In Cannabis, Create IP to Win
There are few ways in the legal cannabis space to create true barriers to entry and superior profits. Inventing and leveraging Intellectual Property (IP) is one of them.
Kicking off
IP is a proprietary asset that can deliver sustainable business value. It can be a product innovation, exclusive genetics & inputs, homegrown technology, unique business practices or a week-known brand.
By itself, IP has no intrinsic value. It becomes important when you get strategic advantage such as an unassailable industry position, market-leading cost structure or the ability to generate price premiums.
World class firms always have strong IP and defend it aggressively.
The reality
The acronym ‘IP’ gets thrown around a lot. Many firms claim they have IP, but at the end of the day what they are selling is basically a me-too product.
Unless you are lucky to stumble upon a great invention, creating IP is not easy. It takes skill, time, investment and a deep understanding of your consumer and operations.
Interestingly, some companies may have IP and don’t even know it. Other firms may know they have IP, but are neglectful or ignorant in its protection or commercialization.
Protecting your brand
Any IP that is proprietary and compelling is worthy of protection. Usually this will start with a trademark or patent.
I asked a leading cannabis IP lawyer, Alice Denenberg, for some trademarking tips and watchouts:
“Every cannabis brand should run a trademark search before selecting their name.
When selecting a name, think creatively. If you select a name similar to one or more existing names, then you are inviting problems. The same applies to names that describe the product; they are hard to register and more challenging to enforce. A highly distinctive name is harder to market but easier to register and enforce.
Don’t piggyback on the IP of other brands. Making a cannabis product that mimics another brand, their name, imagery or packaging is a path to a very expensive and business ending lawsuit (see Starbuds case).”
Brand IP should also be fortified through consistent investment in activities such as advertising, promotion, and product enhancements.
Patenting a novel technology or a business practice is also possible, though it takes significant amount of time and money to secure.
Capitalizing
Pursuing an IP-based corporate strategy only makes sense if you can leverage the fruits of your innovation. Some Canadian LPs like Decibel and Organigram have successfully used product IP to capture significant market share and differentiate their firms.
Other, non-cultivators like Binske have enjoyed success by licensing their IP-rich cannabis brands to operators in different States and Canada.
Call me. I help leadership teams solve difficult strategic, cost & organizational problems and capitalize on growth opportunities.
#IP #strategy #Binske #Decibel #Organigram #innovation #trademark ing