Since before legalization in Canada, cannabis brands have been fighting for attention to secure a spot within the hearts and minds of Canadian consumers.  Many medicinal cannabis brands were already available, but post-legalization an overwhelming surge of new entrants were announced. These brands were designed to appeal to the recreational consumer.  As we’ve covered in our Cannabis Recession article, the belief was that this was the way to profits and sales as new consumers flocked to this newly-legalized category.  Throughout 2018 (and prior), consultants, advertising agencies, design shops and packaging specialists were all charged with creating the future household names for Canadian cannabis.  

Despite a highly regulated marketing environment, about 110 recreational cannabis brands are now available in Canada. In the coming months, consumers will have even more choice at shelf. More retail locations will open across the country and licensed producers will stabilize their production capacity.

Creating Cannabis Brands in Canada

Over the past 24 months we have seen various approaches to marketing cannabis in Canada.  The two most common could be classified as “those who spent a lot” and “those who spent nothing at all”.  Certain brands, like Tweed, have taken an aggressive position, focusing on mass marketing, endorsements, event sponsorships and high visibility/reach partnerships (e.g. Cineplex VIP).  Others have laid low and done only organic promotions of their brands and attended some trade shows, industry events, etc.

Since October 17th, 2018, there hasn’t seemed to be a strong positive correlation between dollars spent and growth in brand awareness. Examining the top 5 Canadian brands in the first two months post-legalization (October and November 2019) shows that Canopy (Tweed, LBS, Spectrum), Aurora, and Canna Farms came out of the gate with high awareness. For Canopy and Aurora, this came at significant marketing expense.

BrandAided Awareness (Oct – Nov 2018)Unaided Awareness (Oct – Nov 2018)
Aurora22.3%2.4%
Tweed20.1%3.1%
Leafs by Snoop/LBS9.0%0.2%
Canna Farms8.8%0.1%
Spectrum6.9%0.4%

Source: Cannatrack data, “Name a cannabis brand that you know” and “Which of these cannabis brands have you ever heard of?”, October – November 2018, n=1,502

The strongest correlation we have seen so far is in brands whose corporate name matches their brand name. These brands seem to score consistently higher on brand awareness metrics.

 Unsurprisingly, consumers had low awareness of available brands in the two months following legalization. They were also generally unable to identify brands that they had tried or consumed in the past 4 weeks. Across both of those metrics, we found that users could only identify a brand that they’ve tried or consumed recently around 40% of the time.

Which Brands Are Strongest After 16 Months?

Fast forward 16 months since legalization. The industry has been volatile, but the story as it comes to brands remains relatively unchanged.  Despite a significant spend in marketing by Canadian licensed producers, the general health of most brands has stalled and in some cases has declined.

Sixteen months after legalization (October 2018 to February 2020), the same four brands (Tweed, LBS, Aurora and Canna Farms) continue achieve the highest levels of brand awareness and claimed trial. These brands have had less than a 2% increase in terms of aided awareness vs. Oct/Nov 2018.  HEXO (formerly Hydropothecary) is a new entrant on the top brands list when we look at Q4 2019. HEXO launched in 2018 and was extremely aggressive in terms of marketing and promotions, with spend totaling 8-figures between 2018 & 2019.

BrandAided Awareness (Oct 2018 – Feb 2020)
Aurora23.6%
Tweed19.3%
Leafs by Snoop/LBS9.0%
Canna Farms8.6%
HEXO7.7%

Source: Cannatrack data, “Which of these cannabis brands have you ever heard of?”, October 2018 – February 2020, n=16,703

Despite the time in market and significant marketing initiatives, Canadian consumers are only slightly more aware of legal brands than in October/November of 2018.  Consumers who were completely unaware of brands they had tried or recently consumed have declined slightly. However, this only represents a 2% change since Oct/Nov 2018, with 40% still unaware of what brand they are consuming.

Are the Tides Changing?

It can’t be understated how monumental the undertaking of launching legalized cannabis was for Canada and its licensed producers.  Illicit cannabis in Canada was and still is a multi-billion dollar industry with quality product and loyal consumers.  With the current restrictions in place, promoting legal brands is incredibly difficult. However, it seems as though the industry as a whole is beginning to strengthen.  

As we saw, most of the brands in Canada experienced nominal growth since legalization. In the most recent three months (December 2019 to February 2020) with the introduction of Cannabis 2.0, mass retail openings and legal supply stabilizing, Canadians are slowly starting to wake up.  We have seen a lift in brand health metrics across the board from December 2019 to February 2020. While we cannot attribute this to any one cause, it does seem that cannabis brands are beginning to grow in terms of consumer recognition and awareness.

The outliers in this trend are cannabis giants Canopy and Aurora.  Aurora’s declines since the previous 3 months have been the most pronounced at ~2% in both aided awareness and trial.  Tweed has lost approximately half a percentage in both metrics, but Canopy as a whole has seen gains with strong performance from Tokyo Smoke. The success of Tokyo Smoke is likely driven by the brand’s increased retail presence.   With the exception of a few very small producers, all brands are strengthening compared to September-November 2019.  Some brands, specifically Tokyo Smoke, Edison and 7Acres have increased by almost 2% off relatively small base sizes. 

BrandAided Awareness (Sept – Nov 2019)Aided Awareness (Dec 2019 – Feb 2020)+/- Percentage Points
Aurora26.0%23.8%-2.2
Tweed20.9%20.3%-0.6
Canna Farms8.1%10.8%+1.5
HEXO8.3%8.6%+0.3
Tokyo Smoke6.6%8.3%+1.7
Edison5.9%7.6%+1.7
7ACRES5.8%7.4%+1.6
48North5.8%7.0%+1.2

Source: Cannatrack data, “Which of these cannabis brands have you ever heard of?”, September 2019 – February 2020. n=6,069

Most notable for the industry in general is that consumers are beginning to recognize the products they’re consuming. Unknown” trial (the % of consumers who can’t identify any of the brands they’ve consumed) has dropped from 60% in Oct/Nov 2018 to 52% in the last three months (December 2019 – February 2020) alone.

So What’s Next for the Cannabis Industry?

It remains to be seen whether this growth trend will continue and propel the Canadian legal cannabis market in terms of total sales and share stolen from the illicit market. However, this trend could signify that Canadian consumers are indeed starting to establish brand preference if only at a small scale.

As we mentioned in our post on the Canadian cannabis recession, there are a number of ways that the legal cannabis market and the brands within it can grow. Contact us to find out more about available Cannatrack data, custom media segments and custom research projects.

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