The Legally Hazy World of Cannabis MarketingBy Erin Nelson March 23rd, 2017
In the November 2016 elections, marijuana lit up the ballot. Voters in California, Massachusetts, and Nevada legalized recreational marijuana. In Florida, North Dakota, and Arkansas, constituents approved medical marijuana measures. And in Montana, where a restrictive 2011 law threatened to shut down dispensaries, voters chose to protect and expand access to medical cannabis facilities.
If you look at a map of the U.S., more than half of it has a green hue. Today, cannabis is legal, in some capacity, in 28 states. Yet as state governments roll out progressive legislature, marijuana brands have hit an unexpected roadblock: advertising.
Section 843 of the Controlled Substances Act prohibits “communications facilities” from advertising Schedule I drugs, which makes violating this provision a felony. Each year, the Federal Communications Commission doles out licenses for broadcasters based on how well they serve the public interest. Broadcasters are allowed to publish cannabis ads in states that legalized marijuana. However, since a looming felony is an almost certain violation of the “public interest,” broadcasters steer clear of those ads to ensure they receive their FCC license.
This roadblock means social networks like Facebook and Instagram have emerged as primary channels for cannabis marketing. But promoting products and brands on those digital platforms isn’t as easy as you might expect.
Marijuana may be legal in more than half of the country, but it’s still illegal on a federal level. And although federal law grants advertising exceptions for “any person authorized by local, State, or Federal law to manufacture, possess, or distribute such items,” tech giants fear being held liable for aiding and abetting the sale of drugs. Facebook’s advertising policies state that it will deny paid posts that “constitute, facilitate, or promote illegal products, services or activities”—including marijuana.
This means that while a brand in Denver can legally sell marijuana products in Colorado, it is not, according to Facebook’s policies, allowed to advertise these same products on the social network. The prohibition applies even when the ads are geo-targeted to people in states that have already legalized the drug. Instagram, which Facebook acquired in 2012, enforces the same federal compliance.
A digital gray area
According to Mark Hadfield, founder and CEO of HelloMD, a digital healthcare community for medical cannabis patients, the problem is not the rejection of ads so much as the inconsistent policy enforcement. “[Social companies] have legal guidelines, but they’re unevenly applied,” he told me. “Cannabis companies are shut down for no apparent reason after they’ve been up for years, while their competitors are allowed to remain open. It’s a very inconsistent gray area.”
When Lynn Honderd, the co-founder of the popular cannabis developer and distributor Mary’s Medicinals, woke one morning in January 2016, her 20,000 followers had disappeared. Until that point, Mary’s Medicinals posted about its products, shared relevant news articles, and ran paid advertising campaigns. It had even entered into a business agreement with Facebook. Honderd read reports that at least a dozen cannabis businesses across six states lost their branded Facebook pages with no explanation.
When the BBC contacted Facebook about disabling the pages, it received an official statement:
In order to maintain a safe environment on Facebook, we have Community Standards that describe what is and is not allowed on the service. Anyone can report content to us if they think it violates our standards. Our teams review these reports rapidly and will remove the content if there is a violation.
Honderd had one opportunity to appeal Facebook’s decision by removing all content related to marijuana. Her employees took down years of posts and appealed, but Facebook still deleted the page.
“We lost our primary tool to connect with a large, supportive community of medical cannabis patients,” Honderd wrote in an email. “Many were parents of children who experience seizures and people with terminal diagnoses.”
The arbitrary nature of Facebook and Instagram’s community standards makes Honderd’s story all too common.
“The social media channels simply won’t take your money, or worse they may take your money to some point and then just shut your account down without any ability for you to get any recourse,” Hadfield explained. “You’re potentially wasting all of your budget and efforts to create a community on social media.”
For the companies that sidestep a shutdown, it’s still unclear what ads will be accepted or denied. While an ad for an event with the professional cannabis network Women Grow was approved, a similar sponsored post for a Mary Janes documentary about female “ganjapreneurs” was rejected for “promoting illegal activity.”
Image from Rise Above Social Strategies
The pattern looks something like this: If a cannabis brand submits an ad or attempts to boost a post, social regulators may not only deny the advertisement, but also flag the account and deny all future paid distribution. Even in the case when ads are regularly approved, cannabis brands live in fear that a small change to their profile could cause their Facebook privileges to be revoked.
As BuzzFeed reported in 2016, when Katherine Grimm, CEO of Clever Gent Brands, a marijuana company that sells edibles and offers educational material, secured a slot on CNN’s documentary series High Profits, she changed the cover photo on her profile to the show’s promotional image—the title and CNN logo beside a green and white version of the American flag. Facebook denied all ads following this change, including a meme of Grimm’s unwashed hair that had nothing to do with marijuana.
While Facebook and Instagram more aggressively target ads for products and dispensaries, these restrictive policies also apply to educational content. After Colorado regulators released new purchase limit regulations that many in the state would have to follow, Lauren Gibbs, the founder of Rise Above Social Strategies, tried to promote a post to inform dispensaries how they could better comply with the law. The ad was swiftly denied.
Image from Rise Above Social Strategies
Election season was no different. When Willie’s Reserve, famed singer Willie Nelson’s cannabis company, ran a more general “Get Out the Vote” campaign prior to the November 2016 presidential election, Instagram shut down its account just three days before the vote.
Reps from Willie’s Reserve filed multiple appeals, but they received a single email response: “Unfortunately, we do not offer support for blocked or disabled accounts from this email alias.”
At the time, Facebook was reluctant to do anything to stop its fake news problem, but it had no problem censoring legitimate news related to marijuana. One of the more striking examples of news regulation occurred when the social network refused to boost a post by Vicente Sederberg LLC, a law firm that shared an article written by Colorado Public Radio on racial disparities among teens arrested for marijuana.
“They said somewhat absurdly that it was promoting marijuana use,” Brian Vicente told Denver’s local Fox station, “when really all we were doing is promoting good information about what’s going on on our streets.”
‘Preaching to the converted’
When brands began to conduct legitimate business in states where marijuana was legal, Facebook appeared to be a promising outlet to circumvent strict FCC advertising protocol. It was supposed to revolutionize the industry by allowing companies, both large and small, to reach their target audiences.
“Facebook was originally this democratization tool where anyone could get their message out,” Gibbs said. “Now it’s back to money and interest. You’re just reinforcing the original power structure.”
Like Gibbs, Hadfield is in the business of educating consumers on developments in the cannabis community. For him, the equation is simple. “Facebook is a pay-to-play platform now,” Hadfield explained. “If you don’t pay, you don’t get reach. It doesn’t matter how many followers you have.”
The question is, how do you play when Facebook won’t let you pay? (Or at least only some of the time.) Despite Facebook being, as Hadfield described it, “the big golden egg to reach people new to the cannabis market,” ad regulations have forced the industry to become insular and inward-looking. Several cannabis-centric social networks have popped up, like MassRoots—valued at $44 million with 725,000 users—and the social app Duby, which functions like an Instagram for the cannabis savvy.
Ad regulations have forced the industry to become insular and inward-looking.
Yet without the ability to promote educational content to people less familiar with marijuana, companies operate inside of a trade echo chamber. “We can spend money with cannabis magazines and a number of cannabis specific publications and websites,” Hadfield said. “But when you’re preaching to the converted, that doesn’t represent much upside as a brand.”
For an industry built largely around medical advancements, the inability to reach new audiences extends beyond brand awareness. Distribution roadblocks become an issue of consumer misinformation and public safety. Regulations prevent parents and caretakers from accessing material on the ways marijuana can treat illnesses from depression and PTSD to severe epilepsy.
In a 2014 public health statement titled “Regulating Commercially Legalized Marijuana as a Public Health Priority,” the American Public Health Association warns that without avenues for consumers and patients to access information on ingredients and dosing, advertising regulations pose a public health issue.
“Cannabis businesses are working very hard to educate the customer, but then they also have to use code-language like ‘herb’ to get through ads or search engine optimizations,” Gibbs said. “How do you educate your customer when you can’t call it cannabis or marijuana?”
For now, with traditional broadcasting channels restricted by the FCC and paid distribution diminished under Facebook and Instagram, cannabis brands will have to develop makeshift solutions to reach new customers and grow their businesses.
Mary’s Medicinals will pursue partnerships with researchers, doctors, and brand ambassadors. Local dispensaries will rely on word of mouth. But many, like Gibbs and Hadfield, will use content and SEO as their weapons of choice in the social drug war.
“In cannabis, where most of your ads are going to be blocked, we have to focus on organic reach,” Gibbs said. While working on social strategy for Women Grow, Gibbs helped the women’s networking group amass over 40,000 users solely through organic tactics.
Hadfield, meanwhile, has developed a crowd-sourced content model that lets doctors, patients, and brands ask and answer specific cannabis questions with a Q&A format, similar to Quora. He also launched HelloMD’s newsletter. The newsletter originally contained articles from medical professionals, but recently expanded to include the perspective of cannabis brands as well.
“People are really hungry for information from brands, and brands have something to say around their products,” Hadfield said. “There’s a huge amount of dynamic content that’s been built up in a short space of time on our web pages.”
In a shaky political environment, Hadfield knows one thing for sure. “People are very, very passionate about cannabis because it literally changes their lives.” And to reach them?
“It’s all about producing valuable content.”Image by Photography by Alpha Smoot / Prop styling by Angela Campos