The Proof May Be in the Pudding, But the Price May Be in the Packaging

Packaging and design, product exclusivity and reusability are priorities consumers are willing to pay more for. This is according to a recent report, “Packaged Potency: How Innovative Packaging Is Powering Brand and Delivering Growth in the Cannabis Market,” which summarizes the results of research conducted by Physis + Agency—a cannabis industry consultancy that specializes in industry research to create better consumer experiences—and consumer and corporate research consultancy Censuswide.

How much more are consumers willing to pay for those priorities? Survey respondents—who spend from less than $30 to more than $100 for 1/8 ounce of flower—say they are willing to pay, on average, 26% more than they are currently paying. “Those already paying almost $80 per 1/8 of flower on average are willing to pay $15 more if there is a reason,” the report found.

Also, the vast majority (86%) of research participants who say they place a priority on brand and packaging in selecting flower products also say the high they get aligns with their expectations from that brand and packaging.

“Brand loyal customers are willing to pay more for something special,” according to the report.

Reusable Packaging a Priority
Nearly three-fourths of consumers surveyed say they would be likely to pay more for a jar of cannabis if the jar could be repurposed or kept as a collectible. Less than 10% say they would be unlikely to do so.

The majority of respondents (64.7%) also indicate they are likely to give cannabis as a gift, while 17.8% say they are unlikely to do so.

Impressing Friends Is Worth Extra Expense
While consuming cannabis can be a personal/private experience, it also is known to be a very social experience. And many of those who consume socially like to impress others with their product choice, according to the report, and that’s where packaging comes into play. Nearly half (49.7%) of consumers surveyed say that packaging is of increased importance to them if the product is going to be shared in a social setting than if they are consuming it by themselves. More than half (59.7%) agree with the statement “Cannabis consumers in my social circle are impressed by product attributes and branding,” while 13.6% disagree.

Having others approve of their cannabis product choice is valuable, too. More than half (55.3%) of those surveyed agree with the statement, “I spend more money on cannabis products that I know I will be sharing in a social setting,” while fewer than a quarter (22.5%) disagree. Nearly half (49.7%) of survey respondents say they feel that others’ approval of their choice of cannabis products makes it worth forking out extra cash.

“Those who are willing to pay the highest prices for 1/8 of flower also report the highest care for packaging in a social setting,” according to the report.  

“As cannabis becomes legal in more states, so too does the consumer base broaden and diversify," Aric Mayer, Physis + Agency founder, told Cannabis Business Times. "There is no better way to stand out to new consumers than with unleveled and eye-catching branding. Our research shows that it plays a significant role how consumers make their purchasing decisions, the amount they are willing to spend, how they approach brand loyalty, how they choose to share product with friends and family and even how they report their satisfaction with their high."

About the Research
The “Packaged Potency” survey reports on original research by Physis + Agency and Censuswide in which they surveyed 1,009 respondents who consume cannabis flower in the 24 states and Washington, D.C., where adult-use cannabis is legal. The research was commissioned by Roland DGA. 

A Case Study
The report also highlights a brand by House of Cultivar, called Colors by Cultivar, which dropped its new Lobster Roll cultivar (a cross between Eye Candy and Apples & Bananas) for Valentine’s Day, as the first of series of exclusive drops. To celebrate the holiday, House of Cultivar produced a limited run of special edition jars at a higher price point.

The jars are “taller than industry average with a more substantial lid that stands out in the crowded retail environment of Washington State,” according to the report.

The custom-printed label is shaped with “textured, raised UV ink and a holographic substrate,” and the logo uses three-dimensional neon light (in rainbow-like "colors") that “seems to ripple as the jar turns.”

The concepts of exclusivity and premium packaging plays to the concept that consumers will spend more to consume, share or gift cannabis that is “something special” as well as reusable.  

House of Cultivar dropped 250 units of Colors by Cultivar in the premium packaging, which cost an additional $1.05 per unit to produce. The company increased the wholesale price by $3 per unit, and the retail price was increased by $10 to $15 per unit. A representative for the company confirmed with Cannabis Business Times that all units were sold.