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Why Controlling Your Cannabis Brand Experience Across the Board is Key

By Dr. John Oram

While the adult-use cannabis industry is rapidly growing, it’s still young with most companies in the start-up phase. And while the opportunities may seem boundless, businesses must also learn to navigate through the seemingly endless and ever-changing government-mandated regulations.

So what should aspiring adult-use cannabis market professionals consider when starting their businesses and how can a newly licensed cannabis company control their fate in this industry and achieve long-term success? Put systems and operations in place to control your brand experience every step of the way. Companies are so burdened with convoluted and costly taxes and regulations – from testing, to packaging, to transportation and beyond – managing the supply chain from start to finish is your best bet to remain both compliant and competitive.

In the early days of the licensed cannabis industry, the majority of businesses were vertically integrated out of necessary. It was extremely difficult to secure inputs of top, reliable quality at a stable price. Now that’s changing – there are many great cultivators offering manufacturers and distributors premium flower. However, the vertically integrated model still offers a benefit that can’t be judged by price and convenience:  full trust and pride in the product you are introducing to the market. Most states (except for Washington and Louisiana) that have legalized adult-use and/or medicinal cannabis allow for vertical integration and 11 states, including Colorado and New York, actually require medical cannabis companies to be vertically integrated.

Common strategic business management principles indicate that vertical integration can allow companies to have more control over their costs, saving money on important steps like transportation; and as a result, increase profits. But it goes deeper than that – the vertically integrated model also gives brands the opportunity to directly connect with consumers and keep their message consistent across the board. Proper, consistent representation of a brand’s message is an extremely important factor that passionate business leaders value. By taking charge of manufacturing, distribution, and wholesale and retail sales, a company can weave its desired messages into their brand’s narrative to better ensure loyal, returning customers, while also learning more about and responding to the evolving needs and wants of those customers. To put it simply, if certain products prove to be more popular than others, a company can seamlessly adjust their supply chain to respond accordingly.

However, one aspect of the supply chain most commonly outsourced, often by regulatory necessity, is lab testing. In this case, companies should be meticulous when it comes to their lab selection process. Take the time to meet with lab teams and interview them about their science and processes; base your decision on factors beyond pricing and turnaround time. Once you’ve selected a lab, communicate with the team regularly – most quality labs have account representatives happy to speak with you on a daily basis. And avoid industry pressures to bring your products to market as quickly as possible — a burden that often falls onto the lab. Give them the time they need, even if it’s a week, to properly test that your cannabis is clean. To avoid supply issues during the testing process, distributors should build a standing inventory. Labs aren’t designed to hold you up, they are here to assist your company in putting out products that are as pure as possible.

The expansive, vertically integrated model can do wonders for inspiring confidence in both your brand’s employees and consumers. This broad, hands-on approach is a complex way of doing business that is not for the faint at heart, but through dedication, patience and perseverance, it can be the most effective strategy to deal with the hodgepodge of industry rules, and to consistently introduce great products to the adult-use market.

 

John OramJohn Oram

John Oram

Dr. John Oram, Ph.D., is CEO & Founder of NUG, an Oakland-based, vertically-integrated cannabis company with strong historical growth and performance. Founded in 2014, NUG continues to expand and diversify its portfolio, which includes world-class R&D, state-of-the-art cultivation, extraction, and distillation facilities, one of California’s largest wholesale cannabis distributors, and the new NUG retail store experience.

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