New Report: Canadian Cannabis Companies Are Falling Short on Distinguishing Their Brands to Consumers

For any Americans looking north these days to Canada to learn how cannabis startups in the Land of Maple Leaf are faring there two years into national legalization, a data-rich new report offers insight.Turns out that Canadians, in several important respects, are … just like us.
Joan Oleck
Written by Joan Oleck, Cannabis Journalist
Last Updated

Specifically, Canada’s brands are falling short on distinguishing themselves from their competitors, and given today’s economic stresses, that’s opening the door to their potential demise if they don’t turn things around, according to the report, Which Brands Are Winning Over Canadian Cannabis Consumers?

“For now, it’s anyone’s game, says the report, released last month by Chicago- Brightfield Group which tracks cannabis and CBD brands. “Initial brand-health data shows the market is ripe for disruption, and the size of the company does not directly relate to consumer awareness, purchasing or satisfaction.

“Analysis of the top 10 purchased brands,” continues the report, singling out brands Tweed and Aurora in particular, “shows that many of the most notable LPs [licensed producers] have ways to go in terms of satisfying consumers and converting consumers into brand loyalists and promoters.”

Jamie Schau, Brightfield’s international research manager, echoed those findings in an interview, putting that phrase “ways to go” idea into human perspective. “When consumers walk into a dispensary, they are often going doe-eyed to the budtenders and asking, ‘What do I buy? I’ve never done this before!’” Schau said.

“The budtenders have varying levels of training. That’s definitely a spot where there’s room for growth.”

So, such evidence of an under-educated consumer base is one cultural hurdle for Canadian brands. Another – and one Americans may be unaware of – is that Canadians greatly prefer to shop in person. Reason: They’re suspicious of online credit card transactions. In 2019 nearly all transactions in Canada occurred a brick-and-mortar stores, Schau said. That was surprising given that Ontario Province has 40 percent of Canada’s population but only 53 stores.

Brightfield, which tracks brands in Europe, and increasingly in Israel, saw the time as ripe for looking again at Canadian brands, two years into recreational cannabis’s legalization there. Starting in 2020, this year also marks the start of what Canada’s industry is calling Cannabis 2.0, meaning that new product classes like infused items, topicals and concentrates are being allowed for the first time. In addition, there are new branding and marketing restrictions as to how companies may design and promote their products.

Some 3,000 cannabis users were surveyed by Brightfield. “What we’ve found,” Schau said, “is that a few of what were the first movers in this space have gotten some traction –- [but] the lion’s share of Canadian brands are struggling even at the most basic level of being recognized as brands among current Canadian cannabis consumers.”

Another reason for the industry’s problems, besides its under-educated public and consumers’ reluctance to buy online, is Canada’s irregular regulatory framework. In fact, among its ten provinces, Canada exhibits almost as much of a a patchwork of regulatory confusion as the U.S states to its south. “There are age limits,” Schau explained, listing them. “There are vape bans in some provinces [and, she said, a sizable vape tax in Alberta].

“There are market limitations, in that everything has to be childproof in messaging and flavor and size and shape.”

There are also limitations in dosage, Schau said, with edibles constrained by a low dosage of 20 mg. per package – versus vaping products’ much higher dosage limit. There are restrictions on retail store openings and on how a brand may and may not convey its message to consumers.

Some, brands of course, are doing better than others. Among those that drew “likely to purchase again” ratings from Canadians surveyed were Canaca (99%) and Flowr (96%). Brands that consumers said they were likely to recommend included Royal High (92%) and Flowr (91%). And, for overall satisfaction, Canaca (97%), Flowr (97%), and Canna Farms (96%) scored high. AltaVie scored well (92%) for satisfaction with price.

The point is that the other brands have some catching-up to do, Schau points out, saying this shows in the Canadian industry’s increased employee layoffs and closure of grows. But “The turning point is that consumers are becoming more limited in their spending, and this is a really perfect moment to either have captured new consumers or died trying,” Schau says of the new “2.0” product era.

At this point there’s more exposure for smaller brands, the manager says, but their product has to be there, has to be solid, and has to have value. Brands also have to stop worrying about investors and worry more about consumers.

They might also want to look south to the United States because at some point this country is going follow in Canada’s legalization footsteps. And, “Look at the size of the prize,” Schau points out: Canada has 37 million people; the U.S. has 328 million.

Yet because Canada is similar to the U.S. in the way brands have to adjust to multiple provincial scenarios, “if you’re able to navigate that successfully, you’re already well-positioned to merge into a federally legal recreational market in the U.S.,” Schau opines.

And from this side of the international border, U.S. cannabis companies are surely learning from Canada’s companies as well, Schau says. They’re learning that those of them that are already power players, already multistate operators, and already partnering with packaged goods companies (e.g., beer brands) will be sitting pretty once legalization marches south of Toronto, Winnipeg and Vancouver.

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Joan Oleck
Joan Oleck
Cannabis Journalist
Joan Oleck is a freelance writer currently specializing in the cannabis industry and cannabis tech. She has been an editor and reporter on staff for such publications as Forbes.com, Business Week, Newsday and The Detroit News. She won the Jesse Neal Award for best feature series in a trade publication, Restaurant Business, and a GLAAD Award for a Salon story about discrimination in adoption against single and gay parents

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