The CPG of Cannabis: Trying to be the Bud of Buds
In 2014, brands began referring to themselves as The Google of Cannabis. It framed the business as innovative, disruptive, and anything but Stoney. The nom de guerre’s expiration date made way for the latest catchphrase, The CPG of Cannabis. A business struggling to coax investors will gravitate towards this safe word, but I question the trend – here’s why.
What does CPG stand for?
Consumer packaged goods (CPG) are items used daily by average consumers that require routine replacement or replenishment, such as food, beverages, clothes, tobacco, makeup, and household products.
Commoditization of Weed
CPG (industry speak for consumer packaged goods) is populist and conjures specific imagery. Miles of aisles; cereal boxes, canned goods, frozen pizza, and 27 kinds of shampoo. Unlimited points of distribution, and maintaining the status quo. CPG stands for predictability, but is that the roadmap for the rise of cannabis brands? Without question creating a national marque is a game-changer, but federal legalization remains years away. As an agricultural commodity, we have to proceed carefully and not jump the gun. Is being one more indistinguishable brand our goal considering the competitive nature of the space?
CPG companies are pros when it comes to executing go-to-market strategies. Their research is vital; internal divisions are devoted to the work and dig deep. The market insights they’re able to uncover are impressive. Conversely, conducting market studies is something few cannabis teams prioritize. Consequently, one cause of failure in our business is not asking the market what it wants. If you don’t evaluate product gaps, price sensitivity, the customer profile, and the competitive set, you might as well set your investment cash on fire in the street.
Weed Packaging Market will be worth USD 297 billion
By 2026, the cannabis packaging market is predicted to be worth USD 297.51 billion, registering a CAGR of 22.59 percent. Due to the growing demand for medical and recreational cannabis products, the cannabis packaging market is expected to experience notable growth in the next few years. As more countries legalize cannabis, the future market for cannabis will likely grow.
Medical Cannabis Packaging
Since more and more states have legalized medical cannabis, the cannabis industry is growing at a tremendous rate, creating an increased demand for its packaging in the emerging market.
There are a lot of regulations imposed by various governments across the world regarding the packaging of cannabis. Cannabis can, for instance, be found in flowers, extracts, or edibles, which can be extracted as oils, extracts, or edibles. There is a growing market for medical cannabis packaging, thus allowing various companies to provide holistic solutions to their manufacturers.
Challenges faced in Medical Marijuana Packaging
Producers of medical marijuana food are exploring new frontiers in marketing and packaging their products. On the one hand, there are strict legal requirements with different regional laws, and on the other, there is a need to educate customers
Medical edibles have unique legal requirements in each state
For eg, Serving sizes must be individually packaged in Washington.
Each state has its own requirements for the wording on the labels. Frequently, this is the case with warnings and language. For example, in Washington, packaging company cannot use the word “dose” but must instead use the word “serving”
Cannabis Investors Bring the Real Green
The rush of Wall Street money attracted investors blind to the volatility of the space. The idea that they were raising capital for The CPG of Cannabis made the fear or disdain for the plant more palatable. Fast forward to 2020, and angry Boards of Directors are revolting over financial results. Once the smoke and mirrors are laid bare, the picture is bleak.
Building a Cannabis Business Requires a Different CPG Playbook
You don’t build a cannabis CPG company just by poaching CPG talent. I’ve observed this disaster first hand. Hiring staff and presuming an immediate paradigm shift is dubious. Newsflash – cannabis is scrappy. The ground game is vital; it’s hand-to-hand combat. Executing can be foreign to marketers from the CPG world. Third-party agencies are engaged to manage everything from style guides to field activities. The setup works for brands at a mass level, but building a cannabis team with the CPG playbook isn’t a recipe for success. Overlooking the differences in scale and infrastructure is a fatal mistake. These marketers are talented but many find themselves miserable. Market volatility, management styles, the lack of structure; the result is attrition, and the outcome self-evident. It’s not that CPG alums can’t do the work; hardly, but in their eyes, the business operates in an archaic and inefficient way; career-wise, it feels like a waste of time.
You don’t have to be ride or die about the products you market. Friends of mine promote software solutions, musical equipment, and interior design without emotional immersion. I’d argue cannabis is different. If passion for the plant, its ability to change people’s lives, and the heart of the culture are irrelevant to you it’s just a frustrating business that most can’t or don’t want to embrace.
Organic Growth and Authenticity Wins the Day
Yes, cannabis is a consumer packaged goods. And yes, developing a national brand is going to be a huge win. Let’s take the best practices from CPG but never forget organic growth, authentic brands, and building real loyalty. No weed before its time? Maybe so.