Marijuana Company

Part
01
of five
Part
01

Competitive Landscape - Canadian Medicinal Marijuana Companies

INTRODUCTION

The three largest medical marijuana companies based on market cap in Canada are Aurora, Aphria, and MedReleaf, and they have been chosen for a competitive analysis because of their similarity in size. Each offers cannabis oil and other cannabis products as detailed below, and each company ships products directly to consumers.

AURORA

Types of Products They Sell: Dried cannabis, cannabis oil, THC, CBD, Indica, Sativa, and Hybrid varieties

Location(s): Cremona, Alberta and Pointe-Claire, Quebec. Future flagship facility at the Edmonton International Airport set for completion by mid-2018.

How They Sell: Potential consumers first create an account, fill out an online application, consult their doctor and have him/her send in the prescription via mail or the online Patient Portal, and select products. They will be delivered to the consumer's mailing address by Purolator or Canada Post within 1-3 business days.

Sales Volume: Aurora's sales for the past six-month period ending December 31, 2017 equaled $19,949,000 CAD.

APHRIA

Types of Products They Sell: Indica, Sativa, Hybrid products; cannabis oil
Location(s): Leamington, Ontario and Toronto, Ontario

How They Sell: Patients can order online to have products directly shipped or they can order through partner dispensaries.

Sales Volume: Their revenue for the third quarter of 2017 equaled $5,118,516 CAD, and revenue for the fourth quarter of 2017 equaled 5,717,866 CAD. Kilogram equivalents sold for the third quarter of 2017 equaled 652.7 with an increase to 738.3 for the fourth quarter.

MEDRELEAF

Types of Products They Sell: dried cannabis oil, capsules

Location(s): Markham, Ontario

How They Sell: Their primary shipping method is Canada Post Xpresspost. Somebody over the age of eighteen must sign for delivery, and products can be shipped to a patient's home, doctor's office, or any Canada Post location. They also ship via Purolator for an additional charge.

Sales Volume: Their revenue for 2017 was $40,300,000 CAD, up from $19,300,000 CAD in 2016. Their volume sold in kilograms increased drastically from 2016-2017 as well, from 1,689 to 3,668.

CONCLUSION

Aurora, Aphria, and MedReleaf are three of the largest medical marijuana companies in Canada. Each sell a variety of medical marijuana products, including cannabis oils, and each operates primarily inside Canada. Furthermore, they have each experienced revenue growth in the past two years, suggesting that the medical marijuana field itself in Canada is rapidly growing.








Part
02
of five
Part
02

Competitive Landscape - US Medicinal/Recreational Marijuana Companies

The competitive analysis of four US medicinal/recreational marijuana companies is complete. The attached spreadsheet contains all details requested that include sales figures, operation details, locations, and products. The companies reviewed include Organa Labs, PharmaCannis, Chalice Farms, and Northwest Cannabis Solutions. Details about the research strategy and a brief summary of the findings are presented below.

RESEARCH STRATEGY

The US marijuana market is fragmented because there are states’ laws and federal laws that differ (i.e., marijuana is illegal on a federal level, but states are able to set their own standards in some regards and this conflict can create a judicial quagmire). Still, recreational use is legal in the following states: California, Colorado, District of Columbia, Maine, Nevada, Oregon, Rhode Island, Vermont, and Washington. Medical marijuana use is legal in a total of thirty states within the US. The following four states continue to designate marijuana as an illegal substance: Idaho, Kansas, Nebraska, and South Dakota.

I saw from your request notes that you wanted to avoid dispensaries in Canada, however, there was no such note for dispensaries in the US market but I wanted to avoid listing small dispensaries in case you did not want their data/info.

I also saw that there was a desire to identify at least one recreational seller and one medicinal seller. In order to identify a representative sample from the US marijuana industry of medical and recreational sellers, I looked for two recreational sellers and two medical sellers from four separate states. However, I quickly saw that the US marijuana market was not divided up so cleanly. This may be due to the judicial quagmire referenced above and the difficulties of obtaining proper licensure which may make market entry difficult for individual or smaller sellers. Likewise, the 10 largest cannabis companies in the US showed that six were Canadian (three have been supplied in a previous Wonder report); the four remaining were not quite right for this response (one was a technology firm, and three were biotech companies—these did not seem like what you were looking for).

As a result, I reviewed news reports and industry reports for cannabis growers in the US. I located Organa Labs, PharmaCannis (the only strictly medical cannabis provider in this analysis), Chalice Farms, and Northwest Cannabis Solutions through this strategy. These players were selected because they are large producers in the US for one or more states, and some have dispensaries in addition to growing fields. Please note that these companies do not differentiate between their recreational vs. medicinal sales (at least not in a way that they have published online). However, it was still possible to review the companies following the parameters set for this analysis.

A BRIEF NOTE ON THE U.S. MARIJUANA MARKET

Projections in the US market show that recreational marijuana use will increase dramatically over the next few years; then, it will somewhat level off, starting in 2021, with small increases in overall sales. Medicinal sales, however, are expected to continue to see noticeable growth through 2025.

Recreational use likely spikes and then levels off because a few states have legalized it for social use, and consumption in those states will likely grow to each state’s individual saturation point. Then, because states are slow to legalize it for social consumption, the sales from this category justifiably slow down. However, medicinal use continues to climb, outpacing the previous year’s growth by about $1 billion annually. This consistent growth pattern may be due to marijuana’s medicinal impact and there being room in the medical literature to further study and approve the drug’s use for various treatments. In other words, as more medical researchers study its use, there are more opportunities to exceed current use by engaging new patients and doctors with new treatment protocols.

Please note that New Frontier Data released the Cannabis Industry Annual Report on 2017’s legal marijuana outlook last year and Forbes, as well as Statista, have continued to use these numbers to post 2018 projections.

FINDINGS OVERVIEW

While all details of the competitive analysis are presented in the attached spreadsheet, an overview of the findings is presented, as well.

Organa Labs produces marijuana for recreational medical use, operates in 10 states and Jamaica, and had a revenue of approximately $100 million in 2016.

PharmaCannis produces marijuana for medicinal purposes only and sells its products in New York and Illinois.

Chalice Farms produces marijuana buds (flowers) and edibles. The company is headquartered in Portland, Oregon.

Northwest Cannabis Solutions produces medical and recreational use cannabis for Washington.

CONCLUSION

All details requested for the competitive analysis of the US medicinal/recreational marijuana industry have been compiled and provided within the attached spreadsheet.
Part
03
of five
Part
03

Overview: Medicinal Marijuana and Recreational Marijuana Different Approaches - US

Since both medicinal and recreational marijuana is regulated, traditional marketing methods such as newspapers, billboards, and television advertisements are not typically used. Instead, internet advertisements and social media platforms are key components used by dispensaries for marketing. While most dispensaries sell to both medicinal and recreational customers, the marketing styles differ between the two, with medicinal marketing tactics appearing more professional and fostering trust and recreational marketing tactics focusing on the social aspects of marijuana.

MARKETING MEDICINAL AND RECREATIONAL MARIJUANA TOGETHER VERSUS SEPARATELY

While medicinal and recreational marijuana can attract different types of customers, using different marketing techniques for different types of customers is important in fostering business growth and building customer relationships. In fact, marketing to both groups as a whole can actually hurt the marijuana industry by risking brand degradation, loss of credibility, disconnection with the customer base, and a loss of loyalty.

It is recommended to separate the marketing techniques based on the consumer base. This will improve customer retention, increase profit, and maximize market share. While some dispensaries were created with a sole focus on either medicinal marijuana or recreational marijuana, the stores can use their established brand to reach out to new consumers by creating product extensions that form logical yet distinct connections to the new consumer group.

This market bifurcation create closer connections between the dispensaries and the customers, provide enhanced opportunities for the brand, improve target compatibility, and result in better performance in marketing campaigns by using focused approaches to target specific customer groups.

Examples of this market bifurcation can be found on product labels. While recreational marijuana users typically prefer packaging that use visual stimulating colors and a more relaxed atmosphere, medicinal marijuana users prefer professional packaging that is more focused on health benefits.

Language on packaging labels can also be an important marketing strategy. While recreational users prefer labels utilizing "stoner" terms such as "weed" and "pot," medicinal users often want to stray from that stereotype and will often search for labels with more medical or professional terminology. Dispensaries aiming for more professional brands often remove themselves from the "stoner" terms altogether.

Regardless of the consumer focus, brand marketing is extremely important in the marijuana marketing field. Forming a trusted, professional, well recognized brand throughout the dispensaries, advertisements, and social media platforms will ensure the customer's trust and business. Customer awareness of both print and online campaigns and any award-winning products are also great marketing techniques.

MEDICINAL MARIJUANA MARKETING TECHNIQUES

Medicinal marijuana users are more focused on finding products that can treat or help their condition and improve their quality of life. They are typically loyal to a specific product and more connected with a dispensary's staff. They focus on quality, consistency, and the non-psychoactive effects of marijuana. Marketing techniques focusing on compassion and healing are the most effective for medicinal marijuana customers.

Many doctors and dispensaries selling medicinal marijuana use experimental, holistic approaches, as traditional marketing methods do not work as well on medical marijuana customers. They do this by making the dispensaries easy to find through such websites as MarijuanaDoctors.com, which is used by patients to find dispensaries near them. This website also allows patients to find doctors who can prescribe medicinal marijuana to them, as well as providing ratings and reviews for doctors and dispensaries in the area. Leafly is another website and app that customers use to find dispensaries in their area.

Word of mouth is also an exceptional marketing tool in the medicinal marijuana field. Dispensaries that have a professional, knowledgeable, and respectful staff help the dispensary establish and maintain credibility and professional integrity. This is a great marketing technique, as the customer will learn to trust the dispensary, which will likely result in the customer spreading the word about that specific dispensary and its professionalism. Since trust and professionalism are vastly more important to medicinal users than recreational users, this technique is largely beneficial to medicinal customers.

RECREATIONAL MARIJUANA MARKETING TECHNIQUES

Recreational marijuana customers, on the other hand, are more concerned with the psychoactive effects of marijuana. They are more willing to experiment with different brands and strains, and they are more open to trying new products. They are often more concerned with pricing than loyalty. Marketing techniques emphasizing the social aspects of marijuana use are the most effective on recreational users.

ONLINE MARKETING — MEDICINAL AND RECREATION MARIJUANA

Since marijuana is a controlled substance, conventional advertising techniques like newspaper advertisements, billboards, television advertisements, and storefront displays are very tightly controlled, which often leads to much of a dispensary's marketing being focused on the internet.

Developing an online presence is critical to the marijuana marketing field. Having a well-developed website that practices proper search engine optimization strategies can result in high rankings in search engine results, which can lead to more customers. Utilizing keywords and key phrases, networking, and social media engagement are also great marketing tactics to bring in new customers.

As blogs are becoming more popular in recent years, additional marketing tactics rely on managing and frequently updating blogs that provide information and interesting posts on marijuana (medicinal and recreational), doctors, and dispensaries.

Though online marketing techniques are the most popular among dispensaries, conventional techniques are occasionally used as well. Los Angeles recently launched an advertising campaign for MedMen that includes billboards posted around the city. However, the ads refrain from using any marijuana paraphernalia. Instead of "buds, blunts, or bongs," they focus on close-ups of calm faces with phrases like "Relax. It's legal," and "Heal. It's legal." The focus is less on marijuana and more on the consumer's health.

PACKAGING — MEDICINAL AND RECREATION MARIJUANA

Packaging is incredibly useful marketing technique used for marijuana. As the package is the first thing the customer sees when browsing for products, it is important to use professional, informative, and aesthetically pleasing labels.

Packaging should also be light-resistant and child-resistant. It is recommended that the packaging designs should only appeal to adults, as marijuana is a product for adults. This generally means no cartoon characters or bright color palettes should be on the packaging.

Information on the packaging should focus on the most useful content to help the customer know exactly what the product is, what it can be used for, and how to properly use the product. The name of the marijuana strain, the recommended dosages, warnings, and expiration dates should also be included. It is also recommended to list the percentages of THC, CBD, and other ingredients found in marijuana on the labels.

CONCLUSION

To conclude, marijuana marketing tactics differ depending on the target audience. Medicinal marijuana marketing tactics focus on professionalism, trust, and informative labels. Recreational marijuana marketing tactics focus on visual stimulation, social aspects of marijuana, and "stoner" terms. Though many dispensaries cater to both groups of consumers, marketing tactics should differ to avoid brand degradation and loss of customer loyalty and connection.
Part
04
of five
Part
04

Communications from Key Players: Medicinal Marijuana in Canada

Aurora, Aphria, and MedReleaf, the three key players in medicinal marijuana in Canada, communicate with customers and investors through the use of social media, company websites, and press releases as a means to promote their companies, engage with customers, and provide information on medicinal marijuana.

It is not currently legal to develop and share direct advertisements for medicinal cannabis in Canada. Canadian cannabis producers are lobbying for looser rules when it comes to promoting cannabis for public consumption; however, at this time they are limited to indirect media outlets.

An overview of communications by key players is presented below.

AURORA

OVERVIEW
Aurora gears its communications towards young people, actively promoting the concept of wellness on its blog and Twitter while reserving press releases for communicating business and industry information. While the company also uses Facebook and Instagram to communicate with the public, Facebook is used primarily to cross-post between other platforms and Instagram is rarely used.

SOCIAL MEDIA
Aurora is the only company that features customer communications and retweets on its Twitter feed. Its tweets feature polls, customer support, Q&As, links to other social media the company uses, tips, and holiday announcements such as International Women's Day and Pink Shirt Day. It also tweets information on its B2B service and pins these tweets to the top of the feed, marking them as those of the highest importance. While Aurora also uses Instagram, at the time of research its feed contained only 10 posts, and 2 of these posts focused on the fight for looser legislation regarding the promotion of cannabis in Canada. Finally, Aurora uses Facebook to cross-post between its other social media platforms. Posts focus on community engagement through questions, contests, and events as well as medical and legal usage information.

BLOG
Aurora's blog has a wellness theme, and contains informational articles, tips, lists, and guides. The most shared articles include: Antioxidant Rich Foods, Contest Rules, Women in Cannabis, and How Our Sedentary Lives are Killing Us.

COMPANY WEBSITE
Aurora uses the Frequently Asked Questions page of its company website as a means to communicate primarily with the public. It presents information about medicinal marijuana, Canadian laws, usage registration, products, pricing, and insurance.

PRESS RELEASES
Aurora's press releases are business- and investor- oriented and offer information regarding the company's activities and developments within the medicinal marijuana industry. Press releases focus on leadership and financials and include topics such as acquisitions and investments, employee appointments, licensing, awards, and program updates.

Aphria

OVERVIEW
Aphria's communications extend beyond the Canadian market, presenting information on the global market as well as the science behind what they do. The company actively uses social media as a means of communication; however, its extensive cross-posting causes the feeds to be uniform and redundant across platforms. While some business information is posted on social media, most is communicated via press release.

SOCIAL MEDIA
Canadian Aphria's Facebook page includes posts on contests, hiring announcements, holiday celebrations, and videos about company developments such as the construction of a greenhouse. The company also uses Facebook to share sourced posts such as third-party articles about cannabis. While Aphria's Twitter feed is nearly identical to its Facebook page, Aphria does not feature retweets or communications with customers. At the time of research, Aphria's Instagram feed contained 64 posts. While a majority of these posts are cross-posted across Facebook, Twitter, and the company's website, Aphria uses Instagram in particular to promote medicinal marijuana, provide usage information, and highlight company staff and awards. Overall, Instagram is the most diverse and unique of Aphria's social media platforms.

BLOG
The blog for Aphria's Canadian branch presents information geared to the general public. It includes articles, contests, recipes, tips, FAQs, and how-to's.

COMPANY WEBSITE
Aphria's website communicates "the Aphria Advantage" and is Aphria's form of communication that most closely resembles a direct advertisement. The company highlights its value proposition and explains why it is the leading producer of medicinal marijuana. Order and registration information, clinic locations, and FAQs are also featured.

PRESS RELEASES
Similar to Aurora, Aphria orients its press releases toward industry professionals and investors. They focus primarily on acquisitions, financials, and company leadership.

MedReleaf

OVERVIEW
While MedReleaf is the only key player without an Instagram account or blog, it is the only one that has a LinkedIn page, which suggests an attempt to appeal to an older, more professional consumer base. Overall, MedReleaf is more focused on the business aspects of the company and less on "fun" things such as quizzes and contests. Communications are more text-heavy than those of Aurora and Aphria, which feature more images and videos.

SOCIAL MEDIA
MedReleaf uses LinkedIn to display financials and leadership news and cross-post this information to other social media platforms, garnering nearly 4000 LinkedIn followers. The company uses Twitter primarily to promote products and offer pricing. Its top pinned tweet presents the awards the company has won as well as information about company leadership. MedReleaf's Facebook page is almost identical to its Twitter feed and is used to promote products, pricing, and patient discount programs.

BLOG
MedReleaf does not have a blog.

COMPANY WEBSITE
Similar to Aphria, MedReleaf uses its website to communicate "the MedReleaf Advantage." However, the copy presented is even more closely related to an advertisement. It states that MedReleaf "sets the Medical Grade Standard™ for cannabis," is "[t]he first and only ISO 9001 certified cannabis producer in North America," and "delivers a variety of premium products to patients seeking safe, consistent and effective medical cannabis." The website also communicates six distinguishing features of MedReleaf and information on how to become a patient.

PRESS RELEASES
Like its competitors, MedReleaf Canada uses press releases to highlight financials and company leadership. The information presented is very similar to that communicated via LinkedIn.

POTENTIAL FUTURE COMMUNICATIONS

Cannabis producers in Canada continue to lobby for less strict rules regarding the promotion of public cannabis consumption. According to Cam Battley, executive vice-president of Aurora, "There is ample evidence to show that marijuana is a more benign substance than alcohol. We believe there’ll be a substitution effect on alcohol by cannabis products. That’s why there’s no need to do anything different when it comes to advertising. As the sixteen producers engaged in lobbying control more than 90 percent of the legal medicinal marijuana market in Canada, it is possible that continued pressure will lead to looser communications regulations, allowing producers to mimic alcohol companies in their campaigns. However, weed analysts such as Vahan Ajamian at Beacon Securities are not hopeful. According to Ajamian, “Unless it’s a [Liquor Control Board of Ontario]-type model where the government owns the distributor, it is likely that they will continue leaning towards a tobacco-type model. The last thing the government wants is to be deemed as irresponsible in this legalization process.”

CONCLUSION

The primary channels of communications from the key players in medicinal marijuana in Canada (Aurora, Aphria, and MedReleaf) are social media, blogs, company websites, and press releases. Communications vary by company; while Aurora and Aphria focus on social media posts to attract a younger clientele through community engagement and information on products and usage, MedReleaf focuses on company leadership, business information, and scientific research via LinkedIn and press releases to communicate with an older, more professional demographic. While producers and proponents of medicinal marijuana usage continue to advocate for looser government regulations regarding the direct advertisement of medicinal marijuana, analysts do not anticipate government cooperation in the near future. Unless guidelines change, medicinal marijuana producers will continue to be limited, forced to focus on social media and company websites rather than direct print, TV, and digital communications campaigns.
Part
05
of five
Part
05

Communications from Key Players: Medicinal Marijuana in the US

Organa Labs, PharmaCannis, Chalice Farms, and Northwest Cannabis Solutions have done very little in the way of communication or advertising. A few of these companies have a minimal social media presence, though they appear to have done little in the way of display advertising. Also, while several companies offer a blog or news section at their websites, those provide minimal information or include only dated stories. The limited amount of advertising is likely due to the restrictions placed on marijuana advertising.

Building on our previous research, which compiled a competitive landscape for the US medicinal marijuana industry, I've researched each company identified in terms of their communications or advertising efforts. For each company, I've consulted their websites and social media channels, as well as websites and advertising data tracking sources such as SimilarWeb, Thalamus, and BuiltWith.

While communication examples were quite scarce and dated, I have highlighted a few examples of blog posts or videos for each company.

CHALICE FARMS

Chalice Farms appears to have done the most among the four companies analyzed in terms of communications. They have Twitter, Vimeo, YouTube, and Instagram accounts. Their Vimeo page is not very active, showing only two posts. Their YouTube page has one entry from two years ago. The Chalice Farms Instagram account has 909 posts and 16.1k followers. They have 2,028 Twitter followers and have 1,899 Tweets, the most recent of which is from this month (March 2018), so their Twitter account seems fairly active.

The Chalice Farms blog is a bit more active, though their most recent post is from August 2017. It is a post on how to recognize cannabis as medicine in Oregon. Another article is about the legality but lack of availability of cannabis in Las Vegas. Its blog offers industry news, as well as giveaways and promotional offers, such as discounts. The company also provides the option to sign up for their email newsletter, which offers "exclusive access to discounts, giveaways, concert tickets and more!!!"

According to SimilarWeb, which tracks website traffic, 56.94% of Chalice Farm's website traffic comes from organic searches, while 22.48% of visitors go directly to the site. Another 12% of traffic comes from referral sites, and 8.59% from mail. The BuiltWith database, which tracks the back-end tools used by websites, indicates that Chalice Farms uses Yahoo Small Business advertising, and they use Trade Desk to manage online media buys.

NORTHWEST CANNABIS SOLUTIONS

The Northwest Cannabis Solutions (NCS) website is quite minimal, offering a single page with a brief company overview, retail locations, job openings, and contact information. I found no online advertising from NCS, which is backed up by the SimilarWeb results, which indicate that 75.70% of their website traffics comes from organic searches, while 18.86% of visitors come directly to the website. Another 5.45% of traffic comes from their social media channels, but 0% of traffic comes from mail, referral sites, or display ads. BuiltWish indicates that NCS uses the Mantis online ad network, which focuses on "cannabis, yoga, music, wellness, and other real life content" for a Millennial audience. Despite their use of this platform, I was unable to find any online advertising for NCS.

In terms of social media, Northwest Cannabis Solutions has a YouTube channel with 1,292 subscribers, but most videos appear to be at least 9 months old. Their Instagram account has 136 posts with 7,978 followers. Their Facebook page appears to be inactive. They offer a series of videos on recreational pot shops and instructional videos, like "how to make an apple pipe."

PHARMACANNIS

PharmaCannis has a blog that offers quite a bit of information, but its content is dated. It was most active in 2016, but only shows one post in 2017 and none for 2018. The most recent article is about their expanded hours at its New York locations, preceded by an article about gun ownership by a medical marijuana patient. However, upcoming events are listed for 2018. They offer an email newsletter with "updates regarding new products being offered in our dispensaries, upcoming events and PharmaCannis related news!"

BuiltWith shows no back-end advertising platforms used by Pharma Cannis. SimilarWeb indicates that PharmaCannis' website traffics comprises 66.39% organic search, 28.67% direct website visits, 4.60% referrals, and 0.34% social media referrals. They show no results for mail or display ads.

PharmaCannis' social media presence is fairly minimal. They have 8,373 Facebook followers, but the last post was in December 2017. Their Twitter page has 978 followers with the last post appearing in April 2017. PharmaCannis Google+ page only has 48 followers and is not very active, mostly containing cross posts from Facebook. Their YouTube page offers only three videos.

ORGANA LABS

Organa Labs offers the least amount of communication among the four companies analyzed. Their website offers an email sign up option to receive news and updates. The Organa Labs' "news and blog" page has only two articles. Those two articles focus on the "benefits of vaporizing cannabis" and explanation of CO2 extraction.

The lack of communication efforts on the part of Organa Labs may be due to the fact that it is considered the largest consumer cannabis company in the world. SimilarWeb results for Organa Labs indicate that 56.16% of their website traffics comes from direct visits with another 43.84% coming from organic searches. These statistics may indicate that the company is well-known enough that it does not need to rely on advertising or other communications, as visitors are coming directly to the website or easily finding it in their search results. For instance, none of their website traffic is generated from referral sites, social media, mail, or display ads. Also, BuiltWith shows only DoubleClick under advertising platforms used by Organa Labs.

While Organa Labs offers a few social media channels, they do not link to these channels from their website. Their Twitter account has 391 followers and 199 posts. The Organa Labs Facebook page is virtually inactive, having offered its last post in 2013.

CONCLUSION

In conclusion, Chalice Farms is doing the most in terms of communications and advertising among the companies analyzed. They use their blog, an email newsletter, and social media channels to communicate about their products. Northwest Cannabis Solutions offers a very minimal website and a limited social media presence. PharmaCannis has a blog that was quite active at one time but has dwindled in its offerings, and Organa Labs does very little in the way of communications or advertising, which may because of their dominance in the market.
Sources
Sources

From Part 05