Cannabis producers are among the least reputable corporations in the eyes of Canadians – ranking alongside petroleum companies and others – largely because they remain unknown to the general public, according to a new survey measuring the reputations of nearly 300 businesses operating in Canada.
Still, that’s a small improvement over the previous corporate reputation surveys conducted by Leger, a Quebec-based market research and analytics firm.
“If anything, their reputation has been dropping slightly over the last little while,” Dave Scholz, executive vice president at Leger, told MJBizDaily in a phone interview.
“This is the first year we actually see an increase – it went up collectively by one point on our reputation scale.”
Leger’s reputation study applies a reputation “score” to determine the most reputable companies in Canada all the way down to those held in the lowest esteem.
The reputation scores of the biggest marijuana producers in Canada reflect the fact they’re far from being household names, although the companies could take some steps to burnish their corporate reputations in the eyes of the general public.
Being unknown brings as much opportunity as it does a risk.
“If something bad happens in the cannabis industry, I don’t want people to automatically assume that applies to everybody,” Scholz said.
“So creating that corporate identity that separates you, and raises you above, allows you to have a safety net.”
The new report – which ranks 288 companies operating in Canada – also sheds light on why cannabis producers have thus far failed to differentiate themselves from one another.
From Dec. 6, 2021, to Jan. 24, 2022, the survey asked more than 38,000 French- and English-speaking Canadians for their perspectives on companies across 30 different sectors.
Shoppers Drug Mart, a national pharmacy chain that currently operates an online medical cannabis marketplace, topped the “most reputable” list, followed by consumer electronics giants Sony of Japan and Samsung of South Korea, respectively.
The top-ranked cannabis companies were Edmonton, Alberta-based Aurora Cannabis, which ranked 180th overall, and Smiths Falls, Ontario-based Canopy Growth Corp., which was 186th.
Those rankings put those two companies in the neighborhood of Canadian online investment management service Wealthsimple and social media giant Facebook.
However, all the other cannabis companies ranked between 230th and 280th among the 288 companies included in the survey.
That put them in the company of Canadian oil and gas producer Irving Oil and Houston-based pipeline operator Kinder Morgan.
Ranked at the bottom of the list were Chinese multinational technology corporation Huawei and scandal-plagued engineering company SNC-Lavalin, based in Montreal.
The margin of sampling error for all respondents in a survey of this size is plus or minus 2.1 percentage points. Each company was evaluated by approximately 2,100 respondents.
‘People just don’t know them’
One of the biggest hurdles for cannabis producers is the general public still doesn’t know who they are, the survey’s data shows.
“The big factor is people just don’t know them,” Scholz said.
“That awareness piece is huge in the reputation world. You look at Aurora, which has the highest rating, only 42% of Canadians say they’re even aware of them.”
For Aurora, the top-ranked cannabis company, 42% of respondents had at least some “awareness” of the company. (In this case, awareness is “good opinion” plus “bad opinion” plus “does not know enough.”)
In particular:
For Tilray, one of the leaders by market share, awareness was only 24%, according to the survey:
Hexo Corp., another leader in the industry, had awareness among 27% of respondents, with 73% not knowing enough, or anything, about the company.
Scholz said the data points to a lack of overall awareness of the businesses by the general population.
Without a good corporate reputation, it’s hard to differentiate your organization, he said.
“It isn’t just what Aurora does or Tilray. It’s what everyone does that affects public thinking of the industry,” Scholz said.
“We haven’t differentiated any one of these organizations yet.”
The ranking also included corporate entities that have combined with other cannabis companies or were bought outright, such as The Supreme Cannabis Co. and Newstrike Brands, which ranked 242 and 267, respectively.
Supreme was bought by Canopy in 2021; Newstrike was folded into Hexo in 2019.
Organizational awareness
Scholz said Canadian cannabis companies could be doing more to increase the organizational awareness among the general population.
That could help their bottom lines, he said.
“It’s been four years since we’ve had cannabis legalization, and organizations have not put a lot of effort or work into growing their corporate brands,” Scholz said.
“Regulations are tough, and they can’t run ads in the same way that other organizations can, but there are ways they can grow that name, and they just don’t seem to be doing it.”
He said it’s difficult but not impossible.
“It’s about talking about your corporate brand in ways that the regulations allow as much as possible.
He suggested a lack of overall awareness means cannabis companies could be losing out on what he called the “halo effect” – positive results from a good reputation.
He said if consumers have a positive impression of your organization, “you’re more likely to learn about them and want to read about them, you’re more likely to fixate on that story because you think they’re a good organization. You’re more likely to want to work there, you’re more likely to recommend their product.
“All of that translates into a positive bottom line.”
SOURCE: MJBizDaily
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