When it comes to legalizing cannabis, how products are branded is going to be a key issue, affecting the industry in more than one way, says a business professor from Brock University.
Michael Armstrong, who teaches courses in quality improvement in Brock’s Goodman School of Business, says branding will affect a customer’s ability to develop knowledge about different products, their overall satisfaction, as well as play a large part in whether or not Canadian companies have incentive to produce quality products and keep them in the country.
The debate, Armstrong says, will be one of the “struggles that stands out” as marijuana is legalized.
“Cannabis is a fairly complex product in two ways, the first is it has several active chemical ingredients, there’s THC and CBD, then there’s several dozen other small ingredients, all which could affect consumer’s experience of a product,” says Armstrong.
He said varying combinations of THC and CBD alone means cannabis will have a wide variety of effects, which consumers can’t tell without trying it.
“It’s what we call an experiential product,” said Armstrong.
“Some products — like if I wanted to go buy a sweater or a shirt — I can go to the store, I can try them on, I can touch them, I can look at them. I know whether it’s a good sweater or not before I buy it. But with experiential products, like restaurant meals or going for any kind of service, I don’t really know if it’s any good until I’ve tried it.”
“And that’s the case with cannabis,” he continued.
“Consumers don’t really know what kind of high they’ll get, what kind of medical relief they’ll feel or what kind of side effects they’ll feel without actually trying the product. So we’ve got this complex product that consumers can’t really tell in advance how good it is.”
Armstrong says if companies are able to brand their product — so they can have a name and package that consumers recognize — the can develop a reputation for having certain characteristics.
“Then consumers can use that reputation as a way to say ‘okay I know from experience this brand works well for me, I can keep buying it,’” he said.
“It is a way of communicating a relatively complex product in a relatively simple way.”
Armstrong says generic products with plain package labels make it harder to communicate information about a product, making it harder to build up trust.
“It’s also harder for producers to stand out for having good quality, so there’s less incentive for them to do that,” he said.
He says that lack of incentive could lead companies to focus more on meeting the bare minimums of legal requirements to minimize their cost, rather than focusing on creating quality products.
Because of those reasons, Armstrong says he thinks marijuana branding laws should meet a happy medium between the way alcohol and tobacco are branded today.
“The provinces are kind of taking bits and pieces from how they treated alcohol in the past and how they treated tobacco in the past,” he said. “Currently the government is kind of defaulting, I guess slightly out of caution — maybe wise, maybe over-zealous — towards the tobacco model, in which advertising is very restricted.”
“On the other hand you’ve got alcoholic products, which have got restrictions on advertising, but the companies in general have quite a bit of freedom to brand their product. You’ve got all kinds of fancy labels, bottle shapes, colours and so forth.”
“The Canadian beer industry used to have just one standard sized bottle, plain brown. They could have a label on, but everything was the same size and at some point the laws were liberalized.”
He says the marijuana producers would like to see something closer to the current alcohol model.
Armstrong said he agrees, for the most part.
“I mean if you’re going to legalize, I think it’s an advantage to let the producers do some branding … Although personally it’s not something I use — I think ideally the less people that use it the better — but since people are going to use it, we should let companies establish their reputations because it’s a way to communicate with the consumer, increase trust and increase quality.”
He says furthermore, a lot of Canadian producers have plans to distribute Canadian marijuana to other countries, and if laws end up being tighter in Canada, we could end up in an odd position where Canadian companies are more interested in the export market.
“You might find that products Canadian companies sell in Canada might not as interesting as the ones they export to other countries because they have more flexibility,” Armstrong said.
He said he thinks there needs to be a happy medium between the current cigarette and alcohol laws.
“I don’t think we want any kind of advertising, promotion or branding that encourages consumption, but for people who are going to consume it, letting the producers use branding as a way to communicate so that people can find the right product for their needs is a wise step.”
As Armstrong puts it, “in this budding industry, it’s time to not only weed out the bad, but also cultivate the good.”
On Wednesday, a coalition of licensed Canadian cannabis producers released “Recommendations for Responsible Cannabis Branding and Marketing Guidelines,” where they urged the government to set looser guidelines than planned for advertising marijuana.