When marijuana is legalized in Canada this summer, the government plans to sell it in plain packaging that is a single, uniform colour and does not include any graphics or images.
But a recent CIBC report said that despite the lack of flashy packaging, brand loyalty will be an important determinant for consumers, just like it is for alcohol.
“We find the matter of branding to be the biggest question mark of the entire cannabis legalization process,” CIBC said in the report.
Health Canada has proposed marijuana be sold in plain packaging with strict branding limits in order not to glamorize the drug and to deter children from smoking pot.
“(The package) cannot be embossed, shiny or metallic,” Health Canada said. “The use of branding and logos will be restricted.”
However, the Cannabis Act is still making its way through Parliament, so none of the proposals are final.
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Large growers say branding is necessary to convince consumers to switch to the legal market.
Mark Zekulin, president of Canada’s largest licensed producer, Canopy Growth, said branding breeds accountability. If consumers are going to be more likely to remember their experience, companies will put more effort into ensuring it’s a good one.
“If everybody’s in the same white packaging, maybe they’ll remember what they bought, maybe they won’t,” he said.
In an article in The Conversation, Michael J. Armstrong, an associate professor of operations research at Brock University, said “branding helps inform consumers,” by using distinctive logos and packaging.
“With cannabis, recognizable brands could help consumers find the best product for their needs. Different customers may want a mild buzz, a powerful high or more medicinal benefits,” he wrote.
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The CIBC report compared a consumer’s loyalty to a marijuana brand to that of alcohol or cigarettes.
For example, wine drinkers likely have a favourite brand. But the key for many consumers is to find any cabernet sauvignon rather than their favourite cab brand, CIBC stated.
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However, unlike legal marijuana, beer and wine allow for graphics and descriptions of the products on the label, making it easier for a consumer to differentiate the product.
The report acknowledges that the ability to market to consumers depends on labelling and packaging, and on this front, cannabis producers will not have much leeway because of strict regulation.
“While differentiation will be more difficult than in the alcohol world, we still believe that a meaningful segment of consumers will have favourite brands [for legal marijuana] and that winners will not solely be determined by who has the lowest-cost production or lowest pricing,” the report stated.
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Currently, some strains of weed have “silly names” associated with them, like Girl Scout Cookies or God Kush, which the report says will help consumers remember which type of weed they liked.
“Naming strains after Canadian landmarks (Rideau, Champlain, etc.) may win points with some users, but for most, they want a strain they recognize and can research,” it stated. “Product quality — and relevant brands — will be especially critical once consumable products are legalized.”
Some pot producers have already tried to skirt around the branding regulations using some creative techniques.
For example, Royal Canadian Cannabis, a pre-license marijuana producer based in Alberta, is looking to add some pop to the standardized packaging marijuana products by using augmented reality technology.
To the naked eye, its packages could have only a logo and a standard warning. But when viewed through the lens of a smartphone, a customer may be able to click on different elements of the package and access brand information, such as a video, “to sort of circumvent or navigate these regulations in a creative way,” co-founder Jonathan Kowal said.
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