Let's Talk About Terpenes

How the cannabis industry has traded accuracy, for sake of simplicity

Friends,

On the 31st of August 2020, GTEC became the first Canadian cannabis producer to list their products terpene profiles on their products packaging under their premium cannabis brand BLKMKT. 👇🏽

To understand the potential significance of this milestone, we, first of all, need to take a step back and understand what exactly terpene profiles are:

Terpenes are the fragrance molecules found in all plants, including cannabis, and are the molecules that are responsible for causing each cannabis cultivar (strain) to smell different from one other.

Although terpenes are found in an abundance of other plants, what makes the cannabis plant so very unique is that each cultivar (strain) of cannabis has its own unique combination of different terpenes known as a terpene profile.

What makes terpene profiles so important?

It’s widely thought that terpenes are the primary driver of what determines how a cannabis product will affect a person, or as I like to say if “cannabinoids like CBD & THC are the gas in a car - then terpenes are the steering whee”l.

Now to be as transparent as possible, we need substantially more research on this subject before this claim can be made with absolute certainty, however, there is an abundance of anecdotal reports from consumers which indicates that this is the case.

Gaining accesses to products terpene profiles today

As things stand today, less than 2.5% of Canadian licensed producers provide consumers with access to this valuable information, however, I personally don't think that this should be cause for too much concern - at least not yet, and here’s why.

This graph 👆🏽 is what I like to call the innovator’s adoption curve, and it serves as an incredibly accurate representation of how we typically see changes, such as a complete reform in how cannabis products are presented to consumers coming into effect.

As you can see, we are currently in stage one which is fittingly called Innovators and this counts companies like GTEC, Gnomestar Craft Cannabis, North40 Cannabis, Habitat Life, and a number of other industry leaders.

With this, the ice has now been broken, and based on the conversions I have had with a number of producers over the past two months, we are fast on track to enter the next stage of this innovator’s adoption curve called the Early Adopters.

How long will it take to reach this next milestone?

Today I can count on two hands the number of producers who provide consumers with access to this information, however, if history has a habit of repeating itself, then we will likely see a significant increase in this number within a very short period of time.

My sense of optimism stems from 4 factors..

1. The Playbook Has Already Been Created

One of the main issues that have prevented producers from providing consumers with access to this information to date, is the necessity to remain compliant with all of the existing regulations that Canadian cannabis producers are subject to.

These regulations have prevented producers from adopting the most obvious solution to this problem, which is to simply place a QR code on their products’ packaging - as we have already seen in a number of more mature cannabis markets such as California.

In spite of these limitations, a number of producers have evidently found ways to communicate this information to consumers and as such, the path has already been paved which others can now simply follow.

2. The Return Of Craft Cannabis

The common denominator amongst the companies who are currently paving the path forward is that they are all craft cannabis producers. This is no coincidence.

Abiding by the maxim of quality over quantity allows craft cannabis producers to produce cannabis of superior quality vs producers who are simply focused on producing the largest quantity of cannabis possible, at the lowest price points possible.

With this, when your producing the highest quality cannabis products on the market, being transparent about it is likely one of the easiest decisions any of the operators of these businesses will likely ever have to make.

3. Building Relationships With Budtenders

Budtenders are the bridge between every brand available within a store, and every customer interested in purchasing cannabis - as such I personally view budtenders as the most influential individuals in the entire cannabis industry.

If a cannabis producer is seeking to win favor amongst this highly influential group of individuals, then each producer needs to ask themselves if providing access to this information will increase the likelihood of their products being recommended.

Having asked more than a dozen budtenders this exact question before publishing this piece, the far majority of budtenders responded that they would love to have access to this information - as is already the case in the State of Nevada.

4. A Commoditized Cannabis Industry

From a cannabis producer’s standpoint, the current supply vs demand of legal cannabis here in Canada is cause for concern, with supply exceeding demand by over 10X.

This begs the question - how does one standout? As things stand today the primary way in which producers stand out is by producing cannabis with the highest possible THC percentages, however, will this be enough two years from now?

Personally, I think that producing high THC cannabis will become the minimum threshold for a product to be stocked in a retail store, and with this, a product’s total terpene profile percentage will likely become a MUCH larger point of focus for all.

Now, should these changes come into effect, it’s worth asking in advance how these changes could affect the customer experience within cannabis retail stores.

To properly understand the potential impact of these changes, it’s essential to understand the typical customer experience within cannabis retail stores today.

A deeply flawed dichotomy rules the day

Enter a cannabis retail store today and there is an extremely high likelihood that one of the very first questions you will be asked is whether you would like an Indica or Sativa?

As a new consumer, if your unsure what these terms stand for you will be “educated” that an Indica product will make you feel relaxed, while a Sativa product will make you feel energized, with Hybrids falling somewhere in between.

As great as these distinctions may sound on paper, in reality, there is no correlation between these labels and the effects cannabis products produce - instead these terms are representative of the physical characteristics of cannabis plants.

At a high level, Sativa’s are said to be taller in height with narrow leaves, while Indica’s tend to be shorter in height with broader leaves. 👇🏽

In addition to this mischaracterization of these terms, it’s worth pointing out that.

1. Cannabis affects us all differently, such that a product that produces a relaxing effect for you may produce an energizing effect for me - and vise versa.

2. Nearly every cannabis product sold today is produced from hybrid cannabis plants, stemming from many years of cannabis growers cross-breeding various cannabis cultivars (strains) to produce the most desirable genetics.

Should Retailers Abandon These Marketing Buzz Words?

One of the most important decisions every cannabis retail will have to make in the coming years, as more and more producers make products’ terpene profiles available is whether they want to retain the terms Indica & Sativa or abandon these buzz words.

If I were opening a cannabis retail store tomorrow I would personally be in favor of removing these terms from the customer experience I would seek to create, however, to do so I would need the support of the producers whose products I would carry.

You also have to factor in cognitive dissonance for the average or even above average consumer. When you challenge a perception of cannabis that has been ingrained over decades of misinformation, often people don't even want to accept it and will go to a retailer that will provide them with confirmation bias.

It cannot fall solely on the retailer to educate the consumer, as LP's are still pushing the same rhetoric about Indica vs. Sativa and high THC. It's hard to challenge an idea without the support of the whole industry - Jeremy Jones (CEO & Cannabis Use Consultant @ Triple J's Canna Space).

As Jeremy points out it’s no easy undertaking to create a customer experience without using these buzz words that have become so ingrained in consumers’ understanding of cannabis products, however, the easiest path is not always the right path.

The Current Catch 22 Situation

I’ve been working as a budtender for two months now and haven’t heard one person ask for a “strain high in Limonene”, for example. There are individuals who care about flavor, aroma and how these aspects affect their consumption experience, but they don’t need to get scientific with it - Colin Bambury (Head Of Marketing @ THC Canada).

Educating consumers on terpenes is by no means an easy undertaking, and expecting consumers to want to learn how to leverage this information to buy the right cannabis when they don’t have access to products’ terpene profiles is unrealistic at best.

The cannabis industry currently finds itself in a catch 22 situation whereby a majority of producers continue to conceal products terpene profiles from consumers, which discourages consumers from taking to time to learn how to leverage this information.

Can we reasonably expect consumers to take the time to understand all of the complexity that is cannabis products’ terpene profiles if they don’t actually have access to this information? Probably not.

How Could A Retailer Implement An Alternative Solution?

1. In order to move away from these buzz words every producer needs to provide access to this information. Until we reach this point, the efforts which are being made by individuals like Jeremy will be limited in their impact.

2. As Colin pointed out we cannot assume that every consumer will want to have access to this information, so instead we need to take the time to develop a language that will resonate with consumers which may very well mean using less scientific terms which simplifies all of the complexity that is cannabis products terpene profiles.

3. We need to continue to make investments in educating budtenders. First impressions are lasting impressions, and budtenders are more often than not the very first representatives of the cannabis industry that new consumers will converse with.

How Long Will This Take?

I’ve learned to appreciate that determining a timeline for when these changes will come into effect is an almost impossible analysis to perform.

That said, as more and more cannabis industry leaders have begun to better understand the limitations of using terms such as Indica and Sativa, it seems almost inevitable at this point in time that every producer will in time provide consumers with access to their products terpene profiles as a replacement.

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