The cannabis industry is unique in many ways. First and foremost, it doesn’t impact everywhere at once. Unlike other industries, it slowly becomes established on a state-by-state basis, because it is still illegal at the federal level.
While there is a lot for cannabis organizations to be excited about, it is the details like its legal status that offer complications that are unique to the cannabis industry. The federal restriction affects elements such as where sales can take place, whether products can be shipped, and how and where cannabis products can be advertised. Licensed cannabis retailers want customers to know they are a safe place to buy cannabis products, but getting that message out can be difficult. Here’s what they have to contend with, and how data can help make the most of an advertising budget.
Advertising complications
Many of the rules and regulations surrounding advertising in the cannabis industry are similar to the restrictions in the alcohol and tobacco industries. These restrictions include:
- Ads can’t be targeted to underage audiences, including where they are shown and how they are shown.
- Animated characters, or characters that are geared towards children, for example, are not allowed.
- There are regulations around the truthfulness of the ads. They can’t make health claims about the product, and sometimes the ads must include warnings about the potential harmful effects of the product.
In some states, the legalization of recreational marijuana was in part contingent on the fact that it wouldn’t be advertised. In other states, advertising is regulated in the same way as the industry overall. In Rhode Island, for example, advertisements are only allowed by cannabis retailers with licenses to sell both medical and recreational marijuana.
The federal marijuana restriction can affect advertising in multiple ways. One is that there is no national advertising for marijuana products. Another is that some local newspapers can’t include print ads for cannabis companies because those newspapers are delivered by the United States Postal Service, a federal organization.
Social media advertising
Another layer of advertising complexity comes with social media. Each social media platform has its own guidelines regarding advertising cannabis products, and they are likely to continue to evolve as the cannabis industry grows.
Meta, the parent company of Facebook and Instagram, might offer an indication of how social media companies could be approaching the issue. Meta prohibits advertisers from running ads promoting THC products, which is the psychoactive component of cannabis. Recently, though, it relaxed its policy to allow advertising for a wider scope of legally permissible CBD products.
The social media sphere is one to watch because of the possibility of influencers promoting cannabis products. Social media metrics might be hard to gauge until a change is made regarding the legal status of cannabis at the federal level.
Data and advertising
Once an organization sorts through what it is or is not allowed do in the state where it is located, it can use data to help make the biggest impact for its advertising dollars. The right analytics solution can tell you where to target advertising based on the numbers.
A business intelligence product can provide overall cannabis market trends, but it can also provide a narrower focus for your organization. The data can break down information locally, by gender or age group or type of product sales, helping a cannabis company figure out where it should be advertising and to whom. The data might help an organization decide to advertise the availability of a popular product, which could bring customers into a location where they might buy other products. On the other hand, the data could indicate which products could use a boost from some extra advertising.
The cannabis industry may have its unique aspects, but when it comes to using the data to make decisions it’s just like any other industry. Data-driven decision-making produces better results, whether that’s regarding advertising or any other part of the business. The regulations surrounding cannabis advertising are likely to continue fluctuating. The best way for your organization to stay prepared for whatever changes await is to have the ability to analyze the data and make decisions that keep you ahead of your competitors.
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