertise cannabis or cannabis-derived products (CBD) through most traditional channels offline or online. However, branding might be the most important aspect in cannabis since you need organic word to travel so much further than you do when you can use advertising. So, new cannabis marketing companies are specializing.
Cannabis branding services such as Ladyjane show that you can attract your core audience by aligning with an archetype (explorer, stoner, athlete, etc.). Essentially, develop your core messaging to narrow down your audience so that you stay on brand through every fiber of your organization.
Maybe youâ€™re aiming for a feminine-sensual archetypal persona for a line of CBD-infused beauty products, or you relate more to the outdoor adventurer who wants to connect with Mother Earth, or youâ€™re looking to attract a mature audience that trusts medical cannabis. You donâ€™t want to cross the lines by trying to appeal to all of them with your imagery, in-store experience, employee hires, etc. Thatâ€™s a quick way to appeal to none of them.
Your customer experience, employee hires, packaging and overall customer experience need to stay congruent or youâ€™ll lose your core audience at some point in the customer journey. You want a specific type of person to â€śget youâ€ť and trust it in their core. So, itâ€™s important to define your target audience â€” and then stick to it.
Consumer Trust: Brand Ambassadors
Since advertising is difficult, a platform to reach an audience is difficult to find. One strategy is to find the leaders of your archetypal segment of people and recruit them as brand ambassadors to spread the word and build consumer trust.
A real-world application of this can be seen with Medterra CBD, one of the most respected brands in the CBD industry. Athletes carried its brand credibly into the eyes of their followers.Â The brand calls them the Medterra Athletes and provides them with free CBD products.
To find and appeal to brand ambassadors, you need a clear differentiator and a quality product. Donâ€™t try this with a product straight off the generic shelf â€” ambassadors are looking to endorse unique, authentic products. To continue the example of Medterra, it was among the first to offer CBD oil with a guaranteed 0% THC to avoid failing drug tests (since CBD can legally include 0.3% THC, pro athletes werenâ€™t risking it). No other brand was doing that at the time. This â€śadvertisingâ€ť was not traditional, and thatâ€™s why it punched through the noise. Always work to convey trust and authority.
People donâ€™t realize how easy it is to reach brand ambassadors these days. You donâ€™t need to engage an influencer with hundreds of thousands of followers on Instagram. In fact, studies have shown that â€śmicro-influencersâ€ť with less than 100,000 followers see greater engagement. You can find them pretty easily online: Craft a strong offering, and message them to speak with them about your opportunity. Expect to give them a free sample to help with their decision and pay them to use their testimonial as an endorsement of your product.
If you have a cannabis brand that you are looking to grow, consider pursuing licensing agreements and brand ambassador partnerships to continue to reach your defined archetype.Â The legitimacy created by this strategy can be priceless.