There’s no doubt that celebrities can have a significant influence on a brand, particularly when it comes to Gen Z and Millennial demographics. At the same time, politicians can lend an air of credibility and provide valuable insights into the regulatory future of a market. These attributes have made them invaluable to cannabis companies that aim to set their products apart from the competition and gain a competitive edge.
Let’s take a look at why celebrity endorsements work, how politicians influence brands, and how innovative cannabis companies are leveraging both of them.
Why Celebrity Endorsements Work
A Taiwanese study found that consumers better recall products that have been endorsed by celebrities, regardless of whether they are actual fans. The reason is that the human brain recognizes celebrities like it recognizes someone that they know and trust. At the same time the brain subconsciously believe that purchasing a product promoted by a celebrity will enable them to emulate that celebrity’s desired traits.
There are many examples of this success in action:
- Chanel’s decision to sign Nicole Kidman in 2003 helped global sales of its promoted perfume by 30%.
- Nike’s decision to sign Tiger Woods in 2000 helped its market share rise from 0.9% to 4% in just six months.
Not surprisingly, Wall Street has also caught on to these trends and investors have started to pay attention. MarketWatch reported that a simple announcement from a brand singing a celebrity or athlete can cause the stock price to rise slightly and increase sales by four percent on average. These bottom line improvements mean that investors should keep an eye on brands that are drawing the attention of celebrities.
Critical to Cannabis
The cannabis industry has turned to celebrity and political endorsements for a variety of reasons, including the lack of consistency for consumers, advertising limitations for brands, and even the expertise that can be offered to ancillary service providers. In other cases, celebrity endorsements have become critical for promoting medical cannabis legalization, including in the U.S. market where federal legislation is absent.
The lack of consistency and reliability when it comes to cannabis brands has made endorsements one of the only reliable quality metrics for consumers looking for products on dispensary or retail shelves. If a celebrity is willing to put their name on it, many consumers reason that the product is better than lesser known brands on the shelf.
For example, Chemesis International Inc. (CSE: CSI) signed Jay and Silent Bob last year to help create a new brand and endorse its products in the United States. The exclusive licensing deal helps set apart its products by associating the company’s products with two of the most famous faces in the industry. Consumers that see these endorsements could prefer its products over competing and lesser known products on the shelves.
Some cannabis markets also have branding restrictions that make celebrity endorsements one of the only ways to stick out. Canada’s nascent cannabis industry, for example, permits only plain packaging and doesn’t permit any outright marketing campaigns for cannabis products. Celebrities provide a valuable way to differentiate products with these kinds of restrictions and build trust among customers.
Finally, celebrities have been critical in advancing cannabis legalization. Gabriella’s Kitchen Inc. (CSE: GABY) sponsored the documentary Weed the People, which featured celebrity talk show host Ricki Lake. The critically-acclaimed documentary sought to show how medical cannabis has made a positive impact on the lives of several families in an effort to promote the beneficial effects of medical cannabis and support broader legalization.
Since its debut in Oregon, the documentary has expanded its distribution onto Netflix, Amazon Prime, iTunes, Google Play, Vimeo on Demand and Vudu. The documentary also secured a 100% rating among ten critics on Rotten Tomatoes.
Celebrity and political endorsements play an important role in the cannabis industry. Given the proven impact they have on revenue, investors may want to pay close attention to companies that are actively seeking out endorsements and secure some of the most prolific tastemakers.
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