Photo for: How to Choose a White Label Partner For a Cannabis Dispensary

Insights

How to Choose a White Label Partner For a Cannabis Dispensary

The future of your brand depends very much on the type of partner you have selected for your white label product strategy.

12/10/2018

When choosing a white label partner in the cannabis industry, relationships matter. The future of your brand and the way consumers perceive your cannabis dispensary will depend very much on the type of partner you have selected for your white label product strategy, as well the type of relationship that you form. The right partner will be flexible in responding to your needs, provide plenty of variety for growing your inventory, and have the necessary skills and experience within the cannabis industry. Let’s take a closer look at each of these factors to see how they impact the choice of a white label partner.

What types of value-added services can your partner provide?

When most people think about white label partners, they think primarily about sourcing. In other words, can this partner provide the right product (or ingredients to form a product) on a timely basis? But there are plenty of value-added services that partners can provide beyond just sourcing, including co-branding, product development, packaging and distribution.

For example, once your partner has delivered the generic white label product, you might need help transforming that “white box” into a branded product that resonates with consumers. With the help of your partner, you can work on the packaging and overall appearance of the final product, leveraging the expertise your partner already has in the marketplace. Also, if you are looking for new products to fill specific gaps in your existing inventory, you need to feel comfortable that your partner can help out with product development and other issues.

What is the background of the management team?

Just because a company has a slick website doesn’t mean that there is a trusted, experienced management team at the helm. The cannabis industry is still very new, and there are companies trying to carve out a role in this industry without a lot of experience. You should be looking for management teams with plenty of experience in complementary industries (such as alcohol beverage), or with tech or Fortune 500 companies.

You should feel very comfortable that members of the management team are skilled in running the business, and that you won’t have to worry about temporary disruptions in your supply chain. Reliable partners that provide product on time are partners with skilled, experienced management teams.

Does the company offer vertically integrated licensing?

“Vertically integrated licensing” might sound like a lot of corporate jargon, but it basically just refers to the ability to offer the right licenses at every step of the supply chain, from manufacturing to distribution to retail. You should be looking for companies that offer “end-to-end” and “turnkey” solutions that remove all the variability and uncertainty from the process. The cannabis industry is a very tightly regulated industry, and you want to make sure that you have everything in place once the orders start flowing.

A vertically integrated company will have production capability, as well as the ability to distribute. It will also have the ability to source raw materials, and to package and label products before they hit retail shelves. There will not be delays along the way, because all the licenses are in place.

How transparent is the company?

A lack of transparency when dealing with a potential partner should be an obvious red flag. As a result, the best partners will actually invite you into their manufacturing and growing facilities, so that you can see where your cannabis is coming from, and how it is being transformed into different products.

You want to be absolutely assured of quality, and that means having real transparency and insight into the source product. Don’t be afraid to ask for copies of testing reports, or to ask to walk around the facility in order to review operations. It’s all part of building a deeper, lasting relationship based on trust.

How flexible is the company in responding to requests?

While the two terms are very similar, there is a slight difference between white label products and private label products. White label products are generic products that are available on a non-exclusive basis to any retailer, while private label products can be altered or changed according to specific needs of a retailer, and are often exclusive to that retailer. Based on this definition, you really need to be looking for a white label product partner that thinks more like a private label product partner.

For example, what if the white label partner provides cannabis cookies made with straight extracts, but your customers are specifically looking for cannabis cookies made with cannabutter? Some white label partners might not be able to accommodate this request, and you’d be forced to sell the same cannabis cookies that everyone else is selling. However, if your white label partner thinks like a private label partner, you’d be able to receive orders of cannabis cookies made with cannabutter. Problem solved. While your new product would not necessarily be exclusive, it would most certainly be limited.

Another example here is if your buyers are very particular about the types of grows and strains that they want to see in products. Here, you will need a partner that is very flexible and responsive in being able to provide detailed information about how your cannabis is being grown, and from where it is being sourced. This speaks, too, to the need for transparency in the relationship. If there is plenty of transparency into every stage of the supply chain, it should not be difficult providing this data to potential partners.

At the end of the day, the cannabis industry is all about having the right relationships in place, and that extends to your choice of white label partner as well. As detailed above, you should be looking for a white label partner that can provide a variety of value-added services, that has a strong management team in place, that offers vertically-integrated licensing, and that offers full transparency into every step of the supply chain. When all those factors are in place, you will have the right partner for building out your brand and plenty of peace of mind knowing that your partner is flexible and responsive to changing market demands.