As Canada Enters Cannabis 2.0: A New Chance for Brands to Stand Out

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When you go to the grocery store, do you pick your tomatoes based on the greenhouse they came from? Or do you just pick the ones that look the best and go about your day?

For cannabis consumers during the first year of legalization in Canada, choosing from a vast array of dried bud was not that different. The first wave of legal cannabis products included dried flower, pre-rolled joints and simple cannabis oils and capsules. Canadian licensed producers were hard-pressed to stand out in a crowd of products that all looked quite similar. It was exceptionally difficult to build brands based on product differentiation when everything, more or less, just looked green and leafy to the consumer.

Cannabis 2.0 has changed all of that. And for marketers, this change couldn’t come soon enough. With the introduction of extracts to the consumer market in early 2020, Cannabis 2.0 opened up the ability for licensed producers to do what food manufacturers have been doing for ages: create uniquely formulated products in order to differentiate themselves, despite using the same common ingredients as everybody else. Essentially, Cannabis 1.0 was akin to a world where you had 50 brands selling all-purpose flour; Cannabis 2.0 enables brands to finally bake bread, pastries, pies, cakes, bagels — you get the message. Instead of flour, salt, sugar and butter, the basic 2.0 ingredients are terpenes and cannabinoids, but the idea remains the same: This is our chance to make something unique and build strong brands with novel, differentiated products.

Capturing the consumer’s attention

While it’s not impossible to differentiate Cannabis 1.0 products, their similarities make it harder for producers to build brand loyalty and remain competitive outside of pricing. The average cannabis consumer may have some preference between indica or sativa, or they might even have particular strains they gravitate toward. However, it is highly unlikely that they’re looking for products from a specific producer.

This is part of the reason why dried flower and pre-roll prices have been on a steady decline in both Canada and the United States. When you can’t cultivate brand loyalty through differentiation, you are at the mercy of the market.

Cannabis 2.0 has offered a bit of an antidote for producers. By creating uniquely formulated products, they can, in turn, create unique brands built on a solid foundation of differentiation. This is what creates value. Consumers can easily identify a particular brand of edible, for example, and producers can ensure consistency in that edible, batch after batch. This establishes loyalty. Consumers know what to expect, and producers know how to deliver it consistently.

Part of that is the greater control afforded to extracts. It’s far easier for a producer to regulate the concentrations and ratios of various cannabinoids and terpenes in subsequent batches of extracts than it is to ensure consistency of agricultural cannabis. But it’s also the creativity afforded to extracts that allows producers to offer new and different experiences to consumers. People are willing to pay a premium for these nuanced, consistently delivered experiences. And that allows marketers to develop brands in a regulatory environment that hasn’t exactly been favorable to brand-building.

Dare to be different

If you’re making a product that looks, smells, tastes and otherwise behaves just like every other product on the shelves, it may be time to rethink your strategy. The biggest advantage of Cannabis 2.0 and the wide variety of extract products is the ability to make something that gives each brand a real chance to stand out.

So, how do you arrange your supply chain and corporate activities to create differentiated products? It goes without saying that every stage of the process must be thoughtful and measured. Begin by choosing a specific portion of the market, like high-end concentrates. A focused approach and goal of making quality concentrates dictates your process. For example, at Thrive, we created a purpose-built, outdoor cannabis farm to provide sun-grown cannabis with solid terpene profiles and high yields per plant. Maintaining the quality of that inventory post-harvest, whether through investments in refrigerated storage to house fresh-frozen plant matter or other means, is crucial in the process.

Extraction is another key element in differentiating a brand. In the concentrates sector, selecting an extraction process that is built to process huge amounts of biomass in service of isolating one or two cannabinoids is quite different than selecting an extraction process that allows the producer to capture all the various cannabinoids as well as retain native terpenes, allowing for the production of whole-plant extracts. The latter, which Thrive has invested in, creates an extract with a more robust aroma, flavor and effect and can help a concentrate stand out in the market. This is fostered by focusing on the extraction process and ensuring that it maps to your product goals.

It is critical to align all corporate activities around a single, laser-focused goal — making a differentiated product set. Your path will be unique, but the big picture will be very much the same. Find where you can stand out, figure out how you can get there, then align everything in your power to make it happen.

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