BDSA Brand Insights: Is “true” brand loyalty coming to legal cannabis?

As cannabis markets become more sophisticated and the biggest brands expand across markets, the next big question for the industry is whether brand loyalty will start becoming the norm for cannabis consumers. While cannabis has lagged behind comparable industries with regard to brand awareness (brand loyalty’s younger sibling), in part due to states having unique supply chains and regulatory systems, a number of dynamics seen in brand growth and consumer shopping decisions suggest that brand awareness, and dare we say brand loyalty, will grow among consumers in 2022.

Consumers still do not name ‘reputation of a brand’ as a top-10 influencer of their purchasing decision, but brand recognition plays a big role in shopping decisions. 

BDSA’s Consumer Insights tracks ~20% of cannabis consumers saying brand reputation influences their product choice. ~25% of consumers are also influenced by products being from a brand they have used before, making brand recognition an even bigger consideration for consumers than budtender recommendations and product reviews. 

Branding is still primarily a communication tool to link to a good product experience. 

According to BDSA Consumer Insights, consumers are more likely to choose a product that is FAMILIAR—a brand they have used before (~25%) or one that has been recommended by a friend or family member (~20%). All cannabis consumers, new or experienced, want to have a good consumption experience. As such, they place significant trust in products, strains, brands they have used previously, or recommendations from someone they trust. While branding alone is not something that is top of mind as a choice driver, it cannot be ignored. A good previous experience with a brand will drive repeat purchases.

As brands continue to drive consistent, expected experiences, greater recognition and loyalty will emerge.

Consistent experiences are a major concern for consumers, with ~35% of BDSA tracked consumers agreeing that manufacturers need to do a better job at making product dosages more consistent. As brands continue to employ more sophisticated manufacturing practices and focus on delivering consistent experiences, brand recognition and loyalty will become more prevalent across legal markets. 

With MSO brands on the rise and more brands expanding across borders every year, brand recognition will grow across markets and regions.

One prominent trend for cannabis markets in 2021 was the rise of Multi-State Operator (MSO) brands, which were consistently among BDSA’s list of best-selling brands by dollar sales. For example, according to BDSA’s Retail Sales Tracking, MSO brands accounted for ~35% of dollar sales in MA in 2021, and ~80% of dollar sales in PA.