What does Amendment 3 mean for your cannabis brand?
Well. It’s here.
LegalMO22 will be on the ballot this November as Amendment 3 after gaining the required signatures. According to a recent SurveyUSA poll, 62% of Missourians support the legalization of cannabis for rec use.
While it may not be time to light up a SafeBet (Devil Wears Chanel 🔥) in celebration just yet, it certainly looks likely that Missouri voters will approve the initiative.
Some folks may not be inclined to celebrate at all. Quite a few people have some objections to items included in the bill. So far, no one objects enough to put PAC money into stopping it, so the pathway to LegalMO22 becoming law appears reasonably straightforward at the moment.
So whether you’re excited or concerned, LegalMO22 has a good chance to become the reality of the Missouri cannabis industry very soon.
But what does that mean for the local cannabis brands looking to expand into commercial businesses from medical?
What will legalization mean to manufacturers who are already beginning to face off with industry giants like Cookies on the shelves of dispensaries?
One could think of endless opportunities. And this is perhaps the case. However, when new commerce comes in, the little guys will have a fight on their hands. Large, heavily funded – and in some cases near decade-old cannabis companies – will continue coming into Missouri. They will have seemingly unending reserves of marketing dollars. They will have brand awareness before they open and are available on shelves. They will have a fantastic product, beautiful packaging, and a story to tell.
They will know their target market. They’ve defined exactly who they are and how they are going to speak to their consumers. They will have hundreds of hours spent developing their sales funnel and a lock on the tactics they use to accomplish goals. They will have supply chain synergies. They will have sales teams. They will have retail and online promotions.
They will have a plan. Then they will execute it.
Homegrown brands must invest in their brands early and often if they want to compete in the long term. Our Missouri brands have the great blessing of being able to build with a narrowed state-wide focus. They must take advantage of building customer loyalty with focused marketing dollars and competition that more or less starts on even ground and at the same state-wide starting line.
What a rare opportunity. It’s not every day that a $350M industry emerges with this much room for local brands to grow.
Here are five ways homegrown Missouri cannabis brands can compete when the room gets bigger.
1. Invest in branding early and often
As the market expands and more licenses are issued in Missouri, differentiation will become paramount. The brands that tell the most engaging story will always win. A great example of this is California brand OLD PAL. 1. They created a lifestyle brand to run parallel with their cannabis brand, targeting the artistic, Bohemian crowd with beautifully designed merchandise, progressive slogans, and one hell of an Instagram Feed. They knew their target market and created ways for people to engage with the brand without even making a cannabis purchase. The result was a $8 million cash infusion for expansion beyond the 7 states it already serves.
They did it without becoming everything to everyone. They made a kick-ass brand and paired it with kick-ass creative. They knew who they wanted to be, who they wanted to serve and where they wanted the brand to go.
Define your target market. Define your voice. Define how you’re going to speak to your customers – and more importantly – how you aren’t.
2. Communicate directly with consumers with automation
A mobile communications strategy is absolutely vital in the cannabis industry right now. We’re still limited in traditional ad buys, so talking directly with your potential and existing customers is paramount. If you can begin to involve them in your brand at a fundamental level, you can create a relationship that will be stronger than a Walmart of weed that comes in after rec.
This is a 16-month view of Google searches for our dispensary client in SWMO. We’re super proud of our steady climb with them and even more amped about the recent surge in interest.
That big-ass climb over the past few months coincides with our new mobile communications strategy for them. Direct comms with existing and potential patients has been a game changer for their brand. It goes far beyond just sending out a mass text. It’s about a personal connection.
If you tap someone on the shoulder digitally, you better have something relevant to say when they turn around.
3. Play the right game on socialMost brands are already aware of the shift on organic social from feed to short form video over the past 12 months. The battle between Reels and TikTok has completely changed the social landscape, forcing brands to play the SFV game to stay relevant. I1. You may be falling behind if you’re still relying on the feed as your primary social strategy. But it goes beyond just making the content. Brands have taken a hit since this evolution, primarily on Facebook, where brand pages expect about 2.5% of followers to see their content.
SFV gave even more clout to influencers, growing the influencer industry to nearly $20B in 2021. Nearly every major brand in America is investing heavily in influencer marketing in some form or another.
Regarding our industry, every brand in Missouri has someone in the organization who would qualify as an influencer, whether the founder, cultivation director, or budtender. Somebody loves talking about weed. There’s an opportunity to share that personality on SFV to feed the algorithm the content it’s looking for and simultaneously showcase your brand’s experts.
4. It’s time for a media strategy that can truly reach the masses
We all know the limitations of advertising on platforms like Google (email me if you wanna know how this can be done), Meta and TikTok. Until cannabis is federally legal, those aren’t very good options to drive a ton of ROI. But that doesn’t mean you can’t advertise. Omnichannel campaigns using TV, podcasting, targeted display and many other ad inventory types are not only possible, they’re just sitting there waiting for cannabis brands to pounce.
With OTT, we can now serve ads on the most popular streaming apps and then through the wifi network and other connections, we can serve retargeting ads to the viewer of your commercial. Furthermore, we can geofence your business and measure when viewers enter your establishment. We ran a campaign like this to launch a Springfield, Missouri dispensary and people started coming in after seeing it the first day the spot was aired. The best part is that OTT costs a fraction of traditional TV. Our campaign had a modest budget and ended up with a $25 cost per one thousand impressions. For reference, traditional TV campaigns are nearly $40 per thousand. That $15 difference adds up quick when you’re reaching 100,000 people.
Omnichannel campaigns have also reduced thresholds that kept new brands away recently. Just a few shorts months ago, demand-side platforms had costly monthly minimums that made it very difficult for young brands to participate, but with emergence of companies like Ryan Reynolds’ MNTN and Simpli.fi those minimums have been reduced. This means that industry specific advertising options like Surfside will have to expand their offering to keep pace with the feature-rich DSPs that are now in reach for Missouri cannabis brands. The competition has spurred a wealth of opportunity for cannabis companies. Along with a killer creative concept, these advanced advertising channels can make moving units easier than ever before.
5. Measure ROI!
When you’ve got the brand, the communication strategy, the social game, and campaigns out in the world you’ve got to know what they actually do for your bottom line. In a past era, ROI on something like a TV spot was just measured by whether business went up or down. Now, we can tell you exactly who saw the commercial, if they came into your store and what they bought. Then we can text that person a few weeks later when we know they smoked it all and invite them back again. The whole time spending an amount that doesn’t take away from profit.
At Supper, we build custom dashboards for all of our clients, showing them exactly how their campaigns are performing and how the money they entrusted with us is performing for their business.
At this point in the world of digital marketing there’s no excuse for excluding ROI tracking on every spend. The big brands that jump into our market will know exactly how much their customers are worth, down to the penny. They’ll know how much every digital conversion costs. They’ll know how to attribute those conversions to the campaign that brought the user in. And they’ll be making a mint on all of it.
Just because big money is coming into the State doesn’t mean the brands who’ve been here since the beginning can’t compete. It does mean we’ll have to get smarter. All the same tactics are available to our Missouri brands.
All we have to do is make a plan.
Then execute it.
I’m Kyle Drenon. I lead the digital Department at Supper Co. We’re an advertising agency that specializes in Cannabis. We believe this new market segment is coming soon and will only further escalate when more states go rec. If your brand is looking for ways to communicate with this segment, let’s talk. We’d love to set a place for you at the table.