In addition to the omnipresent business struggles that many startup companies face, cannabis businesses must also tackle rigid marketing and advertising regulations that relegate them to many of the ideal traditional media outlets. These strict laws are in place to protect the youth, but federal prohibition makes performing cannabis business practices especially difficult.
Furthermore, each state has a unique set of advertising laws that can make cannabis branding and scaling a business a lot more difficult than it has to be. Cannabis marketing and business struggles span far and wide, but Leafbuyer's here to give you the run-down.
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Cannabis Media Blackout
One very major problem that the industry faces is the fact that cannabis marketing is banned on major social media networks including Facebook, Instagram, Twitter, Pinterest, and more. A single cannabis-related ad could get a business's entire profile removed without warning or the ability to get it back. Social media giant Facebook has consistently deactivated pages of marijuana companies, many times without a proper explanation.
Dan Osterman, marketing manager for Nice Guys Delivery, told Marijuana Business Daily that he had lost his account six times and consequently lost over 4,000 followers in the process. His three-month-long attempt to reactivate his accounts proved futile. Many business owners suspect that competitors flag content as an underhanded way to gain an advantage in the market.
Sometimes, social media filters aren't as refined as they should be and, in-turn, lead to cannabis companies getting their pages banned for no reason. These pages can eventually get reinstated, but in the meantime, these companies obviously lose revenue. In recent years, many business in the industry have turned to alternative media platforms dedicated to cannabis topics to promote their products, but these don't reach nearly the same audience as other tactics, such as a television ad, would.
Instagram Policies for Cannabis Pages
Many cannabis brands naturally gravitated toward Instagram's photo-friendly feed to showcase their buds and sleek, innovative products. Technically, Instagram allows cannabis advocacy-related posts, but users can't post anything that promotes selling cannabis-derived products. Cannabis businesses that put their location or phone number in their profile could risk getting their page removed since it can be seen as advertising marijuana.
Google's Ban on Cannabis Apps
Cannabis businesses are being restricted form advertising on nearly all fronts. Google banned cannabis-related apps from its app store, so anyone with an Android device is unable download and use home-delivery apps or any cannabis-related services. Google's statement read "we don't allow apps that facilitate the sale of marijuana or marijuana products, regardless of legality."
Google will specifically take down apps with a shopping cart feature that allow users to order marijuana or other cannabis products. Apps that assist home-delivery or streamline the sale of THC products will also be removed from Google's app store. Apple's app store also doesn't allow apps that facilitate the sale of illegal drugs (which marijuana is considered to be on the federal level).
Traditional Media
Individual states often have additional rules around marijuana companies advertising in certain areas such as by schools or daycare centers. Some laws also prevent companies from making products with cartoon images that are more appealing to children. Additionally, advertisements must always clearly state that the products advertised are intended for those over 21 years of age.
Cannabis marketing can vary depending on a particular state's cannabis regulations. For example, if cannabis companies want to advertise in California via the radio, cable, print, or digital ads, they must ensure that the ad is shown where at least 71.6 percent of the audience is over 21 years old. Delaware's rules are even more harsh, completely banning medical cannabis ads via print, broadcast, or in-person solicitation.
Billboards are the advertising mechanism of choice for many major marijuana companies. Historic billboards are still found throughout metropolitan areas, which are successful at drawing extra attention, but as legalization becomes the norm, billboards may lose their relevance as the cannabis marketing landscape hopefully becomes increasingly digital.
Other Constraints on the Cannabis Industry
Banking Limitations
The federal government classifies cannabis as a schedule 1 substance, which prevents financial institutions such as banks and credit card companies from working with marijuana companies. Scarce banking options has resulted in a completely cash-based industry vulnerable to criminal activity. Fortunately, new strides in Congress may allow banks to work with cannabis businesses in the near future.
False Health Claims
Cannabis companies, especially CBD companies, can get caught making unsubstantiated health claims through their packaging or marketing efforts, and can be either banned or punished in terms of SEO as a result.
CBD-infused products can be found nearly everywhere from kombucha to fast-food burgers. Forensic toxicologist Michelle R. Peace told the New York Times, "people are taking these products in good faith, because they believe somebody is overseeing the quality of these products, but there's basically nobody." The hype surrounding CBD has created expectations of a miracle cure, but any specific claims about potential benefits without proper evidence can really hurt a company in terms of their marketing.
Cannabis companies are known to use health-conscious verbiage that can often tout cannabis' health benefits without having to provide concrete scientific evidence. Unfortunately, federal prohibition makes cannabis research difficult to perform. The Food and Drug Administration (FDA) has taken action by issuing warning letters to companies that sell CBD-infused products claiming to relieve anxiety, inflammation, pain, seizures, and other medical conditions.
So How Can Cannabis Business Market Themselves?
Creative Strategies
With so much untapped revenue at stake, cannabis companies must develop a long-term and strategic marketing and branding plan that can cut through the crowded market. One of the most crucial aspects of cannabis marketing to expand a company's reach is premium branding, design, and packaging details. Companies are actively trying to shed the stoner stigma by adopting sleek and minimalist packaging to fit in with mainstream brands.
Cannabis marketing strategies require an emphasis on education and relationships. Educating the public about cannabis helps to remove the stigma around the plant's illegal past and guide customers toward a safe consumption experience. While many marketing agencies continue to shy away from working with a federally illegal product, there are more and more new companies popping up that are actually specializing in this sector.
Experiential Marketing
In light of a social media ban from major platforms such as Twitter, Facebook, Instagram, and YouTube, cannabis brands are focusing on experiential marketing techniques to connect with customers. Hosting booths at farmer's markets, expositions, and other gatherings to meet with health-conscious consumers, as well as fun activities or interactive spaces, can help to draw the eye of new customers and expand a company's reach with user-generated content.
Educational seminars are also a great way for companies to teach local communities about the use of cannabis as a medicine. Cannabis is full of therapeutic cannabinoids and terpenes, but useful facts such as these are not as well-known among the general public as they should be. Demystifying these compounds helps companies become more accessible to a wider audience.
Influencer Marketing
Word of mouth is still considered a worthy marketing tactic, but it can be largely out of the company's hands. However, collaborating with influencers, journalists, thought leaders, and bloggers in the industry is a newer, but popular and successful, marketing tactic allowing companies to reach a targeted set of consumers and providing them with a real-world example of how cannabis has helped individuals that they follow and trust. Branded sponsorships can put companies in front of thousands of people who already love cannabis and make them aware of your brand.
The cannabis advertising and marketing landscape is heavily regulated, but regulators are beginning to learn how to deal with this nascent industry. Companies and even entire counties are hiring top-notch consultants and marketing experts to help tell a story and establish a brand with a strong ethos to stay ahead of the competition. Everything from branded merchandise to in-store educational seminars could cement a company's presence and offset current marketing limitations. As rules continue to change, business owners must remain nimble to stay afloat.
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