Photo by @ElsaOlofsson
Promoting the use of cannabis is strictly prohibited in Canada, so regulators encourage licensed producers to focus on robust brand strategy rather than product marketing. This puts pressure on new companies or those selling niche products.
Thankfully, the rising popularity of Cannabis 2.0 shows that most consumers have yet to align their loyalty to brands, and are eager to try innovative formulations. Overall retail trends don't necessarily reflect this, however, since distribution regulations complicate the relationship between cannabis brands and consumers.
In British Columbia, some 76% of consumers buying from the legal market get their cannabis at private retailers, but all sales originate from a single wholesaler, the Liquor Distribution Branch (LDB). Producers need to pay close attention to the LDB for the major role they play in marketing cannabis products.
BC's unique cannabis market
Prior to legalization, the LDB announced its commitment to displacing the illicit market. Their strategy largely focused on sourcing a wide variety of high-quality products from as many licensed producers as possible.
This approach was meant to support retailers in customizing their assortment, but the LDB itself reports little trend variation between stores. The retail market clearly favours certain brands and products, and advocates are pushing for change.
The BC Craft Farmers Co-op (BCCFC) has criticized the BC government for shutting thousands of cannabis workers out of the legal market with overly stringent regulation, long bureaucratic procedures, and high licensing costs.
In a letter to provincial legislators, the BCCFC says the volume of inexpensive high-THC products available for wholesale "disadvantages small farmers in favour of the illicit market and the US-led companies that control most of BC's market."
The provincial government has launched several programs to better support local growers and processors through the licensing process to enter the legal market. However, the effects this may have on the market remain in question with the LDB still directing all distribution.
Appealing to the LDB
Though consumers may be interested in diverse product lines, craft cannabis brands, and local cultivators, the LDB ultimately steers BC's market towards government priorities.
Knowing this, here's what brands should know about winning favour with the provincial distributor:
● BC's illicit market offers a wide range of products at a low price, with higher cannabinoid content than most legal brands can provide. The LDB highly rewards producers who can compete with top-selling illicit products.
● Cannabis 2.0 is trending on the legal market, where it's heavily restricted. This may pull some consumers towards illicit products that are stronger, more flavourful, or better suit their needs. Brands that can support the LDB in displacing these illicit sales may look to lean into their craft with high-value edibles and concentrates.
● The LDB is informed by guidance from the provincial government and Health Canada. While BC legislators focus on tackling the province's significant illicit market, federal regulators largely prioritize public health. Brands considerate of consumer health, and marketing health- focused products are likely to perform well overall.
● Appealing to consumers is still a primary concern, so companies shouldn't shy away from developing new and groundbreaking cannabis products to propel the legal market.
As a BC-based company, Flow Scientific understands our province's long history with cannabis. When it comes to supporting our clients in the industry, we take a holistic approach to research product development that takes all of the local market's complexities into account.
We are GMP certified and source only the highest quality terpenes, which are quality assured by our expert team and blended to fit our clients' specific needs. Flow provides comprehensive documentation for Health Canada compliance, and our knowledgeable staff can guide you through the dense regulatory framework of BC's legal cannabis market.
Contact us today to learn more about our science-based approach to marketing cannabis BC, and our wide variety of product offerings.
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