Legal marijuana: why it could be fertile ground for the next mega-brand

Bayne and Caldini are part of a growing crowd of executives from blue-chip companies who have joined the cannabis industry – a group that includes suits hailing from Hershey, Hostess Brands and Philip Morris.

For Bayne, the attraction is clear. “As a businessperson, a marketer and a consumer, there is an unbelievable opportunity here in North America. Specifically, as we work in partnership with state and local governments as they open markets to deliver to consumers something that hasn’t been available before,” she says.

The US is poised for mass legalization with New York, Pennsylvania, Connecticut, Maryland and New Mexico looking into green-lighting recreational sales. Five new states joining the fray last November, including New Jersey. Additionally, federal banking and social reform surrounding cannabis has gained strong momentum.

Even with only parts of the country open for “adult use” sales, retail dollars are projected to hit $25 billion this year, according to Marijuana Business Daily. By 2024, that number is expected to increase to an estimated $37 billion.

“People didn’t pull back on marijuana spending in 2020 because they were worried about their pocketbook. In fact, they spent more,” says Pamela Moore, the publisher of Marijuana Business Daily. “Everyone is expecting a federal program to emerge, so they are jockeying to be the Coke or the Pepsi, or the McDonald’s if you’re talking about storefronts.”

Why touting THC isn’t enough

The allure of the cannabis category is quite simple. It’s a fragmented space with no clear brand leaders. “One of the reasons we are seeing more mature, marketing professionals enter the space is it is the land of opportunity,” says Gary Allen, chief operating officer of for New Frontier Data, an analytics company specializing in the cannabis industry.

He says to date, many brands mistakenly thought that they could sell a product if they claimed it contained THC or CBD. “What they forgot is we still have to do very traditional brand building and create brand advocacy. There needs to be an organic understanding, by consumers, as to why they should pick your product over the hundreds, if not thousands, of other products.”

Bayne says that the opportunity is “wide open,“ noting that “if you ask anyone about cannabis or THC, they have some awareness, but they don’t know where to turn.” As states open up, having “a great strategy and having a product pipeline with brands that are communicated with the appropriate value [proposition]” will be key.

Acreage Holdings already has an agreement to join Canopy Growth, currently one of the largest ’seed-to-sale’ operations. Acreage brands include The Botanist retail outlets and products (edibles, vapes and other items), the Live Resin Project (vapes and other products) and Prime medical marijuana products. This summer it will debut a THC-infused beverage in California, and later Illinois.

Given that marijuana is still a federally illicit drug, there are numerous obstacles to navigate for brand packaging and advertising, and every state has different nuances. Nevada, for example, has clear laws designed to protect children from mistaking THC products for regular snacks.

Bayne sees these differences as a chance to go hyperlocal. “It’s a huge opportunity to build a local brand that gets people engaged.” Acreage is going for more of a higher-end look and feel with its retail brand The Botanist. It is touted as being rooted in “education, community and experience.” Retail locations are described “as a warm, welcoming environment for the millions of consumers who are new to cannabis,” per the company.

It is also eager to tout the health aspects of its products. Acreage made headlines for a 2019 Super Bowl ad rejected by CBS. The spot lays out many of the medical benefits of marijuana and included a call-to-action for Congress to legalize.

Planting the seeds for long-term brand success

For the first time, in 2020 more edibles were sold than “flower,” according to analytics firm New Frontier Data. Allen says that data tells marketers that “key consumers aren’t ’stoners’.” In fact, only 17% of consumers are heavy recreational users. He says the biggest audience is women aged 35-50 and the fastest growing segment is people over the age of 55. “They’re not prone to smoking a joint, but they will eat a gummy bear, worm or piece of chocolate,” he says.

Marijuana Business Daily’s Moore is increasingly seeing brands take pages out of the consumer-packaged goods playbook when targeting audiences. Brands are “talking about how they are healthier because they aren’t putting corn syrup in edibles or there’s no animal byproducts. They are talking about being purpose driven and forming partnerships with influencers. It’s not about drug culture, it’s about being associated with values consumers embrace.”

Bayne sees numerous parallels when it comes to marketing Coca-Cola. “We focused on moments of uplift. We needed to remind people why they drank it, why they needed it and that it was that moment of bliss.”

For Acreage’s products and others, success will lie “in having a very clear, defined brand premise and promise, delivering it carefully every day and communicating it in a way that has authenticity,” says Bayne. It must “keep up with their needs, asks and demands for convenience, for portability and for enjoyment.”

There’s plenty of work to do “as we are really starting from ground zero in most of the States,” says Bayne. But there is also plenty to be optimistic about. As she says, “the sky is the limit.”