In 2012, Colorado’s electorate made a bold decision. They voted to make cannabis legal for recreational use. The U.S. cannabis industry has seen exponential growth since then with sales increasing by 67% in 2020, leading it to become a $30 billion industry in 2022. Cannabis companies trying to get in on these profits have run into challenges when creating a highly recognizable brand that stands out on the shelves and also connects with consumers to build brand loyalty. Due to marketing restrictions in the cannabis industry, there are notably more obstacles marketing cannabis compared to any other industry. From diverse consumer demographics to heavy governmental restrictions on everything from packaging to advertising (i.e. branding that may appeal to children), you just can’t seem to win. Building a strong brand is never an easy task, so we have compiled some simple do’s and don’ts to help you build your cannabis brand.

Do:

1. DO understand the industry’s legal landscape
   • No matter how perfect your marketing plan may be, it won’t go far if you don’t understand the legal restrictions of the cannabis industry. It is crucial to have a complete understanding of state and local restrictions, social media restrictions, text message marketing laws and regulations.
2. DO know your brand position in the market
   • Knowing your brand position means you are fully aware of what you are marketing to consumers. To be able to successfully market your brand to consumers, you must separate yourself from other cannabis brands first. You may want to ask yourself:
     1. Why and how is your product unique from others?
     2. Is there anything in your product that only you can provide to your customers?
     3. Does your product solve a problem for your consumers or help them to reach their desired effect?
3. DO know your customer
   • Understanding your target audience’s demands, interests, shopping behavior and aesthetics, will help tailor your brand design and messaging for maximum effectiveness. Thinking about your ideal consumers interests, music taste, where he or she shops, or what drives their purchase decisions, can give you a great foundation to start building your brand.
4. DO be unique and easy to remember
   • If your branding looks too similar to others on the market, it will be really hard to distinguish yourself as a recognizable brand. It is important that your messaging connects to your brand name, design and products.
5. DO be creative
   • Take the time to create a unique brand design that people will remember. Keep it clean, simple, and use images or colors that reflect your brand’s messaging and values.

Don’t:

1. DON’T make misleading claims about your products
   • When making claims, always make sure they can be backed up and verified. It is essential to stay up to date on FDA and state You must be thoughtful about the language that you use on product labels, social media posts or other promotional copy, because if your claims are not FDA or state approved, then you are putting your business at risk.
2. DON’T forget to educate your consumer
   • Sharing your professional knowledge of cannabis with consumers will not only help spread awareness about cannabis but will also help establish you as an expert in your field. Educating consumers can also aid in reducing any stigma that still surrounds the cannabis industry.
3. DON’T shy away from a loyalty program
   • Studies have shown that gaining a new customer is actually 5 to 25 times more expensive than retaining an existing one. Without a loyalty program, customers have less of an incentive to come back. Even improving your retention rate by as little as 5% has the potential to boost profits up to 95%
4. DON’T market to too many customer segments
   • If your company tries to appeal to every customer segment, your brand won’t have a distinct voice or personality. It will lead to your brand becoming too general, which is not appealing to any customer segment. Try creating a brand that caters to a specific niche to allow your target consumer to really connect with your brand.
5. DON’T forget about social issues and responsibility
   • In recent years, consumers are more concerned about the social impact that the businesses they support have on society. In the cannabis industry, many companies tend to raise awareness about social equity, diversity and inclusion as well as community-oriented programs.

Knowing the basic do’s and don’ts when creating your cannabis brand can help you avoid legal complications down the road while establishing your voice in the cannabis industry. If you are in the cannabis industry and need some expertise in developing your brand, please schedule a free consultation with Oster and Associates.