Cannabis “value brands” should carry a heart-attack warning

December 17, 2020

Be careful launching price-fighter brands because you can.

The fast launching of so many value brands in cannabis has single-handedly created the value market. But it’s best to target your Cannabis brand to the consumer, not target a perceived value segment.

Think instead how to promote your existing brand’s benefits to the consumer’s needs. Benefits like relief, stress & anxiety reduction, comfort—even in a recession, people still go for quality medicine. Strike a balance between product quality & lower price on your core brand P+L. Or drive out costs & pass savings on to consumers in price.

Although consumers don’t always trade down, others will, reflexively, launch their own value brands. That leads to a pricing “race to the bottom.” Crashes your profitability. Also, value-brand flankers tend to cannabalize your core, profitable, branded business. New brands absorb precious resources across the whole business. It’s hard not to get lost in creating, low-margin ‘cheap’ brands & line extensions.

So ‘Zig,’ when everyone else is ‘Zagging.’ Keep the focus on building strong & lasting brands. Figure out how to delight your consumers with your existing brand, and folks may well continue to buy you, even in a 1-in-a-100 year pandemic.