THE GREEN RUSH AT FULL BLAST The smokin’ potential of the cannabis market in the United States How to develop an outstanding branding strategy that elevates your cannabis sales Introduction

The cannabis industry in the United States is exploding. With new products and dispensaries popping up daily and more and more states legalizing the recreational use of marijuana, the cannabis market has huge sales potential. Opportunities haven’t gone unnoticed, resulting in hundreds of brands trying to get a foothold in this billion-dollar industry. Despite the industry’s enormous potential, brands are struggling to attract substantial numbers of consumers and fail to differentiate themselves from the competition. How can you establish a frontrunner position in this highly competitive market?

This whitepaper gets you on the right track by providing valuable insights into:

● The current status of the cannabis market and the challenges faced by brands, such as the difficulty to stand out in dispensaries ● Why now is the perfect time to invest in building a solid brand identity - don’t miss out ● How to successfully achieve goals by improving visibility and brand experience

After reading this whitepaper, you’ll know how to use the current situation to your advantage and efficiently maximize your sales numbers. A solid marketing strategy is key if you want to increase your profits and become an authority in the market. Want to learn how? Then keep reading!

2 A deep dive into the current US cannabis industry

Although the cannabis industry is rapidly gaining ground around the world, the United States takes the crown. Marijuana’s popularity is ever-growing among Americans and both medical and recreational usage have exploded over the past 5 years. With dispensaries springing up like mushrooms, nationwide cannabis sales increased by 67% in 2020 and are expected to double to $41 billion by 2025.

. The pace and scale of growth the industry is experiencing “ is a compelling proof point that cannabis is evolving into a mainstream consumer category - Giadha A. DeCarcer, CEO of New Frontier“ Data, a widely trusted authority in cannabis data.

Growth of the U.S. Legal Cannabis Industry 201 - 2025 201 - 2025 est ($USD billions) Growth rates (cagr) $50 21 $41.5 Total legal sales $40 $.0 $5.6

$1. Legal Adult-Use Sales: 22.7% $0 Legal Medical Sales: 1.7% $25.

$20.1 $20 Legal Adult-Use $2.5 $25.1 $21. $1.2 $1.4 $14. Legal Medical Use $10 $11.6 $7.4 Note: Market size projections are based solely on the state markets that have passed

$USD billions $5. $.6 $11.0 $12. $14. $15.5 $16. $0 medical and adult-use legalization initiatives 201 2020e 2021e 2022e 202e 2024e 2025e as of November 2020, and do not include assumptions for any additional states that may pass legalization measures in the future. Source: New Frontier Data

New Frontier data - US legal cannabis market projected to double to $41.5B by 2025 (December 2020)

3 More and more states are allowing the recreational use of marijuana and it is very likely that in a few years, the use of cannabis—at least medically—will be legalized nationwide. Brands are aware of the great potential this offers and spend millions on expanding their marketing activities to boost their sales. They realize it’s now or never if they want to capitalize on the numerous opportunities of becoming an industry leader. The majority of businesses, however, fail to build a strong and differentiating brand experience.

About 10,000 commercial cannabis licenses have been issued in California alone as of January 2021. Cannabis Business Plans, California Cannabis Market (2020)

4 CHALLENGES Why brands fail to take the lead

The cannabis market may be skyrocketing, but it’s still a maturing market in the midst of its growth. The many hurdles still to overcome make it difficult for brands to build a strong name among consumers. What are the major underlying challenges?

I. It is hard to stand out in a restricted environment

Despite most of them having a premium Apple-store-like appearance, dispensaries in the US are simply packed with products, which exposes visitors to an immense range of brands. There are hundreds of cannabis products—ranging from chocolate and personal care products to cigarettes—displayed throughout these points of sale, but most are small and locked away to prevent people from touching them, as required by law. The current set-up of dispensaries forces brands to think of more innovative ways to grab the consumer’s attention. There is still a world to win for those who truly stand out.

II. There is no frame of reference to help new consumers choose

The growing accessibility of cannabis attracts a whole new group of consumers. Most of them are new to cannabis and are unsure of what to look for in a product. All brands claim to offer the best quality, which leaves consumers in the dark about which product to choose. As a result, they end up buying whatever they come across first. The brands that provide tailored consumer guidance will be the ones to dominate the industry.

5 III. The challenge of building a distinctive brand identity

The industry’s booming sales have led to brands rushing into the cannabis market to claim their share. In their haste, they tend to overlook the marketing side of things. This results in poorly-defined target audiences and undifferentiated messaging. Then there are the advertising regulations that vary from state to state, which complicates the roll-out of an overall marketing plan. Budgets are not an issue in this flourishing industry, but brands must find an effective way to distinguish themselves from competitors.

6 OPPORTUNITIES Leave the competition behind by building a strong brand identity

The challenges described are common in fast-growing markets. Businesses that aren’t afraid to pioneer and take the bull by the horns will eventually come out on top. To become a leading player in the cannabis market, consider jumping in on the following opportunities.

7 Connect your brand to a lifestyle people can relate to Redbull, Starbucks, Heineken—just a few of the premium brands calling the shots in their respective industries. The key to their success: a powerful marketing strategy advocating a lifestyle people can identify with—an area in which brands in the cannabis industry still have a long way to go.

To help you build a brand identity with an associated lifestyle that speaks to people, we have put together some excellent tips:

● It all begins with a well-defined customer profile and broad-based consensus on what your brand represents. Together with a clear brand book and guidelines, these are the basic essential elements for building a solid marketing strategy. ● To stand out in your category, you must establish consistent branding throughout every touchpoint—from wall signs to packaging. This creates high levels of trust and enhances familiarity among customers. ● Make sustainability one of the pillars of your marketing strategy. Show consumers that you’re actively investing in sustainable production methods and eco-friendly packaging and logistics. Your care for the environment will appeal to consumers and strengthen your brand’s leading position. ● Make sure your marketing campaign revolves around your product’s unique sensory attributes, rather than its (boring) functional characteristics. As one of the first brands to do so, you’ll have the edge over the competition in no time.

8 Improve your in-store brand visibility with impactful trade marketing items

The constraints on online branding make traditional in-store branding an essential part of the cannabis brand experience. Investing in premium and innovative marketing materials is a great way to stand out and boost product sales. Consider premium name tags, attractive illuminated signs and eye-catching displays to attract consumers and improve your in-store visibility. You can add interactive elements to your branding items to actively involve consumers in their own brand experience and increase consumer engagement.

Instead of focusing on the legislative limitations, be creative and think about what is possible within the boundaries of the law. Even within the industry’s restrictions, the sky is still the limit. If customers are not allowed to physically explore a product, for example, consider showcasing your product at the register. This gives potential buyers the opportunity to closely check out your product while being supervised by the budtender.

Pro tip: Discuss your ideas with an experienced supplier who can act as a sounding board and provide expert advice on the effectiveness of your branding items. It’s worth millions!

9 Turn the budtender into your brand ambassador

Alcoholic beverages are great examples of a product category in which sales largely depend on the bartender’s recommendation. This is no different from the cannabis industry. Provide budtenders with the right information so they can advise customers based on their preferences.

You can turn budtenders into brand ambassadors by creating awareness through training and merchandise. This way, they will recommend your product more often, which ultimately results in growing on-premise sales numbers.

Consider investing in multifunctional marketing items that attract consumers and educate budtenders at the same time. An attractive display to showcase your product that provides useful information for the budtender on the back is just one of many smart ways to amplify your branding’s effectiveness.

10 Create awareness among new consumers

The next couple of years will see millions of people pay their first visit to a dispensary. To familiarize all these potential customers with cannabis products is no small task. In-store marketing items will help you create awareness: materials such as touch screens, menu cards and informative signs can help consumers discover their preferences and learn about the many options available.

Educational content about the possible effects of marijuana, the various reasons for consumption (e.g. stress relief or medical support), and product innovations not only enhances your brand’s status as a trusted authority, but also helps to reduce the stigma still attached to the industry. A win-win!

Join forces with an experienced supplier who can assist you throughout the process

Setting up a marketing plan that uses groundbreaking items to bind consumers to your brand is easier said than done. Fortunately, you don’t have to go through this process alone. Teaming up with an experienced supplier who can provide expert advice regarding the feasibility, quality, sustainability and effectiveness of your branding ideas will help you achieve your branding plan goals. And by working with a single partner throughout the process, you will avoid unnecessary spending and reduce your Total Cost of Ownership.

11 KEY TAKEAWAYS Brand-building as a key element to dominating the cannabis

1) The US cannabis market is exploding and many brands are looking for ways to cash in. Despite the excellent sales figures, we see that legislative constraints, the ever-growing range of products and the lack of a clear value proposition prevent many cannabis brands from reaching their full potential. Now is the perfect time to invest in building a solid brand and propel yourself ahead of the pack.

2) To truly stand out and take your sales to the next level, you must dedicate time and money to the development of premium and sustainable marketing materials, connect your brand to a relatable and identifiable lifestyle, and use educational content to create awareness among both consumers and budtenders.

3) Teaming up with a partner with in-house knowledge of the market and its opportunities will help you take those first important steps towards establishing your brand. Over time, you will see the entire industry transform from a chaotic market into a fully-fledged, mainstream product category.

12 TIME TO ACT Join forces with an experienced partner to maximize your ROI

Dekkers is a specialized partner who not only uses high-quality and innovative marketing items to help you enhance your brand experience, but also provides valuable advice based on our years of experience in the market. Together with you, we will develop an impactful and sustainable branding plan that meets your objectives, budget, and brand guidelines, and will inspire consumers nationwide.

We can take care of the entire branding item development process for you, from the very first draft to the delivery of a high-quality prototype and an efficient logistics set-up. Our promise to you: smooth communication, the shortest possible lead times, efficient budget allocation and a significant TCO reduction.

Are you looking for ways to fully realize your marketing potential and outperform the competition? Talk to one of our experts about the possibilities and let us turn your vision into attention-grabbing marketing materials with the highest possible ROI:

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