Cannabis investors have started taking notice of how crucial branding will be for the competing companies in this space, once the markets change recreational laws.
Observers of the industry have debated the significance of owning a discernible brand will do to engage consumers and favor one company over another.
But, as noted by former Eight Capital analyst Daniel Pearlstein in a research note issued on February, consumers make decisions based on brands in other markets like the tobacco and alcohol industry, and that trend was coming to cannabis as well.
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“Soon cannabis and derivative products will go from mostly being defined by the literal description of the product to being described by origin, quality, and experiences,” Pearlstein wrote.
With that in mind, the Investing News Network (INN) takes a closer look at the recent branding efforts from two different types of cannabis operations in the Canadian market.
Organigram reveals brand portfolio
On Tuesday (May 15) Organigram Holdings (TSXV:OGI; OTCQB:OGRMF) offered investors a detailed look into the portfolio of recreational brands the company plans to develop and nurture into recognized names for legal recreational consumers.
Organigram CEO Greg Engel said the recreational brand strategy for his company “incorporates the best of what we know about our current and potential customers.” He added over 18 months of research work was completed in order to create four different brands.
The actual brands themselves, The Edison Cannabis Company, ANKR Organics, Trailer Park Buds and Organigram will attempt to appeal to four different consumer types, from organic demands to premium priced products.
Arguably the most distinct of the four is the brand associated with Trailer Park Productions, associated with the popular Trailer Park Boys television show. According to Organigram, this brand will speak to consumers who “don’t take themselves too seriously.”
Actual product offerings for this brand include pre-rolled and blended cannabis. Despite introducing these brands Organigram’s stock value decreased during the trading sessions on Tuesday and Wednesday (May 16) by 1.04 and 0.21 percent respectively to reach C$4.74.
Canadian operator announces recreational brand will lead retail strategy
National Access Cannabis (TSXV:NAC), an operator in Canada that earned one of the four critical retail licensed in the province of Manitoba, announced on Tuesday the introduction of its own recreational market brand Meta Cannabis Supply.
Meta, the way the company is also referring to the brand, will be tasked with guiding the company’s recreational efforts including serving as the face of the upcoming retail locations, set to be open where NAC has obtained licenses for.
“NAC developed the Meta brand to appeal to health-conscious Canadians who embrace the benefits of quality cannabis products,” Mark Goliger, CEO of the company said in a statement.
The concept images from NAC offer a view into a futuristic version of modern cannabis retail spaces available to consumers in Canada, with tablets offering information on the products displayed.
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The company also promised it will be offering cannabis products from CannaRoyalty (CSE: CRZ; OTCQX:CNNRF) a US-focused cannabis operator and Tilray a private medical marijuana licensed producer in B.C.
However, CannaRoyalty is not currently an LP, nor does it hold any late-stage applicant facilities in Canada. Therefore, according to Afzal Hasan, former executive vice president of corporate development and recently appointed president of CannaRoyalty, this partnership between the two companies does not have a timeline on actual production.
“Given the fact that it’s uncertain when we will be able to produce products in Canada, given the fact that it’s uncertain when the regulations are going to come out and what exactly they are going to say about the different product categories, we have taken the pathway of actually trying to secure these distribution channels first,” Hasan told INN.
NAC declined in value 3.75 percent following the announcement by the company. During Wednesday’s ’s trading session the company closed at the same price as its previous close at C$0.76.
Despite an increase in companies in the cannabis space announcing more concrete strategies in regards to the brands they intend to develop, most of these announcements won’t likely cause a huge effect on the stock performance of companies–at least until the market sees the results with legalization.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.