Market Entry Strategies for Cannabis CPG Brands
How to Make Your Market Expansion a Success
Are you daydreaming of expanding your cannabis brand into new states?
Many cannabis companies are ready to capitalize on new markets and transition their strategies into expansion mode.
If you are considering entering a new state, it is crucial that you have a solid game plan ready, an established team, and partners you can trust. Typically expansion takes a minimum of 6 – 18 months to complete, do you have your target market research, business goals, sales forecast, and product positioning in place?
In this webinar, we will be crossing state lines to discuss market expansion with cannabis industry veteran Joe Hodas, CMO of Wana Brands.
During our 30-minute webinar, we’ll cover:
- Launch plan: How to determine which markets are best for expansion
- Partner relationships: Building a trusted team and outlining contractual obligations
- Education: Developing a brand that creates and supports community
Don’t miss this webinar if you have your sights set on nationalizing your cannabis brand. Plus, the race to the bottom, what Joe’s thoughts are on discounting to stay competitive.
Eyeing New Markets: When is it Time to Expand?
00:12:38 – 00:15:03: Guillermo Bravo and Joe Hodas, Chief Marketing Officer of Wana Brands, talk about the intricacies of expanding a cannabis brand into new markets – starting with thorough preparation. Joe offers several key suggestions for resource allocation, supplier relationships, comprehensive planning, and market dominance. He advises growing companies to optimize existing resources in their current market before branching out into new territories. Successful market expansions require dedicated teams, clear supplier partnerships, foolproof strategies, and thorough SOPs to meet brand standards. Lastly, he highlights the importance of establishing a dominant presence in a particular category before expanding into new markets.
Checklist for Expanding your Cannabis Brands into New Markets
00:05:40 – 00:10:16: Joe Hodas shares the fundamental prerequisites for brands aiming to expand into new markets within the cannabis industry. The key takeaways highlighted include:
- Partner Selection: There are two primary models – (1) investing heavily in securing licenses and facilities or (2) adopting an asset-light approach by finding a partner adept in production and distribution in the target market, with philosophical and cultural alignment.
- Financial Preparedness: Stressing the need for financial resources, double or triple anticipated costs, and having dedicated funds to avoid financial constraints during expansion.
- Legal Framework: Establish a robust and legally sound contract to prevent disputes by delineating responsibilities, revenue sharing, and production obligations.
- Partnership Readiness: Select a partner who’s prepared to face the challenges of the cannabis industry. They should be ready to navigate legal, compliance, and competitive landscapes.
- Compliance and Market Analysis: Find partners well-versed in local compliance, stay updated with regulatory changes, and conduct thorough market analysis. They will understand unique consumer demands, distribution nuances, and the need for tailored consumer education strategies.
Obstacles Cannabis Brands May Face During Expansion
00:12:38 – 00:15: Joe Hodas sheds light on the challenges brands face when expanding into new cannabis markets. Their largest obstacles are:
- Regulatory Hurdles: Varying regulations across different markets hinder MSOs from providing a consistent brand experience. For instance, packaging constraints, color limitations, and even naming differences like “Chews” vs. “Gummies” in certain regions.
- Product Standardization: Changes in regulations that affect product formulation, such as dosing requirements or cannabinoid restrictions, can disrupt product consistency and potentially impact efficacy.
- Brand Representation Control: When relying on partners in an asset-light model, managing brand voice and representation becomes complicated.
These challenges emphasize the complexities brands face regarding compliance, product standardization, and maintaining a cohesive identity when expanding into new territories within the cannabis industry.