The Industry's Response to Tought Times? Keep Costs Down
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The COVID-19 pandemic has done tremendous damage to our economic system and has made household budgets tighter than ever.
But according to New Frontier Data, since the onset of the Pandemic, Americans of all ages are consuming significantly more cannabis––44 percent more for Baby Boomers, and 36 percent more for Millennials, contributing to a 25 percent increase of cannabis sales vs. 2019. The demand is so high, in fact, that a reported 45 percent of consumers were ready to ‘seek alternatives’ if they could not obtain access to cannabis through regular channels.
To meet the increased demand and serve their mission of providing affordable and high-quality Cannabis to Americans, several growing cannabis brands have introduced ‘value’ strains and products at lower prices. Here are some of the ways these companies have pivoted.
Potenenty, palatability, and price.
As their name implies, Cali’s Roots Cannabis focuses heavily on sustainable farming practices that create a quality product without compromising their high environmental standards.
“Even in uncertain economic times, our customers still care about the quality of what they put into their bodies and the environmental impact of their purchases. We launched Roots to make sure that people always have access to high-quality, mindfully-cultivated cannabis at a price point that’s accessible.” Adam Steinberg, co-founder at Flow Cannabis Co.
As the pandemic has evolved, their prices have remained accessible: $18 for an eighth, $120 for an ounce, and $32 dollars for sugar.
The key takeaway for other entrepreneurs goes back to their belief system of potency, palatability, and price. These 3 key pillars have helped Cali build an unrivaled community and loyal customer following. Creating the best product, at the highest quality, for the best price will always allow you to win in your industry.
“Let’s make friends.”
Baker’s tagline is “let’s make friends,” and with their prices, they certainly are. While only a few months old, Baker’s Cannabis Co. is projected to be in 300 California stores by the end of 2020, with a 75% market penetration share. Within that, they’re also on track to sell two million––yes, two million, pre-rolled joints by the end of 2020.
Along with that, their production has increased, with new SKUs like 4-pack pre-rolls, and 0.5-ounce pouches coming on the market. The 0.5-ounce pouch is a unique subcategory offering for the daily/weekly user in the crowded cannabis market. You can get a 1g pre-roll for $6 dollars, and 0.5 Ounce Pouch for $60 dollars.
“Friends show up when times are tough––with incomes dropping, jobs disappearing, cannabis taxes rising and Covid-19 spreading throughout our communities, Baker’s encourages consumers to remain in the legal market, holding the line against the black market for dispensaries,” Sam Arellano, Chief Marketing Officer at Canndescent (Canndescent is the parent company that launched Baker’s Cannabis) likes to explain.
The lesson that can be taken away by other founders is that maintaining strong ethical boundaries can create brand adoption and loyalty. Canndescent’s business model of helping consumers stay in the legal market shows a commitment to the people they serve, with the hope of ultimately fostering long-term relationships with their customers.
Elevate, connect, and inspire good.
As Michigan’s largest cannabis company with over 10 locations in the Mitten, Skymint believes in the power of a ‘good smoke session to elevate, connect, and inspire good.’
They’re not just blowing smoke. Committed to their motto of inspiring good, Two Joints has partnered with the non-profit organization ‘Last Prisoner Project’ in efforts to bring restorative justice to the cannabis industry to end the criminalization and unfortunate stigma that stands in the way of all the positives cannabis brings.
Skymint’s popular offerings are available in eighths and 2-pack pre-rolls, with two eighths available for $60 dollars, 1 eighth available for $35 dollars, and a two-pack of pre-rolls available for $28 dollars.
Medical sales in Michigan that had remained stagnant for several months in 2019, saw a 48% increase in monthly sales between March-May of 2020, according to New Frontier Data.
“While medical cannabis has been a fact of life in Michigan for over eight years, recreational cannabis is only now becoming accessible to everyone. Our decision to launch our Two Joints brand was really inspired by our desire to help all Michiganders feel good and find joy during these incredibly challenging times,” Laurie Gregory, Chief Product and Brand Officer at Skymint Brands.
The takeaway that can be applied to any startup is that when your business is rooted in a social cause, you can create brand loyalty and overcome any obstacle. Skymint’s commitment to the community with their non-profit work is a valuable lesson for businesses, as taking action for the greater good is the best way to show consumers that they are cared for in today’s market.
Indeed, as the pandemic continues, one thing is for sure: Cannabis companies have arrived. Their willingness to forge ahead and create affordable products is greatly appreciated by a public hit hard by a global health crisis. And, the unique positioning for each brand is a glimpse into how to pivot amidst economic uncertainty, which can be adopted by any entrepreneur.