Big Isn’t Always Better - Especially When It Comes To THC

Does the THC arms race even make sense?

Public perception is that both cannabis flower and concentrates that come in below a certain THC percentage are “less desirable” than products that come in higher in THC percentage. This has focused product development on delivering high THC levels with less focus on other, arguably as important, cannabinoids. Cannabis producers dread reading certificate of analysis (COA) results when a large batch of concentrates, flower or distillate comes in below the expected THC ranges. They know they’ll hear all about it from either purchasing managers or customers directly.

According to a study by CU Boulder researchers, higher THC levels are not necessarily the driving factor in how high cannabis users get. And according to this study published in the Journal of Cannabis Theraputics, cannabis is more of a sum of all of its parts vs one major component in THC. If it’s not just about THC strength, then how do brands develop new products? How does the intended effect coincide with the actual consumer experience?

There have been a number of attempts to collect usage data from consumers, but most have been too difficult to scale. The most common technique used by brands has generally been sampling out different variations of new products to staff and gathering feedback based on desired effect, taste profile etc. This results in a very small data set and a new product that is a “winner” in staff testing, might not work out when it rolls out into the general population

One of the most intriguing value propositions for cannabis brands through the utilization of data platforms like Lucid Green, is the opportunity to do true data-driven product development at scale, that directly benefits the user, as well as potentially allowing the Brand to maximize lower THC yielding crops. 

Lucid Green users get to add their dosage and effects as part of their overall experience with that Brand’s product. It’s not an add-on or a separate step they have to remember to take. Allowing users to record their dosage for future reference, as well as providing them with valuable information on the products they’re consuming, makes it more convenient for consumers to provide this feedback. There’s real value in showing consumers that they have a very similar experience when they consume a high strength vs medium-strength THC Sativa dominant products. It’s also really useful to know that consuming products with more than 4mg/g of limonene leaves some consumers with sensitive skin, whereas their skin feels great when dosages are below 4mg/g. As consumers log more usage, they’re able to dial in what works for them and what doesn’t. Ultimately platforms like Lucid Green may help consumers discover the right blend of terpenes and cannabinoids, as they consider their next product purchase. Having both user documented effects and the detailed chemical composition of the product (COA) consumed, yields valuable insights when analyzing the correlation between dosage/effect and full cannabinoid/terpene analysis. These aggregated insights could prove invaluable for a Brand’s future product development.

There’s a promising new data set for brands and consumers alike, that drives home the goal of providing consistent and enjoyable consumer experiences….. even if that means lower THC numbers!


BRANDS - NOW’S THE TIME TO ACQUIRE CUSTOMERS, NOT JUST MAKE SALES


Cannabis digital marketing was pushed into overdrive thanks to the Covid pandemic. Like traditional retail before it, cannabis retail is moving rapidly towards a more digitally integrated experience and consumer behavior is changing along with it. Thankfully for cannabis brands, there’s a tried and tested brand marketing blueprint to follow in order to build out their Direct to Consumer (
DTC) digital strategy.

Traditional Consumer Packaged Goods (CPG) marketers used to operate much like cannabis Brands do now - focused on shelf-space and managing retailer relationships, but the internet changed that dynamic. With the accelerating digital shift and where two-thirds of consumers now expect to connect directly to the Brands they buy, CPG companies have turned to building and managing direct customer relationships, taking advantage of the efficiencies of the digital landscape to do so, rather than fighting to hold back the tide.  While strong retailer relationships help drive sales for cannabis Brands, it contributes very little to increasing the Lifetime Value of the Customer (LTV), allowing the fickle consumer (and retailer) to switch Brands with alarming regularity and no easy way for the Brand to intervene.

Unlocking a latent, powerful marketing channel Brands never knew they had

What if Brands could change all that by creating their OWN marketing channel using their existing widely distributed packaging?  The digitization of cannabis Brand packaging, which requires a tiny footprint, but creates a highly engaging experience right off of every package, gives that power to the Brand almost instantaneously.  Want to deliver a deep branding experience along with all the knowledge required to have the best, most predictable, and enjoyable Brand experience on every product?  Consumers simply point their camera at the packaging.  No app to download, no registration required, no typing, just point-and-click.  Within one production cycle, a Brand can
create a DTC channel, start building a relationship with those consumers, and drive Brand affinity, loyalty, and ultimately repurchase behavior. 

Building a relationship with consumers is not easy, but this is where it gets really interesting.  An integral part of that same, simple packaging interaction is to deliver a call to action for things like product authentication, Brand loyalty, dosage and product tracking, which, of course, requires consumer registration.  When the consumer signs in to access these details, they connect directly with that Brand.  Successful cannabis Brands adopting this digital strategy have amassed tens of thousands of consumers and add hundreds more every day. They integrate their social media, web site, sales collateral into campaigns that both drive higher sales volume AND capture consumers on their digital platform.

There’s no disputing that digitizing cannabis brand packaging works, but how do you, as a Brand, know how much to spend on these tools, loyalty, and promotion?  This is where many young Brands get stuck, but successful traditional brand marketers have already figured this out.

To LTV or Not to LTV - That is the question

Lifetime Value vs Customer Acquisition Costs.  This simple ratio breaks down the complicated consumer journey by accounting for what you spend to acquire a consumer and what they are worth to you.  Simply stated, a 1:1 LTV:CAC ratio would mean you only earned what you spent over the lifetime of a customer - a questionable strategy. The best marketers figured out the “ideal ratio” of 3:1, which means you sell 3x what you spend to acquire each consumer - that’s Brand-building gold!

This is where digitally integrated cannabis packaging really shines. Brands are regularly seeing LTV:CAC ratios of 10:1 or more, even when accounting for the cost of a digitally integrated packaging platform like Lucid Green and the cost of the loyalty program.

The digital trends in cannabis may seem daunting in a new industry with so many aspects of the business still evolving, but one thing is clear, the post Covid retail landscape has changed consumer behavior forever, leaving it impossible for Brands to ignore digital marketing.  This no-brainer first foray into digital marketing allows Brands to gain an enormous advantage from that direct consumer connection, allowing Brands to take control of their brand affinity, loyalty, and drive up that all important LTV ratio.

If you want to see how these numbers play out with your own assumptions, email info@lucidgreen.io to contact your Lucid Green representative, who’ll help calculate your LTV:CAC ratio.