The Blunt Truth About Marketing Marijuana: Taking an Old Product to Market in a Whole New Way
There are twenty-three states and the District of Columbia that currently have laws legalizing some form marijuana. However, Alaska, Washington, Colorado and DC have legalized marijuana for recreational use. There is a growing emphasis on how to monetize weed and many folks want a piece of this potential money-making machine.
It is no secret that launching a product requires a huge marketing investment in order to effectively engage prospective customers. But how are the newly legal marijuana businesses navigating the restrictions and marketing this old product in a whole new way? Let’s hash it out.
First, there are many regulations that growers, retailers and processors must abide by when it comes to marketing tactics. Since recreational marijuana is illegal at the federal level each state’s laws are different, but restrictions have been placed on signage, location of advertising, news and radio stories, magazine ads, billboards, promotional goods and online marketing. And, the rules change every day. Amanda MacMaster of MacManda Media knows this industry very well. She took on a cannabis client in Denver, CO, L’Eagle Services, and oftentimes her efforts are wasted because the laws are changing so quickly. MacMaster says, “It takes a lot of research and creativity to market in this industry. There have been instances where we’ve followed all of the rules, invested time, money and resources only to have a marketing activity shut down because a law has changed.”
Unlike most other products, a recreational marijuana business that wants to advertise will have to review their state laws and in some cases even confer with their legal counsel. It’s not as simple as running a local sandwich shop that can send coupons in the mail, run their jingle on the radio and advertise their message on television commercials. According to Sue Vorenberg of Main Street Marijuana in Washington State, “the rules for marketing marijuana seem to change from week to week.” Everyone, including the law makers are still trying to figure out what rules apply.
I’ll be blunt, going green isn’t crystal clear just yet, but these budding marijuana entrepreneurs are working their way through the smoky rules and regulations.
If we consider standard product marketing for the marijuana industry, the businesses will first have to treat this as a real business with a real product and put some real marketing (that abide by the restrictions) around it. This means building a foundation by defining their target customer, the problem that this customer faces, how they shop and make their purchase decisions, how this marijuana business is different from the competition and the benefits delivered by the marijuana. All of this will be determined by whether they are a recreational, medicinal, grower or illegal supplier. The recreational user will be much more concerned with the pleasurable experience they will receive at the dispensary and from using the product, while the medicinal user will be focused on whether the product eases their pain. The grower will be marketing to the dispensaries, so they will focus on price, quality and availability. The illegal (or to put it nicely, unlicensed) supplier…well, they may want to avoid the traditional forms of marketing all together. Pricing, positioning and promotional activities can then be defined based on this foundation. Recreational stores must be careful not to cross lines into the medicinal benefits though. According to Vorenberg from Main Street Marijuana “we cannot make any reference to the medical properties of marijuana since we are a recreational store.”
Many of the marketing restrictions stem from the need to avoid any activities that may inadvertently expose minors to marijuana. These include using cartoon characters that may be appealing to children, advertising within a defined proximity of a school, playground or other facility geared toward children and advertising on a public transportation vehicle. However, many forms of modern online advertising are allowed. In the State of Washington, for example, social media, websites, blogs and videos are permitted. Main Street Marijuana, for example, has primarily relied on social media and a website to build awareness. Initiative 502 sets guidelines that any online advertisements should not “appeal to or solicit viewers under the age of 21.” Many of the marijuana websites are similar to alcohol websites where they require an age of 21 to enter, but there is not a true restriction besides simply entering a date of birth. Just like alcohol and tobacco, minors may not be the target, but advertising is pervasive and it’s virtually impossible to avoid exposure to minors.
Even though a form of marketing may be deemed legal, MacMaster has first-hand experience with a Google AdWords campaign being shut down even after speaking with Google and researching the legalities. “The campaign focused on specific, approved words, did not utilize the word cannabis and targeted 21+ in Denver, CO only, but in the end Google shut the campaign down due to words on my client’s website,” said MacMaster. The laws are not defined perfectly and it seems the restrictions are causing marketers to become more creative than ever before. MacMaster is working hard to overcome the hurdles and is finding success by taking an educational approach using newsletters, social media, PR and blogging. As is true for most industries, MacMaster shares that “the key is to work with a niche business in the cannabis market, one that offers a high quality product and ensures high customer services.”
As with any industry you choose to do business with as a customer, vendor or other style of joint venture, there can be big risks and big rewards. The potential to make a lot of money is there, but the decision to do business in an industry that is so heavily regulated with unclear restrictions, ever-changing dynamics and a slew of folks who are adamantly against it could put a marketing agency at risk or it just might put them ahead of the game when the smoke clears.
This is a very interesting industry and to be clear, I am not taking a stance on the legalization of cannabis. I am simply interested in the complexities marketers are facing when taking this well-known product to market in a brand new way.