The Grass Is Always Greener…

marijuana-leaf-tweed

via your classmate Ryan:

While medical marijuana has been on the market for some time with a prescription, the Federal Government of Canada is currently in the process of legalizing the sale and recreational use of marijuana. Importantly, this legalization will be managed with regulations which specifically include how marijuana can (or cannot) be branded.

The Task Force on Cannabis Legalization and Regulation recommends plain packaging and prohibit any product deemed to be “appealing to children” (http://www.theglobeandmail.com/files/editorial/News/marijuana_explainer-1213/Marijuana.pdf). To note however, there are different camps with varying definitions of the phrase “Plain packaging”.

In one camp, “The federal task force recommended that plain marijuana packaging be allowed to include the company name, strain name, price, amounts of psychoactive ingredients and warnings.” (http://www.cbc.ca/news/canada/british-columbia/cannabis-industry-opposes-plain-packaging-advertising-ban-1.3982113)

Another camp believes, “Cannabis should be treated essentially the same as liquor, a sector where companies cannot show people using the product in commercials or target underage individuals.” (http://www.cbc.ca/news/canada/british-columbia/cannabis-industry-opposes-plain-packaging-advertising-ban-1.3982113)

Arguably, the latter would be a more appropriate treatment whereby there are restrictions on branding but branding none-the-less. Branding will give firms the opportunity to display and convey their value proposition and differentiation. It will also make the product look more legitimate than what is currently sold in the black-market. Legitimacy and access is what I think will drive current customers to purchase from newly authorized (legal) sources vs. illegal sources (one of the government’s goals). Marijuana has as many variations as alcohol (or versions of alcohol i.e. whiskey vs. scotch, etc.) so branding will be critical in informing the customer about the differences and characteristics of one brand or strain over another. Elements that could be included are grower, growing conditions, source, farm name, etc.. Similar to food, where customers are demanding to know more about where their food comes from, the same principles apply here.

If branding to this degree is allowed, it would be an interesting time for new brands to build an identity, image and personality. This would be the first time the product is available to the masses in Canada, so potential customers would need to be educated to entice trial. This would be followed by more education to explain why one brand has a better product than another brand. Brand Personality would need to be managed carefully due to federal regulation regarding the branding of marijuana. Recommendations from the task force seem to indicate that firms could not brand themselves as being part of having a luxury or fun life style the way alcohol brands do but also seems to be more liberal than cigarette branding. Accordingly, these new brands should focus of the uniqueness, rarity and production effort of their particular product over others. This would convey a premium product but would exclude any personality traits (i.e. fun, hip, older, younger).

http://www.theglobeandmail.com/news/politics/liberals-to-weed-out-positive-spin-to-marijuana-branding/article34694223/

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