The Future Of Digital Marketing In A Growing Marijuana Industry

Adver­tis­ing restric­tions make mar­ket­ing cannabis dif­fi­cult, but not impos­si­ble.

Lisa Lacy By Lisa Lacy. Join the discussion » 2 comments

When Ore­gon legal­ized mar­i­jua­na ear­li­er this month, it became the fourth U.S. state to sanc­tion recre­ation­al use. Despite the sheer size of the grow­ing mar­ket, which cannabis indus­try investor net­work ArcView Group esti­mates is around $3.5 bil­lion this year, there is no doubt this is a unique moment in both busi­ness and adver­tis­ing while the indus­try remains ille­gal at the fed­er­al lev­el.


A ‘Once-In-A-Generation’ Opportunity

This is an oppor­tu­ni­ty that comes along once or twice in a gen­er­a­tion,” said Chris Walsh, man­ag­ing edi­tor of the Mar­i­jua­na Busi­ness Dai­ly, a busi­ness pub­li­ca­tion that cov­ers the U.S. cannabis indus­try. “From a busi­ness per­spec­tive, from the ground up, there’s tens of bil­lions of dol­lars in poten­tial.”

And those busi­ness­es will need adver­tis­ing exper­tise to reach their tar­get mar­ket.

There is — and it will grow at a dra­mat­ic pace – a brand new mar­ket­ing cat­e­go­ry called ‘mar­i­jua­na,’” said Peter Lev­i­tan, CEO of strate­gic agency Peter Lev­i­tan & Co. and an investor in two med­ical mar­i­jua­na dis­pen­saries. “This did not exist two years ago.”

Cannabis Cowboys And Indians

But Richard Lewis, NYU mar­ket­ing pro­fes­sor and author of a book on med­ical mar­i­jua­na, also notes that until the fed­er­al gov­ern­ment gives its bless­ing, “It’s a lit­tle bit of cow­boys and Indi­ans. There’s always going to be out­laws who try to get in ear­ly and sort of [skirt] the law and then some will make mon­ey, but it’s still a few years away.”

For his part, Kris Krane, a man­ag­ing part­ner at 4Front Advi­sors, a mar­i­jua­na busi­ness con­sult­ing firm, esti­mates legal­iza­tion will hap­pen “some­where between three and 20 years, but prob­a­bly on the short­er end of that.”

He sees 2020 as a big year, par­tic­u­lar­ly since 2016 will see legal­iza­tion bal­lot issues in numer­ous states, which could help to change the polit­i­cal con­ver­sa­tion and even get the back­ing of some politi­cians if they see the issue as a pop­u­lar one. But, at the same time, he notes the U.S. will get a new pres­i­dent in 2016, which could also have a huge impact on how legal­iza­tion plays out.

Walsh agrees that before the mar­i­jua­na indus­try reach­es its true poten­tial, it will have to either become legal on a fed­er­al lev­el or the fed­er­al gov­ern­ment will have to for­mal­ly give states pow­er as, at the end of the day, it’s still an ille­gal sub­stance, which throws up a lot of hur­dles of adver­tis­ing and mar­ket­ing.

A Great Opportunity’ For Agencies

And that explains the hes­i­tan­cy from some ad agen­cies to touch the bur­geon­ing indus­try while it is fed­er­al­ly ille­gal even though it is like­ly a tempt­ing space. And this means there’s some­thing of a David and Goliath sit­u­a­tion with an oppor­tu­ni­ty for small­er agen­cies to cap­i­tal­ize while the Goliaths’ hands are tied.

Accord­ing to Lewis, small­er agen­cies will like­ly dig in first because they have less to lose. And larg­er agen­cies aren’t going to fol­low until the indus­try is “on very sol­id ground.”

Agency Vladimir Jones is per­haps a good exam­ple. It has worked with mar­i­jua­na-infused prod­ucts brand Dix­ie Elixirs.

Krane agrees this is like­ly more fer­tile ground for small­er bou­tique agen­cies, point­ing to the large cor­po­rate clients of big agen­cies that might be less com­fort­able with mar­i­jua­na, as well as small­er firms pop­ping up that cater specif­i­cal­ly to the cannabis indus­try.

That includes Ore­gon-based Maya Media Col­lec­tive, as well as Col­orado-based Cannabrand.

In one sense, it’s legal, but in anoth­er sense, it’s incred­i­bly ille­gal and there’s this ten­sion that is mak­ing it either very dif­fi­cult for some peo­ple to mar­ket in the indus­try or a great oppor­tu­ni­ty because some peo­ple are savvi­er than oth­ers,” Lev­i­tan said.

But Saman­tha Chin, direc­tor of mar­ket­ing at PotGuide.com, a mar­i­jua­na-focused trav­el guide, doesn’t think major agen­cies will stay away much longer.

Yes, there is still a stig­ma around the ‘green rush’ but as we’ve seen in Col­orado in 2014, the state received over $60 mil­lion from tax­es, licens­es, and fees. Sim­ply put, mon­ey and oppor­tu­ni­ty talk. So as legal­iza­tion con­tin­ues to spread across the coun­try, more and more busi­ness­es are going to need mar­ket­ing and adver­tis­ing efforts to help them stand out among the com­pe­ti­tion,” Chin said via email. “I think of the cannabis indus­try like the lat­est dig­i­tal age – if you’re not online and using dig­i­tal and social media mar­ket­ing to cre­ate incred­i­ble brand aware­ness, then you’re real­ly late to the game.”

Once a state legal­izes med­ical or recre­ation­al use and busi­ness­es open up and they are heav­i­ly reg­u­lat­ed, accep­tance lev­els rise dra­mat­i­cal­ly, Walsh said.

I hear through­out the indus­try with any­thing – lawyers, con­sul­tants, soft­ware firms – and a lot of areas of the coun­try, this is still a very frowned upon prod­uct and indus­try,” Walsh said. “But in the last cou­ple of years, per­cep­tions of the indus­try are shift­ing.”

Marketing An Illegal-ish Product Online

But offend­ing con­ser­v­a­tive clients and/or con­sumers isn’t the only risk/challenge.

Adver­tis­ing restric­tions make mar­ket­ing mar­i­jua­na even more dif­fi­cult.

Walsh notes that when dis­pen­saries first start­ed sell­ing med­ical mar­i­jua­na in Col­orado sev­er­al years ago, there weren’t any rules and so dis­pen­saries were adver­tis­ing via sign spin­ners on street cor­ners with mes­sag­ing about half price joints and the like, which led to pub­lic back­lash, so the state end­ed up step­ping in and reg­u­lat­ing mar­ket­ing and adver­tis­ing. And when legal recre­ation­al use fol­lowed, mar­ket­ing and adver­tis­ing restric­tions were already built in, Walsh said.

Basi­cal­ly, the idea is that they can’t be in your face. You don’t see adver­tise­ments for mar­i­jua­na dis­pen­saries on TV, for instance,” Walsh said. “And even in a mature indus­try, it’s high­ly reg­u­lat­ed, so you can’t be in a pub­lic space and part of the indus­try is real­iz­ing we have to be care­ful with how we adver­tise our prod­ucts because we do cre­ate back­lash and more restric­tions.”

An addi­tion­al chal­lenge with mar­i­jua­na in par­tic­u­lar is online adver­tis­ing in that major ad net­works like Google won’t run ads from mar­i­jua­na-touch­ing busi­ness­es.

Lewis said he tried to adver­tise his book, “Pot Luck”, on Google, Bing and Face­book, but they wouldn’t take the ads.

You would think a book would be a fair­ly legal prod­uct,” Lewis said. “I just thought it was horse­shit, but that’s how it is. Real­ly, we’re still in the fron­tier sec­tion of this busi­ness and it’s still ear­ly.”

Again, this will like­ly change with fed­er­al legal­iza­tion and, Walsh observes, busi­ness­es can still adver­tise mar­i­jua­na con­fer­ences on Google and almost every mar­i­jua­na busi­ness has a Face­book page.

Building Brand Awareness & Driving Traffic

As a result, Walsh said a lot of mar­i­jua­na adver­tis­ing is rel­e­gat­ed to the back pages of alter­na­tive week­ly news­pa­pers, as well as mar­i­jua­na-focused mag­a­zines like High Times.

Web­sites are one means of being found via search. Good old-fash­ioned SEO is anoth­er option, accord­ing to Krane.

Google won’t block you from search results. You can still do tra­di­tion­al SEO and you can have a Face­book page,” Krane said.

In addi­tion, Lev­i­tan points to cannabis-friend­ly ad net­work, Man­tis, which col­lates a large num­ber of mar­i­jua­na-relat­ed web­sites and has built out its own web­site.

Chin cites oth­er online adver­tis­ing options like Adis­try, which show dis­play ads on sites like PotGuide.com.

That’s a busi­ness mod­el direct­ly attack­ing the prob­lem that Google won’t let you run ads on Google and Face­book won’t let you run mar­i­jua­na ads on Face­book,” Lev­i­tan said.

Also, indus­try-spe­cif­ic sites like Leafly and Weedmaps, which, like Yelp, offer reviews of dis­pen­saries, “real­ly help dri­ve traf­fic, espe­cial­ly at the retail lev­el,” Krane said.

Leafly even took out a full-page ad in the New York Times last year.

In addi­tion, there’s the Cannabis Mar­ket­ing Plat­form, which says it lever­ages audi­ence data, along with media knowl­edge and pro­gram­mat­ic buy­ing capa­bil­i­ties to dri­ve foot traf­fic, build brands, and expand dis­tri­b­u­tion for com­mer­cial cannabis busi­ness­es.

Cannabis-relat­ed brands are forced to either take a risk by pro­mot­ing their con­tent on plat­forms with unclear rules, or sim­ply be more cre­ative when it comes to catch­ing the atten­tion of a con­sumer on a busy news­feed, etc.,” Chin said. “High qual­i­ty con­tent mar­ket­ing is king right now, no mat­ter what busi­ness you’re in. Again, I see some type of shift hap­pen­ing soon­er than lat­er.

With this mar­i­jua­na boom, comes a flood of relat­ed ancil­lary prod­ucts and ser­vices – all of which will have a bet­ter chance of mar­ket­ing online than some­one who is direct­ly touch­ing the plant,” Chin said. “These, and a lot of the major (niche/designer) brands, will help pave the way for increase in cannabis inter­net mar­ket­ing in the future.”


What do you expect in the future of dig­i­tal mar­ket­ing for the mar­i­jua­na indus­try?

Lisa Lacy

Written by Lisa Lacy

Lisa is a senior features writer for Inked. She also previously covered digital marketing for Incisive Media. Her background includes editorial positions at Dow Jones, the Financial Times, the Huffington Post, AOL, Amazon, Hearst, Martha Stewart Living and the Dian Fossey Gorilla Fund.

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