As new cannabis markets consistently open up across the United States, established marijuana businesses eye these novel populations with anticipation. That being said, the modern cannabis market landscape has a number of facets that generally fall into two categories: cannabis businesses and ancillary businesses.
To start with, cannabis businesses are those who deal directly with marijuana plants and plant-derived products: cultivation operations, dispensaries, edibles companies, and concentrate brands. Secondly, ancillary businesses cover all the elements of cannabis business that don’t deal directly with plant products: technology, equipment, nutrients, packaging, branding, marketing, consulting, and education. The delineation between cannabis companies and ancillaries is important to note as those who deal directly with the plant face different challenges when it comes to branding and sales on a national scale.
Ancillary businesses have the ability to sell their products and services across state lines without having to navigate individual State cannabis law. For example, a cannabis focused fertilizer company in the San Francisco, CA area can manufacture all of its products at one centralized location and subsequently ship its goods to vendors across the nation. This business format allows for consistency of product and brand image—which in turn leads to customer retention.
Actual cannabis brands, however, fall victim to a mish-mosh of state and county legislation concerning branding and sales. Because, it is illegal to transport marijuana products across State lines, even between States that both have medical and/or recreational programs.
Cannabis brands such as Colorado-based edibles companies incredibles and Wana are forced to partner with out-of-state cultivation, processing, and packaging companies in order to expand on a national level. The complexities of these nationally geared cannabis business plans cannot be overstated, as these businesses don’t have the convenience of uniform manufacturing and shipping from one centralized location. These large-scale branding and sales campaigns face serious challenges when it comes to consistency of product—a notion which is invaluable when it comes to customer retention in any retail business setting.
All cannabis brands, whether sold as flowers, edibles, or concentrates, begin with the cultivation of the cannabis plant—this is where the first problem with consistency on a national level arises. As companies like incredibles and Wana must partner with cultivators in out of State markets in places like Oregon and Nevada, the cultivation of cannabis plants lies within the responsibilities of these chosen business associates. However, as most experienced horticulturists understand, there are countless variables (lights, nutrients, environment, pests) related to cultivation which can affect the quality and taste of cannabis—these constraints all directly influence the consistency of flower and its subsequent products.
For nationally expanding edibles lines such as incredibles and Wana, the next challenge to be faced is that of processing. To illustrate, each of these companies has carefully created and regimented recipes for their popular edibles lines. However, because these products must be recreated in a state-by-state fashion, incredibles and Wana must duplicate their Colorado-based production down to the finest details. Again, this process poses serious challenges when it comes providing a consistent retail product in competitive marketplaces.
Packaging is another, though often overlooked, challenge in the expansion of national cannabis brands. As every legal State has different rules and regulations concerning required packaging and labeling for cannabis products, the problem must be addressed on an individualized basis. These packaging complexities include dosage information, child warnings, laboratory testing info, and state logos. That being said, companies like incredibles and Wana are forced to create their own customized packaging and labeling programs within each new market they enter.
Kent Gruetzmacher M.F.A. is a Colorado based freelance writer and the Director of Business Development at Mac & Fulton Talent Partners (www.mandfconsultants.com), a recruiting firm dedicated to the indoor gardening and cannabis space. He is interested in utilizing his M.A. in the Humanities to critically explore the many cultural and business facets of this youthful, emergent industry by way of his entrepreneurial projects.
