You could have a billboard on one side of the road, and it's legal, but the billboard on the other side of the road is not legal. That's just part of the game of cannabis marketing.” - Johnathan McFarlane, director of strategy at Hybrid Marketing Co.
If you're going to get into marijuana marketing in the United States, you'd better be good at hopscotch. The highways in and around the Denver, Colo. metropolitan area illustrate perfectly the patchwork of restrictions that make advertising cannabis so tricky. While billboard ads for the drug are legal there, some towns don't want to cross that double yellow line.
“You could have a billboard on one side of the road, and it's legal, but the billboard on the other side of the road is not legal,” says Johnathan McFarlane, director of strategy at Hybrid Marketing Co., a marijuana marketing agency. “That's just part of the game of cannabis marketing.”
There's also the stigma of cannabis ads appearing alongside publishers', and even other advertisers', content. Once upon a time, ads like this were relegated to niche magazines. Now though, money is flowing, and publishers are looking for reasons to allow cannabis advertising onto their pages.
To start, more places are moving toward legalization and the big players are ahead of it: Marlboro owner Altria invested $1.8 billion in the Canadian cannabis company Cronos Group in December 2017, roughly a year before Canada federally legalized. Now there's talk about a Democratically controlled White House and Congress decriminalizing what is still classified as a Schedule I drug.
Then, there's the mainstreaming of marijuana use and its expanding demographics.
“There's such a wide range of people who use these days,” says John Shute, CEO of cannabis marketing agency PufCreativ. Women and adults over 45, “who haven't used cannabis for years but are excited to now” are among them, said Vee Popat, founder and cannabis strategist at Canada-based agency ColaDigital.
McFarlane sees these growing user numbers have inspired the unlocking of new ad inventory. “The number of sites that are allowing cannabis [ads] is growing.” Six years ago, when Shute entered the vertical, cannabis ads appeared solely on related platforms like High Times and Leafly.
Now, using a number of programmatic partners, including StackAdapt, Trigger Digital, and smaller ad networks like Mantis and TrafficRoots, cannabis marketers can run programmatic campaigns on a mainstream sites. Hybrid Marketing Co.'s campaigns, for example, have appeared on CNN.com.
“Those [media] organizations, they don't want to shut down the competition for their inventory,” McFarlane says. “The more competition there is, the higher the price they can charge.”
At High Times, there is more competition than ever before, says vp of content, Jon Cappetta. “We are all working with limited inventory, and there are more brands…trying to touch the space than ever.”
Shute has seen cannabis ads in LA Magazine, and says that “a lot of our PR partners are getting [publicity] in some of the biggest nationally known magazines.” That, however, is usually for hemp products that don't contain the narcotic compound THC, which gives marijuana its buzzy effect.
Ultimately, a lot of digital cannabis advertising comes down to location, since regulations are geographically dependent—like on Denver's highways. You won't see an ad for marijuana on CNN.com if you live in New York, a state where weed isn't legal, but you might in Colorado. The Denver Post will conduct email campaigns for cannabis brands, says Shute, but you probably won't see that in The New York Times. (CBD, which you can add to your drink for an extra $5 in certain NYC coffee shops, is fair play in New York, however). States including Pennsylvania and Ohio are among the least open to cannabis content.
Still “brand safety” continues to influence publishers and platforms thinking about opening up to cannabis advertising. “Everyone was so worried about their ads not showing up next to beheading videos that they went to this rush to whitelist,” says Cappetta. “Platforms are just so worried about protecting the kids that they don't want to take the money yet.”
In Colorado, for example, for a cannabis brand to advertise on a platform, it must “guarantee that at least 71 percent of the audience is over 21,” says Cappetta. That data is easy enough for digital publications, but less so for print.
Overall, while “different magazines and other advertising solutions are becoming more lenient,” says Shute, “they all have different sets of…rules that apply to different ad campaigns.” Shute gets inquiries almost daily about cannabis brands getting their Facebook ad accounts shut down, .often for small things—like using the term “THC” in their metadata.
Other advertisers can also get prickly around cannabis. Hybrid Marketing Co. runs a separate portion of their business called 4B, which is not associated with the cannabis industry. Their clients include “large, established tech companies,” says McFarlane, that want nothing to do with marijuana. “The stigma definitely still exists, for businesses, advertisers—just in general.”
But that stigma is dissipating and will continue to as legalization continues apace. Atria's $1.8 million investment in the industry seems huge, says Cappetta, but “it's going to be $200 billion the day legalization happens” in the U.S. “Major brands” that he wouldn't name are talking with High Times about getting into the cannabis, which will only push more sites to open their advertising inventory to cannabis marketers.
“I do see the advertising restrictions being changed in a positive way for cannabis companies in the next two to five years,” says Popat.
“There's definitely tons of interest in the ‘green rush,'” adds Cappetta. “People think that there's just gold pouring out of the walls.”