Brand Development in the Volatile Cannabis and CBD Space

By Charles Trowbridge

If you haven’t been living under a rock somewhere, chances are you’ve read the countless articles about the booming cannabis market. And that’s true, but what you may not be aware of is that fact that the last six months have been volatile to both the cannabis and CBD industries (the aren’t the same but more on that later in my column). In fact, the market has swung from bullish to bearish nearly overnight. 

Here’s what else is happening in the industry: 

  • While companies are downsizing workforces, and big names face C-suite pressure, the industry finds itself at a crossroads. On one side, the argument stands that mass legalization is the only path forward. On the other, activists argue for measured legalization, starting with financial reform and a stronger checks and balances system for quality control.
  • The vaping fiasco threatened to overturn years of due diligence with a swell of misinformation and misunderstanding. Investors who, months earlier, couldn’t wait to throw money at start-ups, came looking for payouts and brought an increased skepticism for the viability of the markets.
  • For many brands, confusion lies somewhere in the middle. Companies that were not early to market and do not have long-term brand equity, measured legalization means more control over business growth and access to more resources to ensure production, marketing and distribution. Despite the limitation on resources, smaller brands should be thinking about ways to make the greatest impact with a bootstrap mindset.  Bad actors have large ripple effects.  

What CBD & Cannabis Companies Should Be Thinking About to Avoid the Rollercoaster

Beneath the churn in 2019, the CBD market continues to explode with consumers and the cannabis industry continues to produce measured content and compliant products. 

As we’ve mentioned in another blog, the industry is currently suffering from the effects of an echo chamber. That is, most branding and marketing speaks directly to the already-existing market, rather than thinking about expanding into new demographics. As legalization and regulations continue to shift, brands should be taking a bit of a longer view on the things that will make them successful.  

  • Almost daily, we stumble across companies that have gone all-in on the same variants of messaging: ‘canna,’ ‘green,’ ‘bud,’ etc. While there is nothing inherently wrong about that, some of the smarter companies we’ve seen have focused more on the industries they’d like to disrupt, rather than trying to cram under the same ‘cannabis’ umbrella with everyone else. Companies should be thinking very specifically about the kinds of customers and message they want to develop – just like any other mature industry.
  • Is your product designed for the on-the-go lifestyle? Then think about the kinds of people who would buy discreet, cleanly branded products, where they would most likely be looking for advertising, and the kind of message you’d want them to pass along in a word-of-mouth scenario. 
  • Got a product that you’ve envisioned more for the stay-at-home customer? Think about what they care most about – things like accurate descriptions of effects, dosages, and quality ingredients, and then think about where they’d be most likely to come across your brand. The food and beverage industry is a great place to start.

There is nothing easy about building a brand from scratch. Building a brand in the cannabis and CBD industry is even tougher. However, despite the current volatile conditions of the industry as a whole, there are things brands can be doing to cement footholds in their individual markets, and they should be taking a page out of the books of existing industries. After the dust settles, cannabis and CBD products will fall under the broader category umbrellas, just like every other product on the market. 

One of the most important takeaways of the 2019 roller coaster was that compliance and responsibility are paramount for the success of the industry.