Measuring cannabis market fallout in wake of CannTrust scandal

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Dave Scholz of Montreal-primarily based Ledger makes use of the stage at MJBizConINT’L to reveal the benefits of the industry study firm’s new study on Canadian cannabis companies’ reputations amongst customers. (Photo by Matt Lamers)

The scandal that created CannTrust the least-trusted cannabis corporation in Canada is weighing on the reputation of the complete market, according to a new survey by industry study firm Leger.

Dave Scholz, a companion at the Montreal-primarily based corporation and a reputation professional, stated that is largely since Canada’s cannabis corporations – even the biggest ones – haven’t totally differentiated themselves but.

“Everybody’s reputation dropped,” the pollster told Marijuana Enterprise Each day on Thursday in Toronto as MJBizConINT’L kicked off.

“It’s a new market, so no corporation has actually differentiated itself but. A single terrible apple can spoil the bunch, and that is what’s affecting all their reputations.”

The Leger survey was carried out on the web from July 12 to July 15 – about a week just after Ontario-primarily based licensed cannabis grower CannTrust was sanctioned by Overall health Canada for conducting unlicensed cultivation and giving inaccurate information and facts to the federal regulator.

The margin of error for the study was +/- two.49% – 19 instances out of 20 – and 1,521 Canadians had been polled on the web.

Scholz released the complete benefits of the survey through a presentation at MJBizConINT’L.

The poll identified that Alberta-primarily based Aurora Cannabis maintained its narrow lead more than Ontario’s Canopy Development as the “most reputable” marijuana corporation in Canada.

Quebec’s Hexo, Leamington, Ontario-primarily based Aphria and Toronto-headquartered Cronos Group, respectively, trailed the two leaders.

Scholz stated the poll benefits have constructive takeaways for the cannabis sector.

The initial survey, carried out earlier this year, identified that levels of awareness about the producers had been exceptionally low across the board, laying bare the challenges ahead as legal cannabis firms appear to make lasting impressions on customers.

The July survey showed enhanced awareness.

“If there’s something constructive to come out of this, it is that men and women are beginning to be conscious of the brands that are manufacturing and promoting cannabis,” Scholz stated.

“That’s the constructive aspect, but the terrible aspect is that we’re not providing them necessarily a fantastic story of what these corporations are about correct now.

“For a fledgling market, that is a quite fantastic start off.”

New: Buyers polled

To isolate the benefits to customers and nonconsumers, the July survey asked the 1,521 respondents if they had consumed cannabis, and 16% of Canadians reported shopping for cannabis via a legal channel due to the fact October 2018.

Aurora and Canopy maintained their positions as the most trusted cannabis corporations.

The benefits show that their reputations rose drastically when only customers are thought of.

Amongst these who had bought cannabis via a legal channel due to the fact final October, Aurora’s reputation score was 47, Canopy’s 34, Aphria’s 21 and Hexo’s 19.

“When I ask men and women who have bought cannabis, Aurora’s score increases to 47. So that is a pretty constructive score,” Scholz stated.

“The men and women who are shopping for are feeling additional positively about cannabis corporations than the rest of Canada. So your present industry is saying fantastic points about you.”

Scholz stated the objective for the regulated market must be to start off attractive to new possible consumers and to create that reputation with them as effectively.

Amongst customers, Aurora led in the “good opinion” category with 51%. Only three% had a terrible opinion of the Alberta corporation, and 46% weren’t confident.

For Canopy, 40% of customers had a fantastic opinion, six% terrible and 53% weren’t confident.

Aphria closed out the major 3 with 25% constructive, four% adverse and 73% unsure.

CannTrust has some ground to make up, as the corporation fell to final amongst the 19 corporations in the survey – 11% had a terrible opinion and 20% had a fantastic opinion.

But CannTrust is undertaking points correct by getting additional forthcoming, according to Scholz, and it is doable for the corporation to recover.

The company’s sweet spot is that 25% of these surveyed know of the corporation but have no opinion, he added.

“Do not confuse brand and corporate reputation,” he stated on stage.

Flip the script

Media coverage has mainly reflected increasing pains inside Canada’s fledgling cannabis market, Scholz pointed out.

So, for corporations to strengthen their image, they’re going to have to assist build constructive narratives.

“The quantity of solution that is out there, the difficulty of accessing it at retail outlets, and just the common troubles of a new market in the initial year is what we’re hearing a lot about,” he stated.

“If I was a single of these cannabis corporations, I would uncover some constructive elements that I can speak about inside the regulations.

“So men and women who are beginning to understand about (your corporation) are finding out fantastic points, as opposed to, ‘Here’s yet another cannabis corporation that is potentially increasing solution illegally since I’ve heard an individual else is.’”

Lessons

To stay away from increasing and falling with the tide of the sector, Canada’s leaders in the regulated cannabis market are going to have to build their personal stories, Scholz stated.

The reputational professional also suggests that corporations have a strategy in location in case a crisis hits.

And if a scandal does befall a corporation, act rapidly.

“React rapidly. React transparently and honestly,” he stated. “If there is a reputational crisis taking place, do not attempt to drag it out by hiding it.

“Get on major of it as quick as doable. We’ve observed examples of that exactly where a single adverse story compounds into a second adverse story.

“Getting out from underneath that reputational crisis can be pretty complicated, and you require to make confident that you are on it as quick as doable.”

Matt Lamers can be reached at [email protected]

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