Budding industry needs branding for consumers’ sake
Users must know what cannabis products stand for, writes
Ontario introduced a bill last week governing sales of recreational cannabis. Meanwhile, the House of Commons is proceeding with its legalization legislation. As both governments finalize the details, they must ensure they allow cannabis producers to effectively brand their products.
Customers can easily evaluate many products before purchase. Before buying shirts, I can see colour, feel texture and test fit. In product-design terms, those are “search” features. I judge their quality while searching for shirts to buy.
By contrast, cannabis primarily has “experience” features. These include its high and side effects. Consumers evaluate them only through use.
Cannabis also has “credence” features consumers can’t evaluate at all. Some are desirable, such as tetrahydrocannabinol (THC) and cannabidiol (CBD) content. Others are hazardous, such as pesticide contamination. For those, buyers rely on sellers’ claims.
To prevent those unseen factors from harming consumers, government regulation is appropriate. This includes standards for allowable pesticides, and rules about testing frequency.
In the quality field, such regulations are part of “conformance quality.” They enforce key product minimums and maximums.
But quality isn’t just about avoiding the bad; it also involves creating the good. This is part of “design quality”: making products great.
For cannabis, design quality has many dimensions. What are the best THC and CBD levels? What is a high-quality high? Should it be smoked or eaten? How do these preferences vary among consumers?
This complexity, along with cannabis’s credence and experience features, make its product branding important. Branding via logos, packaging and advertising helps producers inform consumers and establish trust.
Consider Apple, Coca-Cola and Google. Their reputations let consumers know what to expect from their products.
With cannabis, recognizable brands could help consumers find the best product for their needs. Some may want a mild buzz, while others seek a powerful high.
Branding also helps build trust. Consumers learn which brands consistently meet their needs.
That’s one advantage legal cannabis could have over illegal. Consumers won’t need to risk unpredictable results buying on the street. They could instead depend on consistent effects from known brands.
Branding will become even more important with edible products. These combine features of cannabis and food. For example, Constellation Brands’ recent Canopy Growth investment may lead to cannabisinfused beverages.
Conversely, without branding, producers have little incentive to pursue excellence. As generics, they’d logically aim to minimize costs and quality.
Unfortunately, the proposed Canadian and Ontario laws only partly support branding. Much may depend on the final wording and its interpretation.
For example, the federal bill allows “informational” packaging and promotion. But it forbids evoking emotions, or lifestyle associations with “glamour, recreation, excitement.”
Indeed, these products shouldn’t look glamorous. But good ads often evoke emotions. Lifestyle images can explain complex products simply. And isn’t this law about “recreational” use?
The law also forbids product giveaways. Sure, we don’t want free joints handed out in the street. But samples let consumers compare competing experiential products. Why not cannabis?
(Meanwhile, tobacco producers are annoyed cannabis has any branding privileges. Theirs have been steadily removed. Pending legislation may lead to generic packaging.)
In Ontario’s proposal, the devil again is in the unclear details. The Ontario Cannabis Retail Corp. apparently will sell products “behind-the-counter ... similar to how tobacco is now sold.”
How similar? Behind-thecounter retailing makes product labels hard to read. If it also hides package images from view, then consumers will lose even more information.
Cannabis legalization isn’t simple. Governments must balance many priorities to find the “least bad” approach. But it’s important to allow cannabis firms enough flexibility to provide consumers with quality products.