It’s complicated: advertising cannabis

by Elizabeth Michael (elizabeth@budagency.co) 920 views 

The Green Wave is sweeping the country. And, no, I’m not talking about Tulane University athletics. It hasn’t been newsworthy in decades.

According to Pew Research Center, 62% of Americans, including 74% of Millennials, said they supported legalizing marijuana. Thirty-three states and the District of Columbia have legalized medical and, in some cases, recreational cannabis. Legal cannabis sales worldwide are expected to hit $57 billion by 2027, according to BDS Analytics.

The industry is growing at a dizzying speed — experiencing growing pains with normalization, and seeing front-runners make headway at establishing the first nationally known brands. The cannabis industry is on the cusp of mainstream, and companies with solid brands and goal-driven strategies backed by data will own the category.

As the cannabis industry navigates out of the shadows, it becomes inherently more competitive. Advertising is one age-old tactic to gain an edge on competitors, but cannabis brands don’t fit into traditional advertising frameworks.

Cannabis advertisers have more to worry about than most brands. They need to consider FCC guidelines, federal and state regulations, and advertising company restrictions, too. Many media companies, like Facebook and Google, have banned cannabis advertising altogether. While creative advertisers have successfully placed ads, the same formula never seems to work twice, and there are no guarantees that ads will be approved. To get around the restrictions, brands need special landing pages and creative, which add additional costs to a campaign that may not run at all.

Restrictions also target organic (unpaid) content. Facebook lifted its “shadowban” on the cannabis industry in October 2018. That meant, up until then, no businesses with “cannabis,” “marijuana,” or related words in the name would appear in Facebook search results. Ironically, the ban made anti-cannabis groups undiscoverable, too. Now, verified cannabis pages appear in search results. In Facebook’s attempt to curb illegal behavior, it continues to remove good cannabis content and, in extreme cases, delete accounts altogether. Just last week, an Oklahoma dispensary emailed Bud Agency for help recovering its Facebook and Instagram accounts that were deleted without notice or recourse.

Arkansas’s advertising laws for the cannabis industry are restrictive but not the most in the nation. Some states, like Maryland, banned advertising altogether. During the 2019 legislative session, Sen. Cecile Bledsoe, R-Rogers,  introduced SB441. In its original form, SB441 would have banned all advertising, publicizing, promoting or marketing of medical marijuana. Thankfully, Sen. Bledsoe amended SB441 to codify the Arkansas Alcoholic Beverage Control guidelines for advertising, with slight tweaks and changes. The major points:

  • Dispensaries cannot target children with cartoons or toys or display consumption.
  • Ads must contain one of four proper, state-written warnings, one of which being “Marijuana is for use by qualified patients only. Keep out of reach of children.”
  • No ads may appear within 1,000 feet of a school or day care, in a public transit vehicle or shelter, or in a publicly owned or operated property.
  • Advertisers must verify that no more than 30% of the audience is reasonably expected to be under 18.
  • No cannabis business may issue coupons, rebates or promotions.
  • No business may display signs with content or symbols related to medicine, like a caduceus or a cross of any color.

Cultivators are not allowed to advertise at all except in certain business-to-business scenarios. Ancillary businesses servicing the cannabis industry are not subject to the same restrictions set forth in SB441, but do need to be mindful of advertising platform restrictions.

As Arkansas’ cannabis industry matures, competition will grow stronger, and brands will need to differentiate to stay relevant. The industry will consolidate as it proliferates. We can look to states such as California and Colorado to know what will happen. The strongest brands come out on top.

Elizabeth Michael is a principal with Bud Agency, a marketing and communications agency exclusively serving the legal cannabis industry. The opinions expressed are those of the author.

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