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Cannabranding Is All The Rage As Willie Nelson Announces Entrance to Cannabiz

MainStreet logo MainStreet 4/10/2015 Marguerite Arnold

As the marijuana business goes legit, longtime advocates with reputations and cash to invest are beginning to flock to the industry. Their hope is that their reputations will help them sell pot to a country with a suddenly insatiable appetite. Investors Privateer Holdings are now backing an effort to bring Bob Marley branded ganja to the market. Willie Nelson is just the latest to throw his hat into the ring. In March, Nelson announced plans to invest in a chain of recreational pot stores in states where marijuana is now legal. He is also planning on launching his own brand of marijuana to sell in these stores called Willie's Reserve.

The increase in branded offerings in the legal marijuana sector is only going to increase in the face of the new face of reform that has become almost like a Jolly Green Giant, popping up in every state. So is a multi-state business strategy, for those with pockets deep enough to play.

"Recreational branding appeals to consumer values and preferences," says to Steve Berg of O.PenVAPE. "As cannabis goes mainstream, we're going to see more branding of all types in cannabis."

That said, the current state restrictions on the industry create huge challenges for all involved. Olivia Mannix, the strategic director and co-founder of Colorado-based consulting company CannaBrand, told MainStreet how she helps her clients meet the challenges that currently face all multi-state marijuana businesses.

"We need to have several strategized marketing angles to enter different states which can be challenging and expensive," she said. Post federal reform, Mannix believes, "we will be able to distribute products from the native state of the cannabis company across state lines rather than having to license the brands."

Marc Ross, an attorney at Sichenzia Ross Friedman Ference and law professor in New York, concurs that current federal restrictions on marijuana are actually creating an atmosphere where the only recourse for companies with a national vision is to create highly identifiable products and utilize strong branding strategies to establish customer loyalty beyond a single state. "Marijuana can't cross state lines," he said. "This is a potential issue for any multi-state manufacturing and marketing model."

To many operating in the business already, however, there are some advantages of a state-by-strategy that play heavily into company identity if not brand creation. Some, like publicly traded Terra Tech (TRTC) are making this reality an integral part of their business model. This, in turn of course, impacts company if not product branding. As Derek Peterson, company CEO said, "We tailor our operations to comply with all state and local rules and regulations including sourcing our cannabis from cultivators within each state."

While production costs are higher, there is an upside for Peterson. "This allows us to track and verify the quality of our own products from seed to sale, thereby ensuring we deliver only the highest quality, locally sourced medical cannabis products to our patients," he said. "It also allows us to maintain our commitment to supporting local communities by providing jobs and tax dollars in the regions in which we operate."

Branding is also becoming an important form of consumer education. Because marijuana remains federally illegal, there are no government guidelines that exist to help consumers make choices.

"Restrictions on studying cannabis have constricted consumer access to information," Berg said. "However, consumers can now turn to an expanding set of information sources. In states with legal dispensaries and recreational stores, bud tenders can guide consumers and help inform purchase decisions." For now, Berg believes, the mainstreaming of the industry will create a crowd sourced consumer education movement. "The internet has many sites which inform cannabis consumers," he said. "Mobile apps are also jumping in. Mass Roots, for example, is a social networking app that connects the cannabis community."

According to Julianna Carella, the CEO of Auntie Dolores, a medical edible company, "We provide branded educational materials and demonstration days in the dispensary. But really what often appeals to a consumer most is well-branded packaging that is professional and informational." Carella has lots of advice for consumers who rely on branding to help guide their purchases, for either medical or recreational purposes.

She is particularly proud of her company's packaging on this score.

"On our packaging we tell the consumer how many total milligrams of THC, how many milligrams in a dose, and what constitutes a dose of each of our products," she said. "This responsible labelling should encourage responsible behaviour. We believe it's important for all manufacturers to uphold certain standards for consumer safety through education and proper labeling."

Mannix concurs with this approach, and has similar advice for consumers. "Right now there are also other entities which get the information out there to the public and organizations such as NORML and Marijuana Policy Project that help with this," she said. "We would like for patients and consumers to seek out the information they need through the various channels available."

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