Marketing Mary Jane | CBD INFLUENCE
It’s good to understand how the size of the cannabis market when considering industry growth. The term “20 by 20” springs to mind with the U.S. Marijuana market. Recent projections for the cannabis industry by cannabis industry analysts, the Brightfield Group, state that the cannabis industry will reach $20 billion by 2020. However, these figures are being refined and revised.
USA & Canada
New Frontier Data, which is responsible for business intelligence for the cannabis industry, states that the market projections for recreational and medical marijuana markets across the U.S. have been updated. The legal cannabis market could grow an estimate of $50 billion to $75 billion within the next decade, with a crazy compound annual growth rate of almost 27 percent. And that means advertisements will play an essential role in this growing industry.
The legalization of recreational cannabis in Canada and several U.S. states resulted in an outburst of cannabis businesses. This means that there’s a lot of competition since cannabis dispensaries have used various tactics to gain a customer base. Just like most local businesses, cannabis businesses are now spending considerable amounts of cash on marketing their business on different marketing channels. The total cash used in selling their products could range between $250 per month to a massive $2500 per month.
Europe
While cannabis is booming in North America, things are not as lucrative in the European sector. 2019 was a difficult year for cannabis stocks, but the Europeans can still keep a high prospect if they learn from North America. 2020 is turning out to be an exciting year for cannabis in Europe due to several reasons including the fact that pilot access schemes are being tested in key future markets, including France, the UK and Denmark. Many countries in Europe don’t have a standard regulation around CBD, and in 2020 we anticipate that governments, such as those of the UK and Italy, may establish more comprehensive regulations surrounding the sale of cannabis products. The non-certainty of cannabis in the European markets is currently frustrating many producers, retailers and consumers who are in need of a regulated market.
In the UK, cannabis is still emerging, and many companies find difficulties getting funds and potential investors. Many successful investments seem to come from high-net- worth private investors and family offices. There is also the ongoing row surrounding dosing and labelling of cannabis products. What has been established in a recent report is that some 1.4 million people in the UK are currently self-medicating with cannabis and cannabis produce.
After a a long time of pushing for standards within the industry, The Centre for Medical Cannabis (CMC), along with the Association for the Cannabis Industry (ACI) recently obtained a ruling from the UK Food Standards Agency (FSA), giving a deadline for creating a framework of standards for the CBD industry.
Cannabis Marketing & Business Challenges
Marketing cannabis has become the best way to increase customers, but although this may sound easy, a more detailed analysis reveals the tedious challenges faced by the rapidly growing sector. The projections for the cannabis industry are very motivational; however, for cannabis brands to benefit from this growing sector, they must overcome the increasing regulatory and marketing challenges within the industry.
Differences in Legal Status Between States & Countries
Cannabis businesses are always slammed with rigid marketing and advertising regulations by the federal government that sometimes makes it difficult to make profits. These strict rules are meant to prevent the consumption of cannabis by minors and to dismantle the black market. Furthermore, each state has its own unique set of advertising laws that makes it difficult for cannabis branding and scaling a business to take place. The struggles that come with Cannabis marketing span far and wide.
Although cannabis is legal in 28 states, including Washington DC, there are still some question marks regarding the use of cannabis. Medicinal marijuana is legal in Arkansas, North Dakota, and Florida, while recreational cannabis is legal in Nevada, Massachusetts, and California. Nonetheless, many people still don’t believe in the medicinal properties of cannabis. Legalization in a state doesn’t mean all things are good. Marketing and advertisement will also play a significant role as well, and that’s where items become complicated.
California and Colorado have large marijuana markets where people typically associate with legal cannabis. People who market cannabis know that they must follow state by state rules and determine whether people in certain areas can use cannabis medicinally, recreationally, or not at all.
The aforementioned FSA situation is just one of the many challenges faced in the UK, as currently there is much confusion as to what constitutes as ‘legal cannabis’.
As noted in a very interesting and, recent analysis by The Canna Consultants, there is still also much confusion over the details surrounding the scheduling of cannabis/hemp under the Misuse of Drugs Act 1971. This still leaves massive overlapped grey areas for legality regardless of the current frameworks being established with the FSA.
Most other non-cannabis businesses are not faced with such rigid restrictions, and it makes it easier for them to perform careful analysis on the best areas to do business.
The standard-issue faced by most canna-businesses is the fact that they are not allowed to market their products on major social media outlets such as Facebook, Instagram, Twitter, Pinterest, and more. If a business posts a cannabis-related ad on Facebook, then the entire business profile is at risk of being removed without warning or the ability to recover it. Popular social media outlets like Facebook are quick to deactivate pages of marijuana businesses, without prior notice.
Popular online advertising platforms like Facebook and Google prohibit the use of drug-related promotions on their sites, and this has done most cannabis businesses to start using blogs and podcasts, newsletters, and print media. And although Facebook and Google ban is due to the cannabis ban at the federal level, many other media outlets like television and radio have established their own sets of rules on cannabis advertising, which makes it more complicated for industry members these massive state-by-state regulations.
According to Aaron Smith, executive director of the National Cannabis Industry Association, “most people believe that Facebook and other popular online platforms are the ideal platforms for cannabis products because you can target only legal states and people of certain ages.”
Facebook’s policy state that, ads don’t facilitate the sale or possession of illegal, prescription, or recreational drugs. This also involves using images of recreational or medical marijuana — even in legal marijuana states.
According to the National Cannabis Industry Association, twenty-nine states, including Washington DC, have medical marijuana programs, while eight states, including D.C., have adult-use laws on the books.
Instagram Policies for Cannabis Pages
Most cannabis businesses are using as a way to showcase buds and sleek, innovative products. Instagram is lenient on cannabis advocacy-related posts; however, its users are not allowed to post pictures that promote the selling of cannabis-derived products. Cannabis businesses that add their location or phone number in their bio could face the risk of being banned since it can be seen as advertising marijuana.
Google’s Ban on Cannabis Apps
Cannabis businesses cannot promote their businesses on most social media platforms. Google Appstore doesn’t have cannabis-related apps, so users can’t download and use home-delivery apps or any cannabis-related services through google. The tech giant has stated that they don’t want apps that facilitate the sale of cannabis-related items, regardless of legality.
Google will quickly delete apps that enable users to pay for cannabis products. They will also delete apps that facilitate home-delivery or assist the sale of THC products. They announced via their T’s&C’s, that cannabis-related ads are prohibited on the Play Store due to the federal laws on cannabis. The policy is valid on all Google ads, as well as other sources, including in-app ads and video ads. This is similar to Apple’s app store, which also doesn’t allow apps that promote the sale of illegal drugs like marijuana (due to its federal ban). At he time of this announcement, one Google spokesperson was noted to say “These apps simply need to move the shopping cart flow outside of the app itself to be compliant with this new policy”.
Influencer Marketing
It’s turning out to be increasingly more typical for companies in all businesses to utilize social media “influencers” to advance their products and services online. Influencer advertising in the cannabis world is a risk-taking idea because paid publicists need to agree to all cannabis marketing and advertising rules.
It’s assumed that social media influencers presumably don’t invest a lot of effort learning these cannabis guidelines and Federal Trade Commission (“FTC”) rules. Wiithout active agreements in place that direct what an influencer can say and how they can say it, cannabis businesses could face punishments, false advertisement lawsuits, or even losing their expensive and hard-earned licenses.
The significance is that organizations can’t merely pay individuals to pretend that they are unaffiliated third parties to heighten their products. The relationship regularly needs to be uncovered.
Regardless of whether an influencer discloses the idea of the relationship, licensees could be sued for false advertising under state law-by customers, competing businesses, or even the federal government. Penalties resulting from false advertisement claims can be huge.
Cannabis businesses clearly can’t promote products that they are not permitted to do, so advertisers must observe all actual laws when advertising. The issue, however, is that it’s not always clear what businesses can and can’t state in advertising. Each state may have its requirements, which are difficult to understand even for organizations that highly follow regulations.
‘Marketing Mary Jane’ is certainly a major challenge for companies wanting to both reach a wider audience and, promote the REAL beneficial advantages of their products, whilst also staying cautionary and compliant.
Written by: Sigelow, for CBD Influence.
Sigelow is an independant cannabis researcher and writer, with a number of years experience working with CBD, CBD Oil, Hemp and Cannabis companies. Find out and read more here!
Originally published at https://cbdinfluence.network on February 27, 2020.
