Elevating Small Brands: Transforming Cannabis Investment Potential

Exploring the overlooked value of independent brands

Amid the rapid expansion of the cannabis industry, small brands are quietly building consumer loyalty that could redefine market leadership. Investors focused on big players may be overlooking independent brands quietly building stronger consumer ties. While big money chases big players, the smart money is strategically identifying unique opportunities for growth and loyalty that larger MSOs struggle to replicate.

Rise of Cannabis Investment

Cannabis investment has skyrocketed, with global investment activity increasing 165% in 2021, reaching over $10 billion. The U.S. market was valued at $32 billion in 2023 and is projected to exceed $50 billion by 2026. Much of this capital has gone to multi-state operators (MSOs), but investors are missing out on smaller, independent brands that have an opportunity to excel at customer loyalty and retention.

Why Small Brands Are More Valuable

Large-scale acquisitions often dilute the unique identities of smaller companies, leading to challenges in differentiation and consumer connection. Through Lattice’s brand positioning strategies, independent cannabis brands can transform their consumer connections into a lasting competitive advantage, driving market differentiation and growth. According to BDS Analytics, brands with strong consumer loyalty see repeat sales 3.5 times higher than competitors which would make a significant impact in the industries fight against price compression.

Lessons from Craft Beer

Craft beer has provided a proven formula on how small brands can thrive despite industry consolidation. Craft breweries, despite producing only 13% of beer volume, make up over 25% of U.S. beer market sales, demonstrating the ability to capture market share despite market size.

Brand Loyalty as a Driver of ROI

Research from McKinsey and Bain & Company reveals that brand loyalty drives higher ROI, revenue, and profitability. Companies focused on building strong customer loyalty are rewarded with up to a 10% boost in revenue and can reduce customer acquisition costs by 50%. Partnering with Lattice, small cannabis brands can leverage data-driven loyalty programs and personalized growth strategies to drive sustainable revenue and long-term consumer retention.

The Future belongs to the Bold (and the Small)

The future of cannabis will be shaped by innovative, consumer conscience brands. Investors who recognize the value of brand loyalty and consumer connection will find these companies to be a better long-term bet than some large-scale acquisitions. Just like craft beer, many are poised to potentially lead the industry.