How Cannabis MSOs Are Winning Over Customers In Evolving US Markets
One of the unique challenges that U.S. cannabis multistate operators have faced in expanding their businesses and winning over customers is the constantly evolving nature of U.S. medicinal and recreational markets.
At the Benzinga Cannabis Capital Conference in Miami Beach on Monday, execs from top MSOs discussed how they are approaching different U.S. markets and target customers.
Cresco Labs Inc's (OTC:CRLBF) long-term goal is to make consumers as aware of its brands as they are of brands like Coca-Cola Co (NYSE:KO) or Starbucks Corporation (NASDAQ:SBUX), said Cory Rothschild, Cresco's senior vice president of brand marketing.
“Part of what makes those [brands] so powerful and absolute clear mental images is that they’re actually available so many different places and are the types of brands that we can all go to and trust,” Rothschild said.
For Cresco, one goal is to be as consistent about the quality and packaging of its products as possible nationwide so that consumers will know exactly what they are getting when they buy, he said.
Beth Stavola, CSO of iAnthus Capital Holdings Inc (OTC:ITHUF), said her company identified a major unaddressed market for cannabis.
“We started picking up data and capturing data, and data was something the industry just did not have. What I ended up figuring out was our customer base was literally 50% women and 50% men, and there were no products geared toward women,” Stavola said.
She said iAnthus saw marketing to women as a significant opportunity, and the company has capitalized by creating products and packaging more geared toward women.
James Whitcomb, chief development officer at Parallel, also mentioned women as a key customer demographic.
“Our target demo at Parallel has always been the woman between 21 and probably 65 who is the core decision-maker in the family,” he said.
Tickets to the next Benzinga Cannabis Capital Conference in Detroit, Michigan April 1 are available now.
The Shift From Medicinal To Recreational
While building brands is certainly important in the long-term, Whitcomb said most markets in the U.S. are still constrained by supply. In Florida, for example, the key at this point is simply keeping high-quality flower in stock.
The same is true of states like Pennsylvania and Maryland, said Holistic Industries CEO Josh Genderson.
“Just having product means you’re going to sell it,” he said.
Genderson said he anticipates states that have had legal medicinal cannabis for several years will continue to legalize recreational use as well.
“Some of these East Coast states that have had medical for a few years see the boogie man hasn’t come and they see the tax benefits.”
Unique Cannabis Markets
Certain U.S. cannabis markets present unique challenges for MSOs.
“I don’t necessarily want to own a license in Oregon or Washington or some of the states that are unlimited licensing,” Stavola said.
Cresco's Rothschild said California is also unique because it is one of the only states that is not constrained by supply.
“The extent to which anyone can succeed in California it becomes a bit of a playbook as to what’s to come in a lot of other states,” Rothschild said.
Photo courtesy of Cresco Labs.
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