Some have said that the fastest-growing sector in cannabis is cannabis technology. While cannabis technology companies often serve very specific regulatory needs and enter the marketplace in a tech-mature world (as opposed to those during the initial dot-com era), cannabis tech companies with hyper-growth ambitions can learn from the tech company failures of the past.
Think Ahead, But Not Too Far
Many emerging industry companies have gone bust because they were simply too progressive. From the dot-com era, WebVan and Kozmo were two delivery companies with considerable capital that both went bust, only to see companies like Amazon eventually optimize the services they both introduced. Not every first mover gets first-mover advantage. There’s a lot to be said for meeting the customer or client where they’re at.
But moving people ahead is completely possible. Cannabis tech companies can think through the future of their business by planning past a regulatory world and creating brand loyalty well before any necessary pivots.
Setting an agenda to change the narrative and create demand is a long-term play, but consumers DO change behaviors and in the wake of COVID, there is still an opportunity to maximize the massive mind-shift happening. Cannabis itself is an outstanding example of changing the narrative. In fact, changing the narrative is an excellent competitive strategy and a way to differentiate yourself.
How Cannabis Tech Can Prepare for Bigger and Better Funded
As cannabis becomes a bigger part of the economy in more states, there will be more entrances into the marketplace.
Cannabis tech only has to look at what happened to the CBD space after the Farm Act passed to see a more recent cannabis example of this. From a tech perspective, a good example of this is the Pebble Smart Watch, which raised $10.3 million on Kickstarter (the most successful Kickstarter ever at the time). But of course, they struggled to compete with competitors like Apple Watch.
B2B cannabis tech companies are vulnerable to this as Silicon Valley continues to double down on cannabis tech from companies and founders with no experience in cannabis, but more funding. Dutchie is an example of this. Dutchie’s model is less cannabis and more tech as they model their services to something more akin to GrubHub. Silicon Valley likes companies that reinvent proven scale models.
Cannabis tech companies, whether they serve B2B or B2C should leverage both advertising and PR, together to secure market share AND trust simultaneously. Align your cannabis advertising and PR campaigns and messaging. Don’t isolate your advertising data from PR. Together they can be stronger. Branding dominance and brand value is the way to secure marketplace valuation; had Pebble done that, they would have stood a better chance of survival or at the very least gotten closer to the original offer of $740 million (which they got in 2015), as opposed to the sell to Fitbit for less than $40 million in 2016.
Cannabis technology companies should also be prepared to tell stories that aren’t technology-oriented. Whether those be founder stories, or purpose, there is also more to talk about, so prepare yourself and get those corporate stories in place.
And when there are lulls in cannabis tech VC funding, that’s a great time to prepare for the future and focus your energies on the most important initiatives to help you stand out when the funding cycle returns.
Watch Consumer Tech Trends
Media consumption on the biggest social media platforms may well have peaked already. 2021 was the first year Facebook reported a decline in users. So what’s happening to those consumers? They certainly haven’t left the internet, they’ve simply shifted platforms.
Consumer communication with a cannabis niche or cannabis advertising platforms can learn so many lessons from the failures of social media platforms, in particular Facebook. These platforms need to evaluable the trust equation and invest in it immediately. Whether the customer is B2B or B2C, there is a broader techlash going on.
Leveraging the trust of third-party media outlets is imperative now. And unlike plant-touching brands, cannabis tech companies have a wide-open playing field about the media outlets who will write about them. We always say that “trust is an inside out job,” and that means PR can only clean up so much if you’re abusing trust; if you’re the Theanos of cannabis tech, PR won’t be your biggest spend.
Cannabis tech is sure to be a competitive and thriving sector with massive ups and downs, but those who reach hyper-growth will have taken a page out of the successes and failures of past Silicon Valley darlings. Check out our PR Case Studies and Results for more ideas about how to stand out in cannabis tech.