The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.
What makes a good brand?
It’s a question that every consumer products company asks themselves eventually. You’ve got to be unique without being obscure. Available to current customers, but also easy to find for new ones. Have a reputation for trustworthiness and reliability when it comes to things like quality, price, and distribution.
And when it comes to cannabis, you’ve got to do all of that while also contending with the fact that every state is its own market, with its own unique rules and characteristics.
That particular wrinkle can make branding an especially big challenge for cannabis companies. Some have opted to focus on a specific state or product category. Others, like SLANG Worldwide Inc. SLGWF have gone the other route, creating a diversified portfolio of six brands across different product segments. In late-July the company announced its expansion into Oklahoma, making it the 12th state in which SLANG brands are available.
Benzinga recently caught up with Chris Driessen, president & CEO of SLANG Worldwide, and John Moynan, COO, to talk about what makes a good cannabis brand and how they approach their branding strategy.
SLANG’s portfolio consists of everything from high-grade flower to vape pens and edibles. Have you observed that consumers are generally brand agnostic when it comes to certain products or markets, or if branding is more important in other areas?
Chris Driessen: I think, generally speaking, the more premium a product is, the more devout the follower. That said, when you're talking premium cannabis and value cannabis, you're not talking about hundreds of dollars in difference of price. District Edibles, for example, that's our value based on edible brand, versus Lunchbox Alchemy, which will be our premium medical brand, you're talking about a difference in wholesale of two or three dollars.
There are so many different cannabis brands and products out there. How important is word of mouth?
Chris Driessen: Look, we all came from a place where you used to get these products from your buddy, and it turns out your buddy or your dealer or whomever you were getting these from had flower and maybe had a couple of other things. But that was really about it. So that's all you were really exposed to, and not really so much from a branding standpoint, but just in availability because that's what the dude down the street had.
And then all of a sudden you get thrust into this new world where you're walking into a retail store and it is overwhelming. There are thousands upon thousands of products across the country and across the world that now have cannabis-infused into them, to do a whole host of things through a whole plethora of form factors, delivery methods, etc. And for most people, you walk in and you're just like, ‘Whoa!’
What most people do is they say, ‘I don't know budtender, what do you think?’ And that person generally takes you through a host of questions. Do you want to eat? How do you want to feel? How high do you want to get? All these different things, and they're trying to steer you towards a specific product.
Most people are more comfortable referring a product to you that either they've had a personal experience with or that they're informed about. The more information they have and the more people that come back...you're developing loyalty not only to that product, but to that particular store because of the service you receive. So it’s super common to see that in the infancy of markets.
What are the impediments to there being a big, mainstream national cannabis brand?
Chris Driessen: It starts with how widely distributed you are. You may have a great following in Denver and nobody knows your name outside of Colorado. It starts with the best ability which we call availability. It’s an old football adage, but it's true. If I can walk in and see your brand in multiple states, all of a sudden that starts to speak to that national brand standpoint. And I would challenge and tell you that there are a handful of those. And one of those being O.penVAPE, which has literally gotten billions and billions of branded servings out there into the world. It's available in hundreds, if not low thousands, of dispensaries, And so you're starting to see the foundations of that national brand building.
Now, the impediments to that are you've got to do this on a state-by-state basis. It's wildly different, depending on the cost, in Oregon versus Massachusetts. So there's some headwinds there, and that's primarily driven by regulation and just the fact that you can't make these all in one place. But I definitely believe that there are underpinnings of national brands that are emerging. And you just see that bear out over time.
John Moynan: I think that that's largely what defined our whole strategy. Eventually, the Federal laws drop and the other there's deconsolidation on a state by state level, but there's massive consolidation that happens on the national level. And then what really is valuable to anyone is those brands and that national distribution footprint. So there are a ton of folks that can go and replicate operationally what people do in an individual state. It's a much more difficult task to develop and deploy a cannabis brand on a national scale.
So if you're comparing the brand development within cannabis to any other industry, obviously it's not going to compare because of some of the issues at the federal level that we have to deal with as an industry. But, there are certainly brands that are managing to get a running start on developing that consumer loyalty on a national scale. And our whole strategy is based around the notion that success in that regard will be rewarded if and when federal legalization happens.
At the end of the day, what makes a “good” cannabis brand, and what separates a “good brand” from a “bad brand?”
Chris Driessen: For me, that's a few things. One, it's what kind of customer loyalty have you developed? Do people purchase your brand or your product again and again and again, and what's the continuity and the longevity of that brand? Secondly, do people pay a premium regardless of what segment you're in for your product? It may be a value product that's at a lower price point, but relative to your peers, are people paying a premium for yours or not?
John Moynan: The thing that I think makes a brand unique in cannabis, especially at a national level, is consistency of experience. Whatever that experience may be—whether it's District Edibles—if you know that, ‘Hey, if I buy this when I'm on vacation in Las Vegas, or I'm in Vail and I buy this, or I'm on the beach in California and I buy it, it's the same experience regardless of where I'm at’—not a lot of people are able to say that about their brand in cannabis.
It's obviously something that goes without saying for any other industry. If you buy a Shinola watch it doesn't matter where you buy it. It's going to be the same watch. But something that really differentiates successful cannabis brands from those that are not successful, in my opinion, is the consistency of the consumer experience, regardless of where it's happening.
The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.
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