/ An inside look at the business of digital content
The cannabis business is booming. So how about the cannabis ad business?May 2, 2019 | By Maureen Morrison, Independent Marketing Consultant @maureenmorrison
Do a search for cannabis-related articles and thousands will come up in the results. And with good reason: Recent years have seen the legalization of it in 10 states now, with 33 states allowing marijuana for medical use. This has given way to countless articles written about the burgeoning legal industry and startups offering cannabis and CBD products.
Billions of investment and consumer dollars are flowing into the legalized cannabis space. Last year, legal cannabis was a $10.4 billion industry in the U.S., employing a quarter of a million people, according to New Frontier Data, a cannabis market research firm. According to a report from the Associated Press citing New Frontier Data, “Investors poured $10 billion into cannabis in North America in 2018, twice what was invested in the last three years combined… and the combined North American market is expected to reach more than $16 billion in 2019.”
But for all the explosive growth of this new and legal market, the advertising part of the equation has not kept pace. The largest digital platforms don’t allow cannabis ads. Cannabis articles may appear on many publishers’ sites, but few allow advertising of these products. The fact is that cannabis is still a Schedule I drug in federal law, and the Controlled Substances Act of 1970 prohibits advertising and selling of such products. State laws vary widely, causing many with ad space to sell to err on the side of safety.
It’s no surprise, then, that many of the publishers reached for this article just don’t allow cannabis advertising, particularly in national publications. One major publisher with a number of popular titles said that it doesn’t accept cannabis advertising. Though it does accept ads for topical cannabidiol (CBD) oil products to the extent allowed by law.
Publishers leery of cannabis ads
Meredith Corp. said that it doesn’t accept any marijuana or cannabis-related products (including Marijuana-based THC, Cannabinol [CBN] or CBD products) or any other product that’s illegal under U.S. law. One exception the company now allows is Epidiolex, which contains CBD and has been approved by the FDA to treat childhood epilepsy and can be legally advertised for such use under federal law.
Meredith said it also now accepts industrial hemp-related products, including Hemp-based CBD or CBN products, with THC content of 0.3 percent or lower. Hemp products of this sort were previously illegal under the Controlled Substances Act. However, they were made legal under the 2018 Federal Farm Bill, enacted in December 2018.
There’s more leeway on the local publication front. Local newspapers and publications in states where cannabis is legal for recreational use may have an easier time accepting ads, depending in state law. The Seattle Times, for example, accepts cannabis advertising.
“Cannabis advertisements are reviewed by our staff to ensure they meet our general advertising creative and copy policies. There are Washington State rules for this category of advertising, and we comply with those requirements,” said Gary Smith, VP of advertising at the Seattle Times. “While there are complexities around accepting this type of advertising, it has been a growing part of our overall client mix. And we’ve had very few customer complaints associated with the inclusion of this ad content in our products.”
Is the duopoly doing it?
Publishers need not worry that they’re losing out on cannabis ad dollars to Google and Facebook. Both have shied away from allowing cannabis ads. Google’s policies state that ads promoting products that alter mental state for recreational use, including “legal highs,” are prohibited.
Facebook similarly prohibits such ads, though the company reportedly formed a group to “examine its approach to cannabis,” which suggests that it could be moving towards a more permissive stance. In the meantime, state legal cannabis businesses are allowed to create verified business pages on Facebook, and appear in search results (they were previously blocked from search),” according to Bloomberg Law.
Varying state laws are a hurdle for brands that want to market cannabis products in multiple states where it’s legal. And given that that Google and Facebook don’t allow cannabis ads, and that many publishers shy away from them, Cannabis brands often rely on outdoor advertising and sometimes even events.
The brand perspective
Jason Deland, co-founder and chairman of cannabis brand Dosist and founding partner at ad agency Anomaly (which handles advertising for Dosist), said that their media strategy has largely prioritized outdoor advertising for creating awareness. Zoned areas that allow for outdoor cannabis advertising in California have helped Dosist build its brand, as has its retail location on Abbot-Kinney Blvd. in Los Angeles’ Venice Beach.
Dosist has also had event partnerships with Barry’s Bootcamp, with messaging focused on sleep and the health benefits of cannabis. The company also has advertised with Cannabis-friendly publications like High Times. As for social media, Deland says that Dosist creates organic content on its own pages.
Other brands have tried to circumvent the social media ban on cannabis ads by using influencers to promote their products or promoting prices on their own social accounts. However, that can have its own set of headaches and influencers can sometimes have murky return on investment.
For now, it seems like unless there is a change to the categorization of cannabis at the federal level, most companies with ad space to sell won’t allow cannabis advertising anytime soon. There are the rare exceptions of course, as noted above with Epidiolex, and more of those may come in the future as pharmaceutical companies look to get more cannabis-related drugs approved. Others are hopeful that with the recent allowance of industrial hemp products to be advertised – thanks to last year’s Farm Bill – that the federal government will ease up eventually on cannabis, but only time will tell.
About the Author
Maureen Morrison is a writer and consultant, working with agencies, startups, publishers and brands on editorial and communications strategies. She previously was a reporter and editor, and spent 12 years at Ad Age covering agencies, digital media, and marketers.