GTEC Holdings (GTEC.V) has revealed its new portfolio of cannabis brands, a must-have for building customer loyalty in a market which prohibits advertising.
Health Canada is explicit in its prohibition of cannabis products which can be interpreted as “appealing to youth or includes elements intended to encourage consumption, such as lifestyle branding elements or testimonials.”
As such, limited branding on packages will be one of the few ways cannabis producers will be able to attract customers, according to the Ottawa Citizen’s Jacquie Miller.
Branding helps consumers differentiate between high-and-low quality products, and between legitimate and contraband cannabis, said Brendan Kennedy, chief executive of B.C. grower Tilray. Branding will also help smaller craft producers entering the market compete against larger, better-known competitors. Without branding, companies will be forced into a race to the bottom, competing on price alone, he said.
The ban on advertising has led to a flattening effect on the industry by rendering advertising and promotional budgets irrelevant, leaving traditional forms of carving out a customer base obsolete.
It means customers won’t be walking into a dispensary in mid-October humming a pot-company’s jingle and they won’t burst through the door with freshly printed flyers in-hand.
Every cannabis company, from industry titans to the lowliest LPs, will have their merchandise sitting side-by-side on store shelves in mid-October, separated by little more than pricing and their packaging.
Granted, some companies have gotten “creative” with their promotional activities as Equity Guru’s Chris Parry noted last week:
- Canopy Growth (WEED.T) is using its Tweed brand to advertise on podcasts that you can come to their website for ‘facts about cannabis‘.
- Namaste (N.V), infamously, used ‘sexy nurses’ in a bagholder party in a Montreal nightclub to sign people up for telemedicine ‘doctor consultations’ that would allow them to sign up as medical patients, much to the consternation of Quebec authorities and one-time partner, Tillray (TLRY.Q).
- Emerald Health (EMH.V) has billboards around BC suggesting people go to their ‘cannabis information site’ but keeps their company name so small you really have to look for it.
- Aurora Cannabis (ACB.T) is sponsoring music festivals, and bringing A-list names out across the country, but specifically not asking anyone to buy their product at those venues, lest the feds get angsty.
GTEC’s portfolio
The first of GTEC Holdings’ six brands is its BLK MKT line. As an “homage to the legacy of cannabis prohibition,” BLK MKT is for long-time cannabis users who desire high THC content in their product.
COGNŌSCENTE, the second brand, places special importance on flavour profiles. Targeting the “sophisticated aficionado,” COGNŌSCENTE utilizes terpenes to maximise the product’s aroma.
TENZO is a balanced lifestyle brand, according to GTEC Holdings. TREE HUGGER is a organic line of “earthy” cannabis products free of pesticides or adulterants.
The company’s FN brand is a specialty line named after the people who comprise Canada’s First Nations. The brand will be “deployed in partnership” with GTEC Holdings’ Aboriginal associates.
Lastly, GTEENTEC is the company’s medical cannabis brand which has been designed to deliver cannabis products with high CBD content.
“I believe that robust brands, supported by effective marketing, will be critical to GTEC’s future success in the premium cannabis market,” said Norton Singhavon, CEO of GTEC Holdings.
GTEC approved to the HMMJ
Besides unveiling its new portfolio, GTEC Holdings has been keeping busy on other fronts: On September 26, 2018 GTEC Holdings announced it was approved to the Horizons Marijuana Life Sciences Index ETF.
MMJ is the world’s first ETF that offers direct exposure to North American-listed securities that are involved with marijuana bioengineering and production. HMMJ is an index (or passively managed) ETF, which seeks to replicate, to the extent possible, the performance of the North American Marijuana Index (the “Index”), net of expenses.
On September 27, SmallCapPower identified GTEC Holdings as one of four companies to benefit most from their recently addition to the ETF.
- Market Cap: $95.2 Million
- Weighting in HMMJ Index: 0.15%
- 1-Month Total Return: -1.8%
- YTD Total Return: -22.9%
-SmallCapPower
The company has a $106 million market cap, a 4.5 price-to-book ratio and closed at CAD$1.30 today.
Full Disclosure: GTEC is an Equity Guru marketing client, and we own stock.