Perfecting Cannabis Product Development: Balancing Creativity & Compliance

Cannabis is a new market, but a crowded marketplace. Across medical and recreational states, companies are constantly bringing new products online, taking old ones away, and launching new brands. Everyone has the same goal — to capture a significant share of the market. To do this, your cannabis product must bring significant value to your customer’s life.

What adds the most value? You don’t have to reinvent the wheel to know what your customers are willing to pay for. Start by asking them. Leverage customer feedback on existing products to guide new product development. Pull your customers into focus groups to test new products or weigh in on enhancements. The most popular products provide the best solution to a problem, whether the fastest, most affordable, most reliable, or most enjoyable — not the newest.

Use your customer feedback as a guide, not a gatekeeper. Creative problem-solving is a competitive advantage in crowded markets like cannabis, so pull in a meeting of the minds and let the ideas flow.

What’s the most creative way you can solve a customer’s problem? Adding value to an existing product doesn’t need to break the bank. What’s the most cost-effective way to do that? By letting your customer weigh in from the start, you can ensure you’re keeping the customer experience and your target market at the forefront of your product development process while keeping a sharp eye on your bottom line.

Product safety is of the utmost importance in the cannabis industry. For decades, only the most daring consumers had access to the plant, in unregulated and untested form. Safety, lab results, and quality assurance are three major benefits of the legal cannabis market. The assurance of product safety is what draws many cannabis-curious consumers to a dispensary. They need to know they can trust your brand and your products.

The quality control process for a cannabis product starts in the design phase. Once you know what kind of product you want to bring to market, you must create a minimum viable product (MVP) to get a minimum production cost. Safety and quality assurance must factor into this maximum production cost. Testing requirements and QA processes for lab results are also important.

Quality control continues through the development and manufacturing process. Have you factored consumer safety and child-proofing into the product design? Innovative products have to be balanced with both CPG best practices and regulatory requirements for cannabis packages.

But you can go further to solve your customer’s problems. Does the packaging need to be spill-proof, tamper-proof, light-proof, or smell-proof? Also consider the question of single-use waste — are you using a sustainable packaging material, or can you? Every stage of the cannabis product development process calls for creative problem-solving to stand out on the shelves and provide the most value to your customers.

This process is different for craft cultivators looking to bring a new product to consumers than it is for a company developing cannabinoid medicines. Cannabis products that act as prescription drugs, like Epidiolex and Sativex, must undergo the same process as the pharmaceutical industry, with clinical research, clinical trials, and extensive pharmaceutical drug development. Medicinal cannabis products are typically not made with naturally occurring cannabinoids and are governed like pharmaceutical drug development.

The individuality of each cannabis market in the US means that brands must constantly be innovating both for the consumer and the specific requirements of each cannabis market. One market may demand potency caps and limited branding while another focuses on packaging safety and potency taxes. For brands that launch in multiple markets, each product must be tailored to a state’s specific requirements.

There are also federal regulations that govern the CBD industry and the THC prohibitions that make navigating cannabis so tricky. There are regulations at the state level for medical and recreational markets, as well as any individual municipal demands. It’s a lot for a cannabis business owner to navigate, and it’s why regulatory compliance is a crucial part of the cannabis product development process.

To stand out in a crowded marketplace, cannabis products have to connect with consumers. Each product your team develops should fit into your overarching brand narrative and your mission statement.

Cannabis product development shouldn’t happen in a silo — it takes a collaborative effect between departments to launch a new best seller. Your marketing team should know when consumers are weighing in, which products are coming to market, and how these two questions fit together. This allows them to create a story for each product and weave a compelling narrative that draws the consumer in and connects with them on a personal level. The solution to the problem should be obvious and well-stated so your customers never have to guess what the benefit of a product is.

Education can also factor into this story. Leading cannabis brands are using natural cannabinoids and novel cannabis preparations to deliver the benefits of the cannabis plant faster than ever, and the average consumer doesn’t know much about these — or their endocannabinoid system. Education on the drug delivery process of THC as the primary psychoactive agent, as well as other cannabinoids and the endocannabinoid system helps consumers understand the tremendous therapeutic potential of the cannabis plant.

Launching new products comes with risk. This is true in cannabis as in every other industry, but there are steps you can take to minimize that risk.

1. Don’t rush to market. Be sure that you’re testing your product at every stage to bring your target market only the best of the best. Consumer trust is hard-fought to win but quick to lose. Launching new products is not a sprint to the finish line — it’s a leg in the marathon of success in the cannabis industry. Moving fast and breaking things only works when your innovations don’t put your customer’s health at risk.
2. Be sure that your umbrella of cannabis insurance coverage is updated at each product launch. Cannabis products don’t need their own insurance policies, but it’s always a good idea to stay on top of your business’s evolving risk and coverage.
3. Financial audits and regulatory inspections happen to every business and the best way to deal with them is by sticking to your quality assurance processes and safety best practices. A safe, compliant business has a top-down attitude, and employees take their cues from the investment of leadership.
4. Protect your business by staying on top of the regulations in your state and at a federal level. Changes can come quickly and you need a plan in place if your business has to make a pivot and a quick adaptation to a legal change.

Launching new products is a necessary task for every cannabis business. It’s a chance to show off your creativity, innovation, and how tapped into your consumer’s needs you are. With proper planning and strategic execution, your launches can set you up for success.

Protecting your cannabis company can seem confusing; however, we’re a full-service insurance brokerage working with carriers worldwide to offer you the best coverage possible. We’re here to help! Please reach out to us today by emailing [email protected] or calling 646-854-1093 for a customized letter of commitment or learning more about your cannabis insurance options.