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FS13 – Cannabis CPG Brands Don’t Follow Traditional CPG Rules

By August 19, 2022September 16th, 2022No Comments

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That stupid LinkedIn post I did last week brought some new faces to the ol water cooler so I’d like to welcome all of you to Free Smoke and remind everyone you can check out past issues here. On that note I should tell y’all that for the time being I’m going to send Free Smoke every other Friday instead of weekly. That way I can make sure I’m writing about stuff I really want to share, not just doing it for the sake of doing it. Let’s get into Free Smoke:

“Young as an intern,
but money like I built the shit”
– Drake, No Lie

There is no right way to do this brand stuff

I’ve been working with consumer product brands for years now, long before I got into recreational cannabis. When it came time to build products in the rec space, we started by branding a single category. STICKS was a preroll brand. Beaucoup was an edible brand. Bezel was a cartridge brand. Over time it evolved into a shelf specific strategy: STICKS was the value brand, Cabana the ultra premium (in Oregon, we sandbagged it in CA in 2019), etc. Either way it was a lot of brand’s for a small company to support, but we did it.

At some point we looked around and asked ourselves some hard questions, most notably:

Would this be easier if all these skus were under one brand?

At the time Select was far and away the biggest brand in my backyard and they had done just that: one brand, in every category you can imagine except flower, and doggy CBD too. I decided to go study CPG conglomerates and parent brands to see how real consumer brands position their product lines and the relationships between them. I was looking at naming, logo marks, taxonomies, how the parent brand was represented on packaging, all that.

While Kellogg’s logo is present on everyone of their brand’s cereal boxes, Johnson & Johnson only does this on some product lines, and Nestle? These fuckin guys start half their brands with the letters “Nes” as if there’s cohesion, but then don’t even share so much as a typeface on some of the word marks.

Shown above: Hell.

I quickly found out nobody has any idea what they’re doing: and there is no right way to do it. While it seems like anything goes in the brand ecosystem, I did pull out one much more specific and useful insight that I think everyone in cannabis should take note of:

Almost all of these brands are single sku brands.

At best, they have several flavors/variations of that core sku. Very few of them extend a brand into more than one category and none of them have products that occupy every shelf in the damn store like we see in cannabis.

Think about it:

  • Doritos doesn’t do a potato chip, much less a lime soda (Pepsi has Mt Dew for that)
  • Cheez-Its sticks to crackers and doesn’t have a chocolate covered peanut to compete with M&Ms
  • Tide sells laundry detergent, Pampers sells diapers, and nobody would buy a Pampers soap or a Tide diaper

So what’s my point?

Noisy multi-category brands simply do not exist in mature consumer product markets. Period. The success of some of these overly generic brands in the early days of cannabis are a function of an immature and volatile market, not a brand and customer base with staying power. Unless it’s Trader Joes I’m not buying pasta and cold brew with the same logo on it and trust me and you’re not either.

Going forward, brands casting a wide net will rarely become dominant in any of the categories, much less overall. This strategy, which is actually just opportunity fatigue, won’t go away tomorrow but it won’t last either.

Things That Matter

  • British Columbia’s cannabis distro (government run) halts receiving and shipping to dispensaries [Link]
  • First Circuit Court affirms that the Interstate Commerce Clause passed in 1887 applies to cannabis [Link]
  • Seattle is considering a $1M grant program and licenses for convicted traffickers [Link]
  • Big cartel grow busted with 9,000 lbs in southern Oregon didn’t even have hemp licenses lol [Link]
  • 8 weeks after the mayor proclaimed they won’t crack down on illicit weed sales, NYC cops seize 20 weed trucks [Link]
  • Ascend kills MedMen deal [Link]

Btw check out my podcast

We scrapped the old format and are back on our bullshit.

If you haven’t check it out yet, this is the one: Apple / Spotify

Unrelated vibes

This wildman remixes the Nike logo with the prompt “What if Nike was a seafood company?”

Wish he would do more of these.

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Photo by Kenny Eliason