New Brunswick’s OrganiGram Preparing to Light Up Recreational Market

New Brunswick’s OrganiGram has made a name for itself as one of Canada’s 35 licensed producers of medical marijuana. But with the legalization of recreational use becoming more and more imminent (legislation is expected to be introduced in spring 2017), the company is already planning their entry into that market.

OrganiGram’s brand prides itself on offering 100 per cent organic cannabis to its patients. Building relationships with patients, understanding their needs and helping them through the complicated process surrounding medical marijuana is another part of its brand focus. But when it comes to providing offerings for recreational use, OrganiGram recognizes it may need to take a slightly different approach.

“I love the idea of getting a better understanding of what OrganiGram stands for right now with our patients and trying to figure out how that brand evolves beyond medical into the recreational space,” says Ray Gracewood, OrganiGram’s chief commercial officer and self-proclaimed “brand development geek.”

“Right now we’re going through the process of understanding what we require in a brand or in a series of brands to play within that recreational market space.”

To play within the recreational space, OrganiGram may have to expand its offerings. Right now, the company offers dried cannabis and cannabis oil. However, as seen in the state of Colorado where pot has been legalized since 2013, you can put pot in almost anything.

“The other interesting opportunity is that when we look at a market like Colorado, for example, dried cannabis plays a significant role within that industry, but there’s an awful lot of other products that also play a role. You get into edibles…  you get into different concentrates, the list goes on.”

Ray Gracewood

Ray Gracewood

To expand their product offerings, OrganiGram will also have to expand their operations.

“So from our perspective, we need to make investments now from a capital perspective to be able to deal with a lot of those manufacturing requirements that we’ll have, ” says Gracewood.

In August the company purchased a second building in Moncton. Gracewood says a lot of that space will be allocated to edibles and extract manufacturing

“So we will be able to produce the products consumers will demand once the inevitable recreational market occurs,” he says.

Yet, exactly how the recreational market will be regulated has yet to be seen. There will be rules to abide by both federally and provincially. Gracewood says most people in the industry see it going one of two ways.

“Right now there are a lot of different conversations happening within our industry about how the regulations will impact what we’re allowed and not allowed to do,” he says. “Some of the examples that come up in a lot of those conversations are how could it possibly mirror the beverage alcohol industry or how it could possibly mirror what’s happening in the tobacco industry.”

Having similar regulation to the tobacco industry wouldn’t be ideal.

“Our view is that cannabis and tobacco are completely different products with completely different effects and really have no comparison with each other,” Gracewood says. “The comparisons to the beverage alcohol industry from branding and a marketing perspective I think are more valid.”

Gracewood says this approach would help relieve that last bit of stigma around recreational pot use.

“The way to do that is to allow companies to create brands that are socially responsible and also understand what their consumers are looking for,” he says.

For instance, there may be the Molson of marijuana and the Picaroons of pot. Different brands will offer different things to customers.

“I think every consumer packaged good evolves to a point where there are big brands and there are small brands and I think this market will evolve in the same way,” Gracewood says.

Gracewood says the medical and recreational cannabis industry has the potential to bring in $5 to $7 billion a year, and has the potential to just as big or bigger than the alcohol beverage industry. But right now, licensed growers can only grow so much.

“We can’t produce that much product right now, so there’s got to be time to allow the industry to scale up in terms of production, which a lot of licensed producers are doing right now,” he says.  “And through that process will be brand development, brand recognition and first-to-market strategy.”

Whether it chooses to launch a mainstream “coast-to-coast” brand or stay in a niche market, Gracewood says OrganiGram is likely to continue branding itself under the organic banner as it moves into the recreational market.

“Just like somebody is going to walk into a grocery store and they’re going to identify with a higher priced organic tomato, we’re understanding our consumers to be much of the same mind,” he says. “It will become very niche in terms of what elements of products appeal to different segments of the market, but at the end of the day, organic will the thing we hang our hat on. “

Regardless of how they decide to go forward, Gracewood says OriganiGram wants to play a leading role in putting New Brunswick and Atlantic Canada on the map when it comes to the cannabis industry.

“There’s a lot of opportunity out there for New Brunswick to really be invigorated through this industry. So we’re hoping to help develop that as one piece of the puzzle,” Gracewood says.

“There’s a massive opportunity for Atlantic Canada and New Brunswick specifically to really benefit from how this market develops over the next couple years.”