The cannabis industry is one of the fastest-growing in the US, with eight states now approved for recreational use, and U.S. retail sales of legal cannabis products expected to rise to $14 billion by 2021.
Fast forward to 2027, and spending on legal cannabis worldwide is expected to hit $57 billion. The adult-use (recreational) market will cover 67% of the spending with medical marijuana comprising the remaining 33%.
Despite this incredible growth, cannabis businesses face an uphill battle when it comes to marketing in the U.S. Since marijuana is banned under federal law, FCC regulated broadcasters, broadcast and radio, do not accept cannabis related ads. Digital media like Facebook, Instagram and Google Adwords prohibit ads that promote the sale of cannabis.
With many traditional and digital channels closed to cannabis businesses marketers are forced to find alternative solutions. MedMen, arguably the largest cannabis retailer, did just that in their recent campaign. MedMen utilized satellite radio, local out-of-home, targeted digital, podcasts and influencer marketing to support their retail locations in Nevada and Los Angeles. MedMen has even launched their own magazine entitled Ember in conjunction with Paper Magazine. It’s a crafty approach to circumvent federal restrictions and use or create media to support their brand.
While states continue to exercise their rights to legalize cannabis and enjoy the increased tax revenue we believe it’s necessary to re-calibrate the arcane restrictions placed upon media usage. California stands as an example of common sense restraint requiring cannabis advertisers to restrict OOH placements “where at least 71.6 percent of the audience is reasonably expected to be 21 years of age or older,” according to the state’s regulations.
As more states legalize cannabis sale and consumption local marketing and media will become increasingly necessary to educate consumers. Brands have a right to market themselves and out-of-home can and should play a role in educating consumers.
At Billups, our recommendation is to expand alcohol restrictions to include cannabis brands and businesses – establishing consistent guidelines that communities and marketers can confidently rely upon. Recommended guidelines include:
- Audience composition requirements to ensure 80% or more of the audience exposed is A21+ as measure by MRI/Geopath and other available, third party sources
- Distance and line-of-sight restrictions on out-of-home placements will not be within 500 feet of any established Park, Playground, K-12 School, Alcohol and Drug Treatment Facility or Daycare facility
- Creatively no utilization of Cannabis will be shown in any advertising posted, in any form whether smoked, vaped, or eaten. Limit creative to brand or establishment name, hours, directions, ratings (e.g. yelp reviews), and inventory availability
- No commercial signage on federally funded colleges, universities or stadiums, or on federally funded transit including bus shelters, mass-transit systems or interstate roadways
The out-of-home industry can support common sense regulations by:
- Creating networks of compliant inventory in legal markets based upon audience composition and location restrictions
- Providing brands and their agents creative guidelines to ensure visual compliance
- Educating legislators to support rules which benefit their local business while protecting the integrity of their local communities and constituents
Whether or not we agree with cannabis legalization this emerging industry will continue to grow. By regulating advertising, media and marketing to follow alcohol industry precedents local municipalities can be comfortable these new, local businesses will conform to standards which put the best interest of the community first.