For years in Colorado, the thought has been that pot will sell itself. Now that it’s legal, marijuana businesses are realizing they’ll need to carve out niches and reach out to new buyers to survive in a very competitive marketplace.
Close to 200 recreational marijuana stores have opened their doors since pot became legal at the start of 2014. With that many outlets to serve the customer, marketing experts, like UC-Boulder Leeds School of Business professor Margaret Campbell, say the move into more specialized marketing is just part of growing up.
“I think we’re really going to see a maturation of the industry to positioning and differentiating in order to create market demand,” Campbell said.
That means you can expect to see stores beginning to cater to different audiences. One for the yoga mat-toting young woman. One for the aging, nostalgic Baby Boomer. One for the high-end ski tourist.
From the outside, The Farm in Boulder, Colo. just feels welcoming. Owner Jan Cole’s shop has big glass windows to let in natural light. The walls are painted in soothing earth tones. Big blackboards list different marijuana strains in colorful chalk.
“I like to think of it as warm, and inviting. And a lot of wood. It’s kind of apothecary style,” Cole said.
She used her background in spa management to build a marijuana shop that puts customers at ease. In fact, the store’s name, The Farm, is so inconspicuous that confused would-be customers have been known to wander in looking for different merchandise.
“We have a lot of people who come in think that we might be an organic food grocer or something,” Cole said, until the patrons realize their mistake upon seeing glass display cases filled with bongs.
That’s exactly the crowd Cole is trying to attract. The kale-munching, socially-conscious, natural food-eating crowd, and specifically women. The Farm advertises its cannabis as pesticide-free, organic and, of course, locally grown.
“I don’t think we’ll ever be as big as Whole Foods, but Whole Foods is a good example of the type of clientele that we attract,” Cole said.
It’s her attempt to stand apart from the crowd. As the market becomes more and more saturated, everyone will be looking for an edge.
Enter the women behind Cannabrand, a Denver-based boutique marketing agency that is specializing in marijuana. The name is a portmanteau of cannabis and branding. Business partners Jennifer DeFalco and Olivia Mannix are banking on Colorado’s marijuana industry becoming big business, and in need of flashy logos, memorable catchphrases and eye-catching ads.
“Cannabis is here to stay. It’s not going anywhere,” DeFalco said. “The industry is just beginning.”
Because it’s so new, DeFalco said most people who’ve popped into a recreational pot shop are the first adopters, those who’ve tried marijuana before. The whole point of marketing is to grow a business, and reach people who might never have thought to buy a product. The potential market is huge. A recent poll showed [.pdf] a majority of Coloradans think the drug should be legal, but less than ten percent actually use cannabis.
“So part of the rebranding of cannabis is really just making the dispensaries more inviting and more welcoming,” DeFalco said.
When it comes to marijuana advertising in Colorado, it’s not as simple as buying an ad on TV or the radio. Agencies like CannaBrand will find their options limited to get their message out.
State rules forbid shops from advertising on media where more than 30 percent of the intended audience is older than 21. The state wants to keep impressionable kids away from marijuana advertising. A legislative panel is currently mulling new requirements for marijuana edibles manufacturers that could keep them from producing candies and gummies that appeal to children.
Because the industry is so new, and its rules freshly inked, businesses will begin to test their limits in advertising to see what they can get away with, said marketing professor Margaret Campbell. To reach new markets, the industry as a whole will need to strip away the stigma that still surrounds the marijuana user.
“They’re going to try to increase usage,” Campbell said. “They’re going to try to go beyond their quote-unquote stoner user to expand and have it be acceptable at cocktail parties.”
As luck would have it, you can find those cocktail parties right now.
At a gallery in Denver’s arts district, women in cocktail dresses mingle with men in neckties. Servers weave through the crowd with trays of fancy hors d'oeuvres. In the corner, a well-dressed young woman is demonstrating how to roll marijuana in a cigar wrapper.
The event’s host, Amy Dannemiller, who goes by the pseudonym Jane West, is attempting to build a business around removing the stoner stigma by throwing upscale parties with 95 dollar cover charges.
“It’s just basically a big social event where everyone can enjoy cannabis like they would a glass of wine,” Dannemiller said.
But even the party’s attendees disagree that, culturally, marijuana isn't yet the same as a glass of wine. Employers can still drug test their workers, putting the drug’s user in a tricky legal situation.
“That’s the big hurdle,” said a female partygoer who asked not to be identified. “People can’t be associated with it. Like everyone does it, but they can’t tell anyone about it.”
It’s that larger legal hurdle that’ll take a lot more than advertising and branding to overcome.
