“In the cannabis industry, you can’t create brand loyalty without authenticity,” says Ray Gracewood, Sr. VP of Marketing & Communications at Organigram. Read more in this exclusive interview.
Tell us about your background – and how you ended up in the cannabis industry?
I was in the beverage alcohol industry for 12 years previous, and I’ve always loved building brands. Developing brand positioning, marketing strategy, and brand identity is what fuels my creativity, and in 2015 it really looked like Canada was angling towards a leadership position to legalize recreational cannabis. The thought of being part of this industry so early, with the potential to set the foundation for marketing of legal cannabis in Canada was really exciting. It was the unknown – developing brands where they didn’t exist and really learning about consumers with little formal research to start from. I knew there was a massive market with an incredibly rich culture, but it always seemed so decentralized and untamed. It seemed like an incredible challenge. It was late 2015 when I made the call, and I haven’t looked back.
What did you discover once you made the leap into the cannabis industry, and did the excitement around the future of cannabis live up to the expectations you had?
I never expected how quickly things would evolve and change – you can’t prepare for that. I’ve been with Organigram for over four years and feel like a senior in the industry. Working in cannabis is measured in dog years; it feels like I’ve been doing this for 40 years. But what I found the most interesting was the collaborative nature of the industry. The work is a bit like a start-up, and a bit like big CPG – so I see it as the best of both worlds.
Canada’s licensed producers share many of the same opportunities and challenges. We all also have the same objective of bringing people from the unregulated market to regulated market by creating safe and trusted products.
According to Statista, the number of registered medical marijuana clients in Canada is estimated to reach 715,000 by 2020. What can you share about current state of marketing initiatives geared towards the recreational market versus the medicinal market?
In the recreational market, we have a bigger opportunity for 1:1 communication with customers and prospective consumers. In the early days, we had to build partnerships with companies that could help us do the research to understand consumer segmentation – which helped us with product development. We created brand strategies that would speak best to specific customers and their needs. We have a family of brands in the recreational market now from implementing the strategies we built.
Our focus is to create an industry built on great brands.
But there needs to be a different strategy for recreational cannabis (creating brands that appeal to consumers and their preferences) and medicinal cannabis. In the medicinal space, the focus isn’t on consumer messaging, it is on education for key opinion leaders (KOLs) – the physicians, clinic educators, or support staff. This space requires more relationship building, as well as educational resources and collateral that can support KOLs in helping patients. We don’t want to encourage medical patients to go to a clinic or ask about Organigram products if the physician isn’t prepared to answer questions or feels uncomfortable recommending cannabis products. First, we need to break down the barrier that still exists between cannabis and many physicians, and then we can provide resources for prospective patients who are ready to add cannabis to their therapy regimes.
Health Canada won’t allow therapeutic claims for cannabis products – leading to the sale of what can seem like similar and undifferentiated products into both the recreational and medicinal markets. Is this having repercussions when it comes to branding?
I think the clamour for therapeutic claims is misguided at this stage. While research is ongoing, there is still a way-to-go before we have the evidence-based science necessary to substantiate specific benefits. Cannabis affects everyone differently.
If a company makes a statement about their product having a certain effect, say relaxation, and the product doesn’t deliver on that for that particular person, then your brand loses authenticity. And you can’t create brand loyalty without authenticity.
We hear a lot of mixed messages about the effects of THC and terpenes on desired effects. Can you tell us a little more about what customers should know about potency and terpenes, and if brand marketing and education can help them in making a more informed decision when buying product?
It’s become clear that consumers have differing levels of product education, but any budtender across the country will agree that the question they get most often is ‘what’s the highest THC product?’ I think it’s fair to say that we’ve always understood this to be one of our largest educational challenges. It can be difficult to move consumers away from a price-driven market through innovative products, experiences and quality attributes. There are so many more interesting attributes to choosing a strain than simply focusing on cannabinoid levels!
Even in a significantly more mature market such as Colorado, consumers are not at the point of shopping for dried flower based on terpene profile, but in that market, they’ve leveraged high quality concentrate products such as rosins and sauces to help educate on terps as a key selling point. It’s a smart move in the right direction, but it will certainly take time for the legal Canadian market to catch up.
Tell us a bit about the different recreational brands OGI has in market?
Our approach on product development has always been depth vs. breadth. We have focused on the areas where we feel we can add the most value, where our brands make the most sense, and where we feel we can win.
Edison Cannabis Co. was built on the pillars of quality, creativity, innovation and sophistication for a mainstream consumer who aspires to achieve their inner genius. It’s a fun position that we feel has a unique angle on both the functional and emotional benefit of cannabis use. Our portfolio also includes Trailblazer and Trailer Park Buds, both of which are value-focused brands that play in different formats and pack sizes, as well as Ankr Organics, a brand that celebrates our history and experience with organic growing and a commitment to holistic health.
The entire brand portfolio and the work that was done to formulate the initial strategy was backed by research and data. As we move forward, the insights we continue to receive from jurisdictional partners, third-party data aggregators and research partners are instrumental to understanding changes in the market.
The rate of change in cannabis is unmatched in any industry – you either pivot or die. Without the data we have received to help us make sound decisions quickly, we’d be dead in the water.
Finally, what challenges do you hope to solve for as a marketer and advocate for the cannabis industry?
I want to understand more about what keeps people in the illicit market, what pain points they have when it comes to their buying behaviours, and how we can help solve them. Unfortunately, I’m unconvinced that everyone cares enough or knows enough about the importance of product consistency and testing. We need to make a better argument for the importance of quality, tested product, how unregulated products differ from regulated products, and how to identify them.
There is also a disconnect in terms of value…price comes up far too often. The market needs to right-size and determine the pricing strategy that allows for fair competition.
Lastly, we know that retail expansion has been slow, but the upside is that retailers have done an incredible job in creating positive, rich shopping environments for consumers. Better distribution will come over time, and as long as we’re patient, those environments and experiences, combined with time, will encourage changes in consumer behaviors and ways of thinking. I believe we’ll see strong growth over the coming years.