Your Cannabis Brand's Survival Depends On A Proper Supply Chain
By Ori Bytton.
Cannabis companies are racing to brand themselves. Unfortunately, many are neglecting the need to ensure consistency of their product, which undermines their reputation. If a company doesn’t have a consistent product, it doesn’t have a brand. The key to this live-or-die consistency, building and maintaining a proper supply chain is becoming crucial.
As consumers, we have a general sense of what we are getting when we purchase everyday food and beverage brands. We know that when we buy a Coca Cola (NYSE:KO), we are getting a product that’s always fizzy and has that distinct raisin-y flavor; when we buy Oreo cookies, the cream filling is sweet with a hint of vanilla and there’s enough to cover the whole cookie. If these products stopped providing a consistent experience, we would have fewer incentives to be loyal to these brands.
Here’s a simple and common example of how lack of consistency can undermine a cannabis company’s brand: a customer buys a pre-roll in March and loves it. He then buys the same exact pre-roll, from the same company, in August, and it has an entirely different taste and effect. The customer hates it or is simply confused. This customer is now more likely to try a pre-roll from a different company than take another chance on the same inconsistent one.
The result? The company has lost the chance to establish itself as the go-to-brand for pre-rolls for this individual. If it becomes a trend, and more customers grumble about it on social media and among their friends, the company will certainly lose market share.
This is not a minor or rare phenomenon. There are consistency challenges across the board in the legal cannabis industry. Many companies are attempting to vertically integrate every part of the seed-to-sale process – essentially, becoming a one-stop-cannabis-shop – but most don’t have the proper infrastructure. Without the infrastructure to support their efforts, they are stretching themselves too thin and impacting the consistency of quality and supply.
The vast majority of companies that aren’t vertically integrated are using different growers, manufacturers and packagers at each step of the process…which obviously invites inevitable issues with consistency. This is especially the case with multi-state operators (MSOs) that have a hard time ensuring consistency of their brand nationally. Since cannabis isn’t legal at the federal level and therefore can’t be moved across state lines, MSOs must grow different strains of cannabis in different locations, leading to product inconsistency. For instance, Massachusetts cannabis, which can only be grown indoors, isn’t the same as California cannabis, which can be grown both indoors and outdoors.
How can a single company sell in both places, under the same brand, knowing that the customer is essentially getting a different product? With the growth of the legal cannabis industry, there needs to be a greater push for consistency if companies want to brand themselves in the same way as mainstream consumer industries.
The best way is to establish a strong supply chain to ensure consistency across the board. A streamlined supply chain fully automates the process of cannabis production and controls the environment in which different strains are grown, packaged and manufactured. Much like how pharmaceutical companies tightly control each stage of production, cannabis companies also can (and should) control their supply chain – the growing, cultivation, extraction, manufacturing, packaging and distribution of their products – so that consumers know exactly what they are getting with their brand.
Finding a trusted supply chain management partner will offer scalability, stability, and consistency for a business. A strong supply chain partner can:
- Help a cannabis company scale without having to invest in the logistical side of the business. This frees up resources to invest in machinery and technology, so that the company doesn’t have to move operations as it grows.
- Provide quality control with a defined standard operating procedure.
- Give companies access to human capital and professional networks. An experienced partner comes with vetted employees and important connections, as well as crucial experience and subject matter expertise.
- Ensure a company is always up-to-date with ever-changing regulations and quality standards. This is especially important looking toward the future when EU Good Manufacturing Standards (GMP) and U.S. FDA approval will likely be part of the picture.
The final regulatory benefit is actually quite significant. Cannabis products currently aren’t inspected by any governing quality control agency. This will quickly change once cannabis is legalized federally in the EU and US and subject to GMP/FDA/USDA review like all other consumer and pharmaceutical products on the market. Working with supply chains that are already aware of GMP/FDA standards will help companies stay ahead of the curve. It is substantially easier and cheaper in the long run to invest in quality infrastructure from the beginning rather than having to retrofit manufacturing guidelines down the line. We saw this play out in California when almost half of brands on the market were forced off the shelf when state regulations were implemented.
Here’s your key takeaway: Regardless of whether you’re manufacturing food or cannabis, your brand promise to the consumer is that he or she will receive the exact same product again and again. As cannabis companies strive to brand themselves during the pre-legalization rush, ensuring the consistency of their products across their supply chain needs to be a top priority. Partnering with a supply chain management company can position cannabis companies well to be able to deliver on their brand promises.
Ori Bytton is the CEO and Founder of Natura Life + Science.
Image courtesy of Natura Life + Science.
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