Tokyo Smoke: How to Take a Brand From ‘Illegal’ to Established

It’s not every day that a black market industry goes mainstream, but that’s what’s happening with North America’s fast-growing cannabis industry. The transition is raising a number of interesting questions on the retail and marketing front, most notably: How do you market a brand as it moves from “illegal” to established?

To find out more about the process, we spoke to Josh Lyon, the VP of Marketing at Tokyo Smoke, an award-winning cannabis retailer in Canada that has earned praise for its focus on design and customer experience. 

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Josh Lyon, Tokyo Smoke

BrainStation: As the VP of Marketing at Tokyo Smoke, what does a typical day look like for you?

Lyon: As cliché as it sounds, no two days are alike. I tend to be in meetings from 8 a.m. to 6 p.m. and they fluctuate between overall brand strategy work, campaign execution, and partnership work. My team and I work closely together to continually push our brand activations forward, think through how to address strategic objectives and improve our owned and paid channels. In an industry that moves so quickly, much of what the focus is revolves around bringing the teams together to work collaboratively.

You have a background in advertising and consulting. Has that experience had any impact on you when it comes to developing a marketing approach/style?

Definitely. Both of those paths helped shape how I approach marketing right now. It’s funny, I started off in marketing at a large agency as an account exec (client services). One of my first bosses, who I’m still friends with today, advised me to get out of the agency world. I was terrible at saying yes to the client without pushing back. I always had the instinct to challenge what we were doing and my consulting/research experience helped me better formulate a way of thinking and articulate how we can strive to do better. Agency gave me a begrudging respect for process and consulting helped me breakdown problems and articulate a central vision to rally around. 

What are some of your favorite marketing campaigns?

I’ve always been a huge fan of Nike’s work. Their ability to mesh functional with emotional is always impressive. The somewhat recent Kaepernick campaign was fantastic. As a brand, it can be hard to take a stand. You have to be prepared for the backlash and difficult conversations. 

The work North Face did during the 50th anniversary was also quite amazing. Essentially, their core assets were simply a look at the consumer. The consumer-centric message plus pure beauty of what they created really resonated. Your community is your best conduit and North Face nailed that.

What would you say are the core elements of Tokyo Smoke’s marketing strategy?

First off, it really starts with the pillars of design, community, and education. Cannabis is in an interesting place where so much is happening at a rapid pace and you have people hungry for information. We’ve positioned education in a manner that is as engaging as it is informative. Not only is it providing what consumers need to know to confidently navigate the cannabis space but it’s also creating events and activations that people are excited to take part in.

Secondly, we use design to open up and facilitate conversations. Cannabis usage, for many, has been hidden. By providing design-forward, high functioning products, we’re encouraging people to be proud of the association with cannabis.

You have a large following on social media. How did you go about building a community on these platforms?

It really started grassroots. In the cannabis space, you can’t simply pay to boost your posts and expand your audience. We have always partnered with local creators. This allows them to have another creative outlet, likely in a new space, and it opens our brand up to new communities. On top of that, we design digital content that people are choosing to interact with, being meticulous about how we represent not only our brand but cannabis, cannabis accessories, and educational information. 

When a community feels like they have some ownership with what you’re creating, they are more inclined to share and become that ambassador you need to grow a brand in an environment that isn’t simply pay to play.

What platforms have been most beneficial for brand building? Why do you think that is?

For us, it’s been a combination of the digital and physical. Of course, digital allows for more mass reach. Specifically, the visual nature of our brand lends itself well to Instagram, where we can showcase the thoughtful design of our products, events, stores, and educational content. In-store and in-person, though, have likely been the most beneficial. This is what allows for true connections to form and for communities to build. Our stores have also helped open the dialogue between us and the community, allowing us to listen and adapt. The physical environment is the truest way we bring our brands to life – fully immersive and created with a consumer first mentality. 

The cannabis industry is quickly growing but still emerging – how has its relative newness influenced your marketing strategy?

The overall strategy isn’t so much impacted, more so your process. You have to be incredibly nimble, both to consumer needs and changing regulations. Plan for option A and be prepared that you’ll have to go with option B or C. You also have to place strategic bets as to what will work given there’s not much industry data out there just yet. A beautiful model of marketing effectiveness has yet to be established.

You’ve been in the unusual position of taking a brand from ‘illegal’ to ‘established.’ How did you approach that process?

It was something new for me and most I’m sure. In the unsexiest terms, it’s information dissemination. As the transition happened, Canadians were incredibly excited but confused as to what was legal and what was part of the illicit market. Despite the move to legality, many were still hesitant to explore the industry. It was evident that we needed to not only continually educate on the changing regulations but also provide a welcoming environment. This encouraged people to ask questions, explore, figure out what was and wasn’t legal and, if they so choose, how to take part in the legal industry. Overall, the biggest thing was creating trust. Cannabis is dealing with decades of stigma and misinformation and that’s a lot to overcome. These comfortable environments help to break down the stigma and create a place where people truly felt comfortable.

What would you say has been the biggest challenge of that process? 

We’re working with a lot of ingrained behaviors, whether it’s how people purchase cannabis or their thoughts on the plant. If you want someone to modify their behavior, you have to provide an equal or, more likely, a better option. In a highly regulated industry, you can’t always control the totality of the consumer journey, both the purchase process as well as the information dissemination. 

As previously mentioned, there’s a ton of questions that people have and we can’t always provide all the answers. That’s tough when you’re trying to build that trusting relationship. For us, it’s been about listening – providing as much information and education as we can within the current framework and finding partners who can complete the totality of the informational ask in areas we can’t address.

How did you go about tackling negative perceptions of cannabis and the industry as a whole?

First off, there are a ton of people who have been working at tackling the negative perception for decades. There are pioneers, such as Hilary Black, who have worked tirelessly on behalf of cannabis. They are the ones who really started this conversation. 

For us, it’s the realization you’re never going to force someone to change their mind. They have to be open to it. What we can do is shine a light on cannabis in a way that, hopefully, makes people take another look. Whether that’s highlighting its many uses, the incredible medical potential or the diverse nature of cannabis users. It’s been portrayed in one way for so long. If roughly a quarter of Canadians are consumers, how then, can cannabis adhere to such specific stereotypes? We are simply showcasing how beautiful cannabis and the community around it are. 

As one of the first retailers for cannabis products in Canada, you are, in many ways, setting the standard for the industry’s in-store retail experience. What was the thought process behind the design of the Tokyo Smoke stores? What sort of experience were you hoping to create?

The stores are purposefully designed. By that I mean, everything is there for a specific reason vs. simply being decorative. First and foremost, you want it to be an inviting environment where visitors are both comfortable to shop and excited to take part. Despite cannabis being ‘new’, we also have to realize that, because it’s been around so long, shoppers actually have a highly varying degree of knowledge. We wanted to ensure a smooth experience for novices, moderate, and expert consumers. As such, you can have one-on-one consultations if you’re new, self-navigate our education bays if you’re looking to learn a little more or be quickly checked out through our staff with tablets if you know what you’re looking for.

We also made sure to include little moments of delight throughout. Our budcarts, which highlight new and interesting things in-store, terpene bars where you can start to get acclimated with the varying scents of cannabis and digital screens not only highlighting store features but also the latest Tokyo Smoke creative. The journey of purchasing cannabis through a Tokyo Smoke should be additive to the overall cannabis experience.

As states legalize cannabis and the industry grows, how do you see Tokyo Smoke’s digital strategy changing in the future?

Having a channel that can be viewed by any legal age and up poses an interesting challenge when provinces, states, and countries have different laws and regulations. What you can and cannot do varies as does your actual product/service mix in each location. Our digital strategy will have to continually evolve to meet the wants of the majority while still providing the relevant information for local markets. This will put an even stronger emphasis on CRM efforts.

From a paid perspective, it will be interesting as more platforms allow for cannabis marketing. At some point, I expect our marketing toolbox to more closely resemble that of traditional companies. As this happens, we’ll have to continually monitor our media partners to ensure we’re spending with the right partners. If there continues to be large discrepancies between countries (in terms of regulations), working with partners who understand the ecosystem and will work with you to adapt and adjust is tantamount for success.

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What skills do you believe will be most important as the cannabis industry grows and evolves?

Adaptability and comfort with ambiguity are still quite important as the industry continues to evolve. You must be comfortable establishing processes but also forging ahead where they may not yet be one present. In less than a year’s time, the cannabis industry is going to have a wide swath of available product formats and a hugely diverse set of reasons people choose to integrate cannabis into their lives. Data-driven segmentation and journey mapping, like we see in other verticals, will only rise in importance. Finally, this isn’t a hard skill, but a passion. This is not an easy industry to work in. Those I’ve seen achieve the most success truly care, both about the plant and their role in telling its story.