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THINK FRANCHISING IS AN EASY WAY TO WIN IN THE COMPETITIVE CANNABIS MARKET? THINK AGAIN.

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Ontario legislation has prevented Canada’s licensed cannabis producers (LPs) from owning more than one retail location. However, an enticing loophole exists that allows them to expand their brand presence: the franchise model. Franchising enables LPs to put their name on stores across the country and build critical customer relationships, without directly owning the retail network. It’s enticing but it’s not easy – the communication risks of franchising are significant.

LPs must put their brands in the hands of third parties. Companies that don’t manage this process with extreme precision regularly lose control of their brand, appearing disjointed and unprofessional, and shaking consumer confidence. In such a tightly contested battle, these kinds of mistakes may prove to be fatal. A mistake in retail could damage the entire brand.

In an environment where most communications—from advertising to packaging design—are heavily regulated, privately owned stores provide the forum for LPs to effectively build brand awareness and loyalty. While all brands face some regulatory restraints in retail, it’s in these arenas that they can leverage their experience and in-store communications to build the connections and consumer trust that ultimately lead to brand loyalty.

The stakes in retail are high: heightened competition is fueled by fickle, savvy, demanding consumers. Attention to detail throughout the customer experience plays a critical role in dictating who is victorious, and the smallest brand inconsistencies or mistakes can have devastating effects on consumer confidence and brand perception – especially in a category as new and controversial as cannabis.

Successful LPs recognize that the same discipline they’ve applied to their manufacturing processes and supply chains must now be a benchmark for their retail operations. Rigorous Health Canada-compliant protocols in the greenhouse must now be matched by equally rigorous brand control in-store. Only in this way can LPs be confident that wherever it’s expressed, their brand is strong, consistent, and compliant.

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