Commentary

The Cannabis Industry's Insular Market Trap

In 2001, the song “Boom” dropped. This hard rock anthem was featured so frequently during football kickoffs that by 2012 it was simultaneously anointed one of the “10 Best Songs for the NFL Season” and one of the “Most Overplayed Songs in Sports.” Besides its hard-driving guitar and rap-inspired lyrics – punctuated by “here comes the BOOM!” – another notable thing about “Boom” is that it was recorded by P.O.D., a Christian rock band. P.O.D. frontman Sonny Sandoval says of the band’s success crossing over to a more mainstream audience, “…a Sonny gospel record doesn't put [P.O.D.] in front of thousands of unbelievers.” Sonny gets it.

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As the legal cannabis market matures, conversations are shifting from “legalization” and “advocacy” to “creating supply chain efficiencies.” People in charge of marketing are less likely to be known as “dude” than they are “CMO” or “MBA.”  Yet, despite this rapid evolution, marketing cannabis remains a very insular practice; the cannabis industry continues to market to itself, all but ignoring our own “unbelievers.”

Often referred to inside and outside the cannabis industry as the “stoner market,” there is a cohort of recreational cannabis consumers that comprises the customer acquisition low-hanging fruit. All those strains with funny names – Purple Monkey Balls, Tranquil Elephantizer or everyone’s favorite, Alaska Thunder F*** – appeal directly to this segment of cannabis consumers. 

This fanciful strain branding is understandable. These same naming conventions existed when cannabis was illegal and underground. Comedians of the 1970s joked about Acapulco Gold, Maui Wowie, and George Carlin’s Toledo Window Box. This branding style is simply the way it’s always been, and has strong appeal with the market’s core base.

Also consider that the market, as it stands today, has largely one product. Using the wine and spirits industry as an analog, what the cannabis industry offers consumers is Everclear — the 190-proof grain alcohol with the most alcohol by volume of any liquor made. Cannabis producers are flooding dispensaries with the highest-potency products they can. 

At a recent Southern California cannabis conference, I spoke with dozens of producers and growers, and their pitches typically began by stating their product’s percentage of THC (the psychoactive compound in cannabis that makes one high). Several vape cartridge companies bragged that their oils were 97% pure THC; the lowest was 70%. Though people enjoy and benefit from vape oils with far lower THC concentrations, high-potency products have strong appeal to the market’s core base: the “stoner” demographic.

Producers whose product strategies primarily cater to “stoners” should be cautious. All 50 states allow the sale of alcohol, but of the eight states where it’s currently or soon-to-be legal for adults to purchase recreational cannabis, five have outlawed Everclear. It’s reasonable to assume that state regulators will take notice of pot’s potency the same way they did for alcohol, making some degree of diversification a smart product strategy.

The time is right for the industry to direct marketing efforts beyond its core demographic. The prospective patients seeking relief from pain or chronic conditions, or the ladies who lunch who might try a puff from a vape pen in lieu of a glass of chardonnay, are not hearing the cannabis gospel. 

The industry’s most widely read marijuana lifestyle publication, High Times, boasts 236,000 subscribers. But with 3.28 million subscribers, women’s lifestyle magazine Women’s Day has more than 13 times the readership, and AARP The Magazine, the publication of the American Association of Retired Persons, has 100 times more readers than High Times. Certainly, some of these 23 million retired Americans might be interested in the medicinal properties of cannabis.

It’s not just consumer products that fall into this insular marketing trap. The cannabis horticultural sector, with products ranging from soil and nutrients to grow lights and HVAC, also embraces “the way we always did it” marketing. Step into a grower supply store and you’ll find shelves stocked with nutrients and fertilizers with names like Kushie Kush and Voodoo Juice, and featuring psychedelic labels that resemble rock concert posters from the 1960s. 

A growing majority of Americans favors cannabis legalization. But the groundswell still faces strong headwinds, particularly from the federal government. This industry still needs advocacy to further establish and protect legal markets. It’s easy for cannabis businesses to do their part to support this effort: simply adopt marketing strategies with stronger crossover appeal.

2 comments about "The Cannabis Industry's Insular Market Trap".
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  1. Eric Fischer from HJA Strategic Consulting, December 19, 2017 at 2:09 p.m.

    Please note from a marketing POV, it'll most likely by the cannabidiol component "CBD", not the "THC" component that will be active ingredient first attempted to be mass marketed.  CBD deals with the pain management, and it's what's marketed when we speak of "medicinal marijuana".  It's likely this marketing will more closely resemble current pharma advertising, with contraindications, rather than the way THC may be marketed as per the above.  Please note it's currently legal to market CBD oil derived from industrial hemp in all 50 states.  The webiste below is pretty good at outlining the rules of the road at this time.  Other websites show most states don't have any laws regarding the marketing of cannabis, and the states that do are very similar to hard liquor advertising, where no more than 29% of the audience can be less than 21 years of age.

    https://qcinfusion.com/the-legal-status-of-cbd-oil/

  2. John Sidline from The Cannabis Story Lab replied, December 19, 2017 at 2:21 p.m.

    Excellent point, Eric. There are myriad compounds in cannabis, with the two (currently) most sought after being CBD and THC. Though there are some online locations to purchase CBD (e.g., Amazon and Walmart), dispensaries still move a lot of this useful product. Some hemp-based CBD producers are branding along the same lines as the homeopathic and supplement sectors, but many others are stuck in this same insular trap - marketing all but exclusively to the true believers.

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