Hitting the retail (online) shops this month for recreational users, the marketing of marijuana is taking form, but the wheels have been in motion for the past year, with licenced providers working overtime to ensure they not only have a top quality product to enter into the marketplace, but that they also have enough to sustain the onslaught of orders that are going to light up Canada Post come October 17th.
We sat down with Ray Gracewood, Chief Commercial Officer at Organigram and Kevin Chen, CEO and Co-founder and at Hyasynth Biologicals Inc. about how science is defining the cannabis industry, and how legalization is going to look, province to province.
Libby Roach– What is cellular agriculture in layman’s terms? Can you expand on how science is changing the landscape of the cannabis marketplace?
Ray Gracewood & Kevin Chan– Cellular agriculture is a term that came from several companies developing new ways to produce agricultural products using cells instead of their natural source. Some examples include companies working on producing meat using cultivated animal cells, or people using algae to make omega-3s or other nutritional products using algae instead of plant or animal extracts (i.e. fish oil). In all of these cases, cell cultures and fermentation start out as more expensive, but cells’ processes can be engineered to become exponentially more efficient over time, which is usually not possible in plant or animal agriculture.
For example, we aren’t suddenly going to start seeing cows, wheat or cannabis that suddenly grows 10x bigger and 10x faster. We might see incremental improvements like 10%, 20% or 50% better, but not 1,000% better. Realistically and technically, it’s hard to imagine that cows could one day be the same size as elephants. Cell cultures and fermentation can be engineered to make products faster, more environmentally friendly and more ethically if you consider the situation with the meat industry. This is part of what cellular agriculture is all about.
Science, healthcare and consumer interest in the scientific aspects of the cannabis industry are all going to change how this market looks. At the moment, most of the cannabis industry doesn’t have the same regulation, precision or consistency as healthcare or even many food products. Consumers of all kinds and also regulators care about exactly what is going into their products and how they’re made.
Technologies like fermentation and cellular agriculture are commonly found in food and in pharmaceutical production. Science is going to make this industry more like what already exists in every other industry, where every combination of any active ingredient is possible, and each combination of active ingredients is specifically designed for a desired effect or treatment, and every ingredient is made without any questions in quality, contaminants, or shelf-life.
LR– Post legalization, how do you envision the Canadian marketplace? Each province has its own set of rules, how do you envision the progression from medicinal marijuana to the everyday consumer? Is there consideration for branding geared towards each province?
RG & KC-The first caution is to ensure we’re all clear that the development of the Canadian cannabis marketplace will be a marathon, and not a sprint. It will evolve over time, will likely grow slowly as the illicit market finds new and innovative ways to compete, but it will be seen as the safer, more legitimate and reputable channel to purchase cannabis. As we look into the future of product development, the addition of infused and extract products such as edibles and vape pens will provide incredible opportunities for the legal market to compete considering they’re readily available today in illegal forms. From a provincial perspective, there are some differences from a retail or commercial perspective, but the products and brands that appear from province to province will be very similar. From a brand strategy perspective, there may be brands rooted in geography, but the proliferation of local brands will likely only start to appear farther down the road as the number of producers and available capacity meets demand.
For Hyasynth in particular, the progression of the market is towards becoming more similar to markets in agriculture, food, beverage and pharmaceuticals. A lot of companies that traditionally work in these areas will move into cannabis-related products in the next few years. For an everyday consumer, medical cannabis will become more normalized, like a prescription medicine. It will also become more effective at treating specific conditions, whereas right now medical users are left to their own exploration to find something that works. The same concept of normalization will happen in branding as well. There will be specially designed products and brands for specific demographics, similar to what we already see on the shelves of any grocery store or pharmacy.
LR– Cannabis is being marketed from everything to the Netflix n’ Chill couch surfers to those looking to focus and make gains in fitness and running. Including its reported effects on helping with a myriad illnesses from epilepsy to cancer, is cannabis the cure-all drug we’ve all been waiting for?
RG & KC– From a scientific standpoint, cannabis is a combination of tens or even hundreds of different ingredients, and it’s more of a category of products than a single “cure-all” drug. This category of products is already showing a lot of benefit for symptom management and reducing the impact of certain diseases.
While certainly not a cure-all, with advancements in research and increased acceptance within the physician community we’ve seen incredible strides in support for cannabis as a third- and fourth-line treatment option for several illnesses, as well as broad support for cannabinoids, specifically CBD as an appropriate part of an active wellness routine.
LR– I’m curious to know how the product is going to be packaged and marketed. How important is packaging and branding to your line of products?
RG & KC– The regulatory environment for cannabis in Canada is very strict and prescriptive, so labeling at retail will unfortunately look very consistent from brand to brand. At Organigram, we’re very focused on building brands and understanding how they transcend packaging & focus more on tone, feel, story and positioning. Brands transcend how they appear at retail, and we understand how critically important it is to invest in having a deep and engaging brand strategy. We’ve invested in packaging forms that meet strict regulations, but future focus will be in innovating those forms based on in-market research and consumer preference. It’s truly an interesting time to be a marketer in this industry – we have the opportunity to define what a cannabis brand should be, and dictate how Canadians engage with it.
From Hyasynth’s perspective, we have a few different plans in packaging and marketing, but for now we’re mostly looking to rely on partners to focus on branding and marketing, while we provide ingredients. There are tons of companies already in Cannabis, and even more that are thinking about moving into the space which already have really great brands, and great products that already have huge amounts of traction. In many other industries, the companies that work on the products and brands rely on external suppliers and manufacturers to simply make the product.
LR– The industry seems to have shed its stoner persona overnight. What is your target market and how do you plan on engaging with them?
RG & KC-It’s an overstatement to say that we’ve completely shed the stigma. We’re certainly well on our way, but there is still work to be done to ensure cannabis gets the respect it deserves and brand development can play a key role in that process. In the case of the Edison Cannabis Co., which is Organigram’s premium brand in the adult recreational market, the brand pillars are quality, innovation, creativity and sophistication. These pillars combined with a clearly defined target market allows us to start building our brand tone and imagery, as well as how we work with front-line retail staff to identify an Edison consumer, and how to engage, captivate and educate. In a world with limited marketing options due to regulations, it also forces us to be creative within the rules and work hard to develop loyalty within that target consumer group.
From Hyasynth’s perspective, we’re looking for all the companies and people who have successful businesses that could be in cannabis or not at all, who are interested in expanding into the cannabis industry. Our main goal is to help them create new products, expand worldwide, scale to serving over a million or even 10 million customers, and to do that in a way that meshes with their current way of doing business, and that doesn’t require a major investment in time or money.