The cannabis industry is like any other in terms of branding and marketing. Companies establish their brands in hopes of distinguishing themselves from the competition. But unlike beer brands, for example, consumers are not likely to find all their favorite brands in every state. Why is that?
Brands rely heavily on marketing and distribution for their success. Therein lies the problem with state-legal cannabis. The cannabis industry is siloed right now due to conflicts between federal and state laws. The end result is a very fractured industry that tends to operate on a state-by-state basis. Until regulatory conflicts are resolved, little is likely to change.
Where Cannabis Is Produced
The Cookies brand is one of the most recognized brands in the cannabis space. You can find it at the Beehive Farmacy in Brigham City. The company’s Salt Lake City pharmacy carries it too. Here is what you might not know: Utah’s medical cannabis law mandates that all cannabis sold in the state must also be produced there. That means the company behind the Cookies brand needs to have operations in Utah.
No doubt Cookies has competitors in other states; competitors that do not operate in Utah. Their products do not show up on Utah pharmacy shelves because pharmacies are not allowed to stop them. That’s really what it boils down to.
It takes a lot for a brand to establish operations in a new state. Some of the bigger brands have enough corporate investments behind them to continually expand from one state to the next. Smaller brands do not necessarily have those resources. They might operate in only a handful of states – or even just one state.
No Interstate Transport
The necessity of setting up operations in every state in which a brand wants to sell is the result of federal laws against interstate transport. Remember that cannabis is still a Schedule I controlled substance in Washington’s eyes. Therefore, it cannot be transported across state lines.
Utah law explicitly bans commercial imports of medical cannabis products. It goes one step further: individual patients are not allowed to bring medical cannabis into Utah from neighboring states. And of course, it is illegal to take cannabis on a commercial flight in the U.S.
Without the ability to transport cannabis across state lines, brands need to be very circumspect in terms of where they want to operate. A lot of brands choose to concentrate on states like California, Oregon, and Colorado, where the recreational market is strong. They believe they can maximize their investments by doing so. Smaller markets, like Utah, still need access to medical cannabis products. There is a medical market in Utah that brands like Cookies are willing to exploit.
You May Have To Try Something Different
The logical conclusion to all of this is the potential of having to try something new if you cannot find your favorite brand when you travel. Maybe there is one brand you tend to stick with in California, where you live. But when you travel to Utah to see family, you cannot find that brand. You either try something new or go without.
As long as interstate transport remains an issue, there are not going to be many brands establishing themselves on a national scale. But should Washington ever decriminalize cannabis at the federal level, watch out.
Some of the biggest brands in cannabis would be able to leverage the financial resources necessary to expand nationwide. They would look to become the most dominant brands that ultimately become household names. Whether or not it actually happens remains to be seen.