Regulations have made creative cannabis branding and marketing difficult, but the story is different for accessories.
Health Canada has thrown roadblocks in the way of cannabis branding and marketing, but unique opportunities still exist in the cannabis accessories market.
When it comes to branding, the cannabis industry is showing that it is as diverse as the plant itself. Decades of prohibition have built up a decidedly counter-culture mystique around the plant, and while plenty of brands in the legal era continue to embrace that, others have built brands around the medical and wellness market as part of a healthy lifestyle while others still have gone with a clean, modern branding approach. It would seem that the possibilities should be endless, were it not for the vast restrictions placed on producers and other cannabis companies by the country’s regulatory body.
Health Canada has made unique and eye-catching cannabis branding into a nearly impossible proposition, taking away the powerful sway of lifestyle appeal that seems to resonate so well with most consumers. This presents an opportunity, not for cannabis producers and retailers, but for cannabis accessory makers and distributors to scratch that lifestyle itch that won’t be fulfilled by plain-packaged cannabis bud or oils.
Restrictions and opportunities for cannabis branding and marketing
After over a year of consultation, the Canadian federal government announced its plans for cannabis branding restrictions in July of 2018. Most expected the regulations to be stringent, but few anticipated how far they would actually go. Understandably, Health Canada requires that any cannabis packaging and labels of promotional material be devoid of any elements that could reasonably be perceived as appealing to children. On top of that, they have disallowed any celebrity endorsements or testimonials, and packaging cannot include depictions of people, characters or animals. Lastly, cannabis companies are prohibited from including branding that evokes any kind of emotion, positive or negative, associated with cannabis, including a sense of vitality, glamour, recreation, excitement, etc. Health Canada’s packaging guidelines restrict cannabis packaging to a single uniform color with only standard fonts and no graphics outside of a logo.
For actual cannabis producers looking to deploy a branding and marketing strategy, these rules leave few options, especially when you consider these same limitations are also placed on accessories that are sold within a cannabis retail space, including pipes, grinders, rollers, vaporizers and more. Outside of those spaces, however, accessories manufacturers, distributors and retailers are given significantly more leeway with their branding and packaging elements. Accessories companies have a fairly blank canvas to work with in terms of packaging design, colors and the visual design of the product itself, giving them a world of possibility to design unique, eye catching and appealing products that catch the consumer’s eye and imagination.
Cannabis accessory companies also have options when it comes to the use of celebrity and character likenesses as part of their branding strategy. While accessories sold in cannabis retail locations must still observe the same rules regarding celebrity endorsements, accessories manufacturers are free to sell licensed products online or at head shops as long as those shops do not sell actual cannabis product. With global e-commerce sales increasing dramatically across just about every retail sector and the inherent appeal of endorsed products, this represents a significant opportunity.
Licensing is a powerful tool in the consumer retail space as seen by the sheer amount of merchandise from every blockbuster superhero movie or world-famous artists. Licensed branding has the potential to be equally effective in the cannabis industry, where recognizable names like Snoop Dogg and Cheech and Chong are valuable brands. Since Health Canada has banned the use of celebrity and character branding for cannabis products, Canadian Cheech and Chong fans won’t be able to express their fandom through Cheech’s branded cannabis line but can do so by picking up a Cheech and Chong pipe or vaporizer.
Brands filling the void
Of the major Canadian cannabis accessory companies, High Tide (CSE:HITI) may be one to take significant advantages on the relative branding freedom granted to accessory companies. High Tide has partnered with a wide range of recognizable brands and celebrities including The Trailer Park Boys, Snoop Dogg, Guns N’ Roses, Cheech and Chong’s Up in Smoke, Sublime and more to create branded cannabis accessories sold exclusively through the company’s Famous Brandz online storefront. The company is also establishing a Canada-wide retail network of Canna Cabana stores, with plans to eventually open over a hundred stores that sell the company’s non-licensed accessories alongside cannabis products.
It’s human nature for consumers to gravitate towards unique and eye-catching offerings, and right now in Canada it’s accessories manufacturers and retailers who hold the best tools for catching the consumer’s eyes. The cannabis accessories market is full of opportunity for unique branding that will set products apart, and the accessory companies that best take advantage will benefit greatly in the era of legal cannabis.
This article was written according to INN editorial standards to educate investors.