Many marijuana growers are aiming to become as big as possible, hoping to benefit from economies of scale and dominate their state markets. But some well-respected cultivators opt to stay small and authentic to their initial vision. At the Marijuana Business Convention & Expo in November in Las Vegas, I had the honor of joining the founders of other prominent craft cannabis brands, including Blessed Coast Farms owner Siobhan D. Darwish, Bloomfield CEO Brooke Sinclair and North Coast Growers founder and CEO Matthew Sampson, for a discussion on how small businesses can compete with large, well-funded corporations in the age of industrial cannabis.
Smaller retailers and growers, like L’Eagle in Denver, have to cultivate strong relationships with customers to provide a personalized experience. Photo courtesy L’Eagle.
Amy Andrle
Co-owner
L’Eagle Services
Denver, CO
Relationship management
During the discussion I noted that staying small allows company owners to maintain tight control over company reputation. Our brand is linked to the quality of our product. In order to keep that quality high, we have to work from a solid foundation. Frequently, consumers are interested in the growing process, the chemicals used, if any, and the company and community they choose to give their loyalty. We need to be able to answer all of these questions satisfactorily and keep our customers engaged. We couldn’t do that as a larger company.
Sinclair emphasized the relationship between the business and the consumer. “Building a relationship between your products and your consumers is paramount to a small business,” she said. “Being a small grower allows you to make a stronger connection with your community than a large corporation can, maybe not in dollars, but in personal touch, and ultimately this allows you to develop stronger brand loyalty and cultivate a positive reputation.”
Know your audience
The tight control over business decisions, product development and quality management are the top reasons why Sampson prefers staying small in the age of big growers.
“There is room for craft cannabis the same way there is a market for high-quality experiences such as craft beer and fine wine,” he said. “As a small business, North Coast Growers, we go out of our way to provide terpene profiles.”
Understanding your audience is key to brand success. Cannabis is personal to each of our customers at L’Eagle. They want a personal experience. Small businesses can give that because we speak with our customers regularly and understand what they want. At L’Eagle, we have a niche product, and we can cater to the consumers who are looking for quality, clean cannabis. From the beginning we were totally transparent about how cannabis is typically produced and what we were doing differently. We needed to show customers that we were reputable and this has paid us back tenfold.
Darwish noted that being authentic and transparent go hand-in-hand for small businesses. “Our target market is concerned with knowing who their grower is and is invested in the farm-to-table concept, which we can provide,” she said.
Strategies for the future
In the absence of true federal certification between conventional and organic, we have to personalize the customer experience and build trust and confidence with our clients. Larger growers are going to want to expand rapidly. While there is probably a market for their products, what we’re seeing at L’Eagle is that customers want a personalized experience. Ultimately, customers drive what is carried in our stores. If they want a Clean Green product, we can provide that.
Darwish said small growers who are serious about differentiating themselves from large corporations develop their unique selling proposition quite carefully. “We need to take regulations and quality control seriously. Businesses need to have a dedicated person responsible for adhering to regulations and keeping up to date with the political situation,” she said.
Sinclair stressed the importance of small businesses maintaining a heightened awareness around proposed legislation and regulations. “If you aren’t at the table, you’re on the menu,” she said. “Small growers need to be in the meetings that determine future laws and decide what should and shouldn’t be considered. It begins at local government level.”
There are challenges in staying small. At L’Eagle, we don’t have a lobbyist on staff. Although we are involved in industry groups, small growers do not exert the same influence that big corporations can. And currently the big guys are crafting the legislation.
Ultimately, our group of craft cultivators agree that differentiating a small business in the age of big grows is very important for the cannabis industry and for cannabis consumers. There are many reasons to maintain a small company in the age of big grows. Primarily, we can choose to take our company in the direction of our choice. We’re not beholden to investors. We can make philosophical business choices that we believe in, and that we know are right for our customers.