Branding An Emerging Focus as Adult-Use Legalization Spreads
January 22nd, 2018
Exclusive, Feature Stories, News
As the legalization of adult-use (or recreational) cannabis approaches in Canada, and spreads more slowly through the United States, companies operating in the established medical marijuana market have come to realize the importance of branding and are making major investments to improve that aspect of their business. At the risk of being obvious, marketing to medical patients is quite a different proposition than marketing to recreational consumers. The target audiences have completely different goals and desires.
In this article, we will discuss this trend in the legal cannabis industry and highlight one company, International Cannabrands Inc. (CSE: JUJU.A), uniquely positioned to take advantage with its widely recognizable Julian Marley JUJU Royal brand of cannabis products and retail stores.
Recent Deals Show Focus on Recreational Branding
Canada is scheduled to legalize adult-use cannabis in July, 2018. With perhaps the world’s most comprehensive legal framework for the production, distribution, and sale of medical marijuana already in place, the country has served as a breeding ground for successful cannabis companies. Though some of the regulatory details need to be ironed out as Canadian provinces finalize their plans, these companies are ramping up production levels to meet the anticipated increase in demand for products. And many of them are investing in brands and products specifically designed to target the new and larger market.
The recent merger between DOJA Cannabis Company Limited (CSE: DOJA) and Tokyo Smoke, with a major boost from Aphria Inc.’s (TSX: APH) strategic investment, is a prime example. Tokyo Smoke has two premium cannabis brands, Van der Pop and Tokyo Smoke (awarded the 2017 Cannabis Brand of the Year Award), several retail cannabis accessory stores, and a management team with deep retail background. DOJA is a licensed producer of medical marijuana in British Columbia with a focus on high quality, handcrafted cannabis strains. Aphria is one of the larger licensed producers in Canada and chipped in a $12.5 million investment for a sizable stake in the resulting company. The new company will be called Hiku when the ink dries, and it is billing itself as Canada’s first retail- and brand-focused cannabis producer.
Aphria wasn’t done, however, and just announced a deal to acquire Broken Coast Cannabis Inc. with an eye toward the adult recreational use market. Aphria valued Broken Coast’s added production (about 10,000 kgs annually) and the geographical diversity (Broken Coast is in B.C. while Aphria is in Ontario), but it appears much of the value in the $230 million deal can be found in Broken Coast’s extensive library of award-winning premium cannabis strains and the company’s widely respected brand. From Aphria’s press release, “The Transaction represents Aphria’s second major investment into consumer- and brand-focused assets, in advance of the legalization of adult recreational use of cannabis expected in 2018. The addition of Broken Coast’s award-winning BC brand and reputation for a premium product further diversifies and augments Aphria’s product portfolio.”
In perhaps the clearest sign of the importance of branding and the inherent differences in the medical and adult-use markets, the company that owns Corona and many other beer brands, Constellation Brands (NYSE: STZ), bought an approximately 10% stake in Canopy Growth Corp. (TSX: WEED). Canopy is one of the largest licensed producers in Canada, and the two companies plan to create and market non-alcoholic cannabis drinks for the upcoming recreational market.
The Julian Marley JuJu Royal Brand
International Cannabrands (CSE: JUJU.A) owns the exclusive rights to use Julian Marley’s name and personality for up to 60 years and has developed the JuJu Royal brand of ultra premium cannabis products. Offerings include cannabis flower, extracts and oils, accessories, apparel, and even autographed products. The company has license agreements in California, Colorado, Oregon, Washington, Western Europe and Puerto Rico, and plans to open up two Julian Marley-branded retail stores in the near term.
In Canada, the company entered into a strategic partnership with Maricann Group Inc. (CSE: MARI), a leading licensed producer of medical marijuana with operations in Toronto as well as in Western Europe. Under the terms of the partnership, Maricann has exclusive rights to cultivate, extract and distribute the JuJu Royal line of products for three years across Canada, following product approvals from Health Canada. Maricann also has right of first refusal to distribute these products in Europe.
It’s easy to see why Maricann made the move, as the Marley name is closely associated in global consumer minds with cannabis and positive vibes. The product line itself is premium and all natural.
“We’re committed to producing all natural cannabis, marrying our vision for ‘A World of Good’ with Julian Marley to deliver a curated and unique experience to our patients, and soon, the broader market,” Ben Ward, CEO of Maricann said. “JuJu Royal is an exclusive line of products currently offered in California and Colorado with carefully selected genetics, combined with solvent free extraction, delivering high-quality cannabis. We’re thrilled to offer this unique and quality differentiated experience to Canadians and Europeans (where legal).”
With one of the most recognizable brands in the emerging recreational cannabis market, International Cannabrands Inc. (CSE: JUJU.A) is primed to grow both in North America and across the globe. Akin to the adult beverage market where branding is king, the new adult-use cannabis markets demand a radically different approach than the current medical marijuana industry is used to taking. Expect the investments and partnerships to continue apace, and the premium brands to rise to the top.
For more information, visit the company’s website at https://intlcannabrands.com/.
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