Branding and marketing in the cannabis industry play a large role in the promotion and sale of cannabis products in Canada. With a wide range of cannabis products now legal, many companies are looking into getting their brand on new and exciting products such as vape pens, cannabis-infused beverages, topicals, edibles, capsules, and tinctures.
However, some brands may not have the start-up capital to build a manufacturing facility, secure a Health Canada licence, and get a cannabis business up and running. In these situations, it would probably make more sense to partner with a licensed processor that is already well into production and focusing efforts on creating a diversified range of high-quality cannabis products.
In this article, we’re going to explain the role of ‘white labelling’ in the cannabis industry, and how this may be a good option for your cannabis business. But before we jump into things, we should probably explain what white labelling is.
White labelling is the term used when one company manufactures a product, and subsequently that product is then sold and marketed under another company’s brand. This is most often done in exchange for a set fee or a percentage of product sales, depending on the terms of the agreement.
So essentially, when a manufacturing company makes a product, it has a ‘white label’, because the manufacturer does not attach a particular brand to the product. Rather, a partnering company attaches their brand to the product for sales and marketing purposes. This means that the company manufacturing the product, the ‘white labeller’, can potentially partner with multiple different companies, for branding and sale to the final consumer.
As mentioned above, companies generally look to white labelling services if they don’t have the necessary infrastructure or capital to manufacture the product themselves. This is very common in the cannabis industry in particular, as building a manufacturing facility and securing a cannabis processing licence from Health Canada (to manufacture and package cannabis products such as edibles, extracts and topicals) is a lengthy and expensive process. Of course, cannabis brands want diversified product offerings to meet consumer demand. However, the processing facilities required to make these products are massive investments.
Through white labelling strategies and partnerships, cannabis companies have the potential to create new revenue streams while limiting their operational costs. Some cannabis processors are even exclusively positioning themselves to provide turnkey white label solutions for cannabis vape pens, edibles, infused beverages, and other extract products.
To conclude, white labelling is advantageous for companies aiming to enter the expansive cannabis market without investing much of their own internal resources – thus, allowing them to capitalize on the market without breaking their budgets.
We hope this article has shed some light on white labelling in the cannabis industry. If you’re considering this as an option for your business, it’s important to choose the right partners and create a solid business relationship so that you can bring a wide range of high-quality cannabis products to the market!
How we can help you
At Cannabis License Experts, we provide you with the guidance to plan your cannabis business, acquire funding, navigate the legal requirements, and acquire the appropriate licence for your operations. As the Canadian cannabis industry develops, more and more licensed producers will be needed to meet the demands of consumers.
Cannabis License Experts offers support from day one of starting your cannabis business, including strategic planning, floor plan preparation, site audits, SOPs, Preventive Control Plans (PCPs), cannabis product label reviews, and more.
Our Edibles Compliance division can provide you with a solid plan for your edibles business to help get your products on store shelves.
Contact us today to discover how we can license and legalize your cannabis business to meet federal or provincial regulations.
