While the growth of – and increasing public support for – legal marijuana is clear, the rules associated with marketing legal weed remain cloudy.
Cultivating cannabis has become a booming business since the advent of its legalization in several states across the nation. While only 10 states plus the District of Columbia have legalized cannabis for recreational use, 33 states now allow the sale and use of cannabis for medicinal purposes.
As the cannabis legalization wave continues to swell over the United States, its use remains illegal at the federal level, complicating how legitimate cannabis businesses do their banking, file their taxes, and promote their products. In addition, state laws regulating how cultivators and dispensaries may advertise their services vary widely, thickening the legal quagmire.
Though all members of the canna-business benefit from consulting with qualified legal counsel, there are some guidelines businesses can follow to get the word out while still steering clear of penalties.
The Importance of Advertising
You could be sitting on the cure for cancer, but if no one knows you have it, you won't make a dime. Advertising and marketing remain a popular deduction come tax time for good reason. Marketing your brand is simply part of the cost of doing business.
Advertising builds brand awareness, and consumers are more likely to purchase from a company they trust. The importance of name recognition cannot be overstated. To understand just how powerful building brand recognition truly is, consider the last time you cleaned out your ears. Did you call the little cardboard stick with cotton on either end a cotton swab or a Q-tip? Some brands become so ubiquitous the names of their products become part of the common lexicon, which is every marketer's dream come true.
Challenges Faced by the Cannabis Industry
When most people think of marketing, they envision things like television ads with catchy jingles, billboards along highways, and pop-ups and sideline advertisements on the web. However, many of these traditional advertising avenues create legal quagmires for those in the cannabis industry.
For example, the Federal Communication Commission (FCC) governs what types of advertisements may be shown on TV. Certain kinds of ads can only be shown during specific hours to avoid the risk of children viewing them. Because most television programming crosses state lines, those in the cannabis industry run the risk of prosecution should their ads be viewed in a state where it remains illegal.
In addition, because cannabis remains illegal at the federal level, the United States Postal Service prohibits the mailing of cannabis-related advertisements.
Advertising becomes even murkier when state laws come into play. For example, in California, cannabis is legal for both recreational and medical purposes, but advertisements such as billboards may only be placed in areas where at least 71.6 percent of the intended audience is 21 or older. Anywhere that has a school or day care nearby remains out of reach to cannabis marketers.
Finally, the largest social media outlets, Facebook and Google, both have instituted a policy prohibiting the advertising of cannabis on their platforms. While these are private entities with the rights to make their own rules, due to the potential risk of liability, they will likely not change their advertising policies until and unless cannabis becomes legal at the federal level. Even advertising in local newspapers that don't regularly cross state lines is considered too risky by many due to the risk of federal prosecution for drug trafficking.
Effective Marketing for Cannabis Entrepreneurs
With so many restrictions on where they may advertise, how can those in the canna-business get their names out there? Doing so takes a bit of extra creativity.
Smart marketers know it costs far less to keep repeat customers than it is to attract new ones. Repeat customers also help build brand-name recognition because they often recommend businesses they love to their friends and family. Nothing creates more trust among potential new customers than a recommendation from someone they personally trust.
Medical cannabis businesses have an advantage here: Whenever a new patient registers at a dispensary, they are often asked to provide a preferred contact method consisting of email, text, or phone. Cannabis business owners can then use those specific contact methods to blast announcements of special deals and offers directly to their patients. To attract new customers, businesses can extend "bring a friend" special deals right to the populace they already serve.
Medical cannabis websites offer other advertising avenues for those in the cannabis business. Cannabis information sites allow the placement of website banners and ads that catch the eye of those interested in medical cannabis. For a modest fee, some websites will even create an entire marketing campaign including sending regular emails to consumers. This win-win solution allows cultivators and dispensaries to focus on creating better strains and products instead of spending their limited time running their own email and text campaigns.
The federal status of cannabis coupled with conflicting state laws creates challenges for those in the cannabis marketing community. However, with a bit of innovation, it is possible to build engaging advertisement campaigns that do not run afoul of the law.
This article was contributed by Kacey Bradley.