Global Branding & Expansion for Cannabis Businesses
The cannabis industry in the United States gets stronger with every state that legalizes. However, this political dance of legalization state-by-state is slowing us down in the global marketplace.
Abroad, the cannabis market is booming with the support of government. This is a great time for U.S. cannabis businesses to position their brands to succeed overseas.
Experience in the Global Market.
MJ Freeway signed our first international client in Canada in 2011. We were a young company at the time. Our initial excitement quickly wore off when we realized international development comes with a whole new set of administrative challenges. We chose to think long-term and conquer those challenges because we knew the opportunity for growth was there.
Since 2012, our products have been localized into other languages to serve the available international cannabis markets, and we have focused on hiring bilingual employees into each area of the company.
Today, our early focus on operating as an international business and continuing to invest in that future concept has proven successful as we currently operate in 11 countries.
One myth U.S. cannabis businesses have is they believe they are too small to think globally. We are a small company to operate in more than 10 countries. However, the opportunity in emerging markets and the unique market conditions in the cannabis industry make it possible.
The legal cannabis industry is so young, it has missed a century of technological and agricultural innovation. But that doesn’t mean we don’t have a lot to offer the world. Companies who have their 10,000 hours of experience over nearly 10 years, like ours, have hard-won, cannabis-specific knowledge and experience which offers more value than it costs to new governments and operators looking to enter the industry.
If you are clear about the value you bring to the market, you’ll be able to position yourself well in any country where there’s a demand for your product.
Always think ahead.
Early in my career, I read the famous Jim Collins book, “Good to Great”, and despite having read hundreds of other business books since, I keep coming back to some of the core concepts in “Good to Great”. “Good to Great” has received plenty of criticism, however, I continue to come back to the concepts because it was based on 5 years of analytical research into companies over 15 years of their business life. Most other business books are based on one person’s anecdotal experience.
There is a core concept in “Good to Great” called “Put your best people on your biggest opportunities, not your biggest problems.” The example from the analysts’ research used to illustrate this concept is the international expansion of the Marlboro brand. I know tobacco is one of the biggest industries that lobbies against cannabis, but please consider this case study from just the brand expansion perspective.
In the 1960s, both Philip Morris, better known as Marlboro and RJ Rennolds, better known as Camel, derived the majority of their revenues from domestic sales. Joe Cullman at Philip Morris identified the international market as the single best opportunity for long-term growth, despite the fact the company only derived 1% of its earnings from overseas. He moved his number one performing executive George Weissman from domestic business to international business. Weissman went from running 99% of the company to only 1%, and many saw the decision as a demotion. The decision was in fact a stroke of genius, and Weismann turned out to be the best person for the job of developing European markets.
Under Weissman, Marlboro became the number one best-selling cigarette in the world three years before it became number one in the United States. I think of this story often as we make decisions to expand internationally. Because why was Weissman able to build the Marlboro brand so well in international markets?
There’s a lot we as an industry can learn from the answer to this question.
The first reason is because the brand itself was so cohesive and defined, and he and his team learned how to adapt one of the most valuable brands in the world to appeal to international consumers. They sold a consumable product with the brand of “the American West” or “the American Dream.”
Next, the company also had a high degree of standardization in their products. This enabled them to offer a consistent product not often found in other brands at the time of their expansion. So many of these same concepts are adaptable to cannabis businesses interested in expanding internationally. It’s even a bit cliché, but clichés are generally based on evidence.
Brand and consistency will enable success.
The importance of brand identity.
When we originally chose the name MJ Freeway and launched our brand, it was with the intent to convey images of speed and connection within the marijuana industry. At the time, choosing to include MJ in our name was controversial, and many advisors strongly urged us to change it. We stood our ground and were clear that we would stand with and for the cannabis industry. That choice has made our name synonymous with cannabis.
With our generation 2 seed-to-sale product, MJ Platform, our brand intention is to take the connection concept further. We are the Platform that connects the marijuana industry. We built the product to support the brand concept of collaboration within the industry. Now more than ever, we are focusing on making strategic connections and integrating with strategic partners offering additional valuable technology to our industry. To make it easy for partners to work with us, last year, we launched a partner developer’s console and MJP app store. Today, we have dozens of integrated offerings on MJ Platform with many more to come. We provide the Platform or space in which the industry operates. This allows our clients to focus on building their brands and running their businesses. They know they have the business tools and reporting needed to make smart business decisions in order to advance their products and brands.
Take a few minutes to think about your brand identity. What is the foundational idea that your brand conveys in the industry?
This is important. Once you’re clear on this idea, you can ensure decisions you make about how to represent your company or what products and services you sell align with this idea. Alignment will help you deliver this idea as a real value to the marketplace.
Why collaboration matters in global markets.
This spirit of partnership is a cornerstone of MJ Freeway’s business philosophy. We began serving clients in Spain in 2013, but we weren’t growing market share there. I knew we needed to partner with someone local and intimately familiar with the country’s market nuances.
Initially, I explored partnering with one of our existing clients, but they had a challenging relationship with other operators. I then explored partnership opportunities with other software providers currently operating in Spain and found our now channel partner. We acquired their revenue stream in 2015 and they now provide local presence, local account development and management, and local support to our clients in Europe. I consider them to be invaluable partners today. This working partnership today would have never been possible if I had only viewed them through the lens of antagonistic competition. I think it’s important if you’re an operator looking to expand internationally, you ask yourself, with whom can I partner? How can I offer my years of experience and expertise in cannabis but not assume I know their country, consumers, market demands, or brand interests better than they do?
The ROI on any new emerging market, especially in SaaS, and doubly so in cannabis, tends to be a year or more down the line. But the opportunity to gain market share will never be greater than when a market is newly emerging. Cannabis globalization is already here and will only expand. If you’re currently considering expanding into international markets, I would encourage you to try a test case.
How to test a new market.
Here are the steps you can take to get ready for global expansion:
1. Get clear on what you offer and the value it brings to the marketplace in general, not just your local jurisdiction.
2. Pick one emerging market where the product-market fit makes a compelling case for your business offering.
3. Consider how your brand has unique appeal in this market.
4. Learn about some of the challenges of operating in this new market and how you can overcome them.
5. Work to ensure your product is consistent so consumers know what they are buying and can build loyalty.
That’s it. I know it sounds simple, but these five steps can get you started on building a global brand. The opportunity is here now. Don’t miss it waiting to be ready.
I am excited about the possibilities of the U.S. market, but I also feel hindered by our political sluggishness regarding real regulation. While we continue to serve the amazing cannabis businesses and consumers in the U.S., we can’t afford to neglect the opportunities internationally. And neither can you.