Using Quality as a Competitive Differentiator in the Cannabis Industry

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In the aftermath of the recent vaping epidemic, cannabis consumers and businesses are paying more attention to quality than ever. For the sake of the industry’s long-term growth, let’s hope that concern translates into action with both time and monetary investments in improving and promoting high quality.

Today’s savvy cannabis businesses should recognize that focusing on quality could give them a significant competitive advantage in the marketplace. Why? Because to date in this nascent industry, no one else is doing it on a wide scale and in a reliable and meaningful way that consumers understand.

Quality in the Cannabis Industry by Today’s Standards is Weak

Since cannabis is still illegal at the federal level, there is no single set of standards for product testing, manufacturing, growing, packaging, and so on. Whereas the Food and Drug Administration (FDA) has standards in place for food and beverage products, pharmaceuticals, nutraceuticals, and more, there are no such standards for the cannabis industry.

Instead, each state that has legalized medical and/or adult-use marijuana sets its own standards to keep consumers safe. However, those standards are very different from one state to the next and often provide little more than assurances that a cannabis product doesn’t contain contaminants or more THC than is allowed by law. Some states don’t require cannabis testing at all.

Furthermore, some states allow cannabis products to be certified, but those certifications are not standardized and mean different things depending on the source.

This lack of testing and certification standardization creates a number of problems, such as:

  • Labs only test for what the state’s law requires, which could include testing one of more of the following: cannabinoid profiles, microbials, pesticides and herbicides, heavy metals, terpene profiles, and/or residual solvents.
  • Not all labs are created equal, and some states have far more lenient requirements related to accreditation and credentials than others.
  • Equipment can vary from one lab to the next.
  • The skills of lab workers can vary from one lab to the next.
  • Each lab can have its own set of testing procedures.

Each of the above problems leads to inconsistent results and unpredictability for consumers. In other words, the testing done today barely scrapes the tip of the iceberg in terms of truly ensuring that products are safe and differentiating the best brands from the rest of the market.

The American National Standards Institute (ANSI) oversees product standards development for industries, including cannabis testing labs. However, without federal legalization and additional research, it is nearly impossible for the organization to develop regulations for the cannabis industry.

The good news is there are organizations and companies working to create testing and manufacturing standards for the cannabis industry despite federal prohibition. One such organization is The Foundation of Cannabis Unified Standards (FOCUS), which has been working to develop Good Manufacturing Practice (GMP) guidelines for cannabis cultivation, retail/dispensary, extraction, infused products, laboratory, security, packaging/labeling, and both business and environmental sustainability.

In addition, QualSCORE is a customer feedback and market research company that works with cannabis businesses to help consumers identify high quality products and brands in the marketplace with its customer surveys, QualSCORE Quality Rating, and SAFE Certification.

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How Cannabis Businesses Can Gain a Competitive Edge with Quality

It’s important to understand that there is more to quality in the cannabis industry – and any industry – than lab test results. Quality also applies to the level of care a company invests into every aspect of product development, manufacturing, and sales. The ultimate judge of this type of quality is consumers – the people who buy and use cannabis products across the supply chain.

Whether it’s a manufacturer acquiring cannabis from a cultivator to turn into a consumer product or a customer purchasing a cannabis product at a local dispensary or from a delivery company, the quality of the entire customer experience matters to the buyer.

In other words, cannabis companies can use quality to differentiate their products and brands in two distinct ways:

  1. Using standardized lab test results and manufacturing processes to prove their products are safe and reliable
  2. Using customer feedback and certifications to prove the products and customer experiences they offer are the best in the industry

To build the proof required to leverage quality as a competitive differentiator, cannabis businesses and brands need to have a process in place to collect and respond to customer feedback. Importantly, the process cannot rely on online testimonials from sites like Yelp, Weedmaps, or Google, which have proven to be filled with fake reviews making them highly unreliable and untrustworthy.

Instead, cannabis businesses and brands need to self-manage quality from both safety and customer experience perspectives. There are many companies that provide tools to collect customer feedback through online surveys, including QualSCORE, which also provides ways to automate the process and build customer loyalty and repeat purchases.

Competing on Quality to Win in the Cannabis Market

A basic rule of branding is that a brand that can own a word in the marketplace (assuming it’s the right, positive word) will win. Imagine how a cannabis business at any point in the supply chain could grow if it owned the word “quality” and was able to prove that claim to the world with trustworthy lab tests, manufacturing (or cultivation or sales) processes, product certifications, and customer feedback.

The word “quality” is still up for grabs in the cannabis industry. Which business or brand will earn it for the right reasons remains to be seen.

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