EXCLUSIVE: Emotional Connection With Consumers Is Secret Sauce For Any Brand To Prosper, It's Same With Cannabis, Experts Say

"Brands emotionally connect with consumers… in order for your brand to resonate, you have to emotionally connect with the consumer." That’s according to Richie Proud, CEO and director at iAnthus Capital Holdings Inc ITHUF.

He told the crowd gathered last week at the Benzinga Cannabis Capital Conference in Chicago that understanding how cannabis products meet consumers’ needs — like aiding sleep or appetite — is crucial for a cannabis brand’s success. Instead of focusing on pricing and potency, the focus should be on clearly articulating the benefits of cannabis products.

"There are certain ways that the cannabis plant will be able to benefit you and that’s the in-state of that product and we’re learning how to balance all of these kind of conversations together," Proud explained.

Proud, alongside three other industry experts, joined the panel moderated by Tim Seymour, portfolio manager of the $CNBS Amplify Seymour Cannabis ETF CNBS, to discuss how retail prowess translates to wholesale success through streamlined operations. Jon Levine, CEO of MariMed Inc MRMD, Sandy Li, CFO of Wana Brands and Jamie Mendola, chief business development officer of GM of the western region at Ayr Wellness Inc AYR AYRWF were also on the panel.

Read Also: EXCLUSIVE: Tracking Every Cannabis Deal Is ‘A Lot Of Fun,’ Says Financial Expert Behind Essential Investor Tool

The Customer Is Always Right

Proud said balancing the interests of cannabis connoisseurs with attracting new customers is challenging suggesting that fostering emotional connections can help bridge this gap and enhance both consumer acquisition and retention.

From a retail-centric perspective, the cannabis market requires agility and responsiveness to consumer needs, as brands transition into wellness and lifestyle segments, said Proud who runs a company with forty retail locations nationwide and a substantial cannabis cultivation and processing footprint.

In wholesale, however, it's important to balance the needs of both end consumers and retail partners." Proud said. "Not only do you have customers who are visiting your competitor’s dispensaries and seeking out your brands, but you have that other business as a customer of yours and you have to service their business needs."

The future of cannabis retail depends on financial planning, merchandising, and creating a forward-facing, modern shopping experience.

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Wana's Li agreed. The company she is working for puts an emphasis on education on brand management, operations, working capital, cash flow and talent acquisition when it comes to collaboration with its partners.

Li said there are challenges in the cannabis wholesale market, particularly the lack of customer data compared to traditional retail. However, a key to effectively targeting markets is understanding consumer behavior.

MariMed’s Levine seconded Li. It's important to deliver products that resonate with consumers and meet their needs, while working on clear brand identity and purpose. "it’s all about giving the consumer what they want," and understanding customer needs in both retail and wholesale cannabis markets, he said.

Key To Attracting Customers

Overall, the goal is to build customer confidence through quality and reliability, Levine continued, by providing consistency in the product’s dosage, flavor and effects. "When they buy that 10 milligrams, they know they’re getting 10 milligrams.. if they cut it in half, they’re getting five," Levine said.

However, educating customers on cannabis is not always an easy job as marketing of products is subject to regulatory restrictions that vary by state.  

Enter budtenders. They can improve consumer knowledge and comfort, ultimately driving better engagement with the products offered. "Budtenders are absolutely the number one sales for us on the floor," Levine said.

Mendola said budtenders play a crucial role in sales, influencing 75% of transactions, which highlights the importance of their insights and marketing efforts.

"We’re definitely seeing a growth in the sophistication of the questions that they [consumers]are asking," he said.

The industry is gradually shifting towards a more effect-based understanding of cannabis, Mendola continued. There is a growing interest in topics like terpene profiles and minor cannabinoids among consumers, even though many consumers still focus heavily on THC when buying cannabis flower.

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Image: Wendy Davis