Why Cannabis Marketing is Set to Explode in 2017
The cannabis business industry had some big wins during this year’s election. Now, that’s stimulating predictions of major greenback growth along with ever-more sophisticated marketing strategies on the part of cannabis companies.
In November, citizens of four states—California, Massachusetts, Maine and Nevada—voted to approve recreational cannabis usage for adults 21 or over. They join four other states where the drug can be used recreationally: Alaska, Colorado, Oregon and Washington, along with the District of Columbia. Meanwhile, voters in Florida, Arkansas, North Dakota and Montana also approved the legalized use of medical marijuana. All told, 28 states have opened up to medical usage.
Given all that activity, Matthew Karnes, founder of the marijuana financial consultancy GreenWave Advisors, predicts that the legalized U.S. industry will grow from $6.5 billion in sales during 2016 to $30 billion in 2021. He estimates that by 2021, marijuana marketing will total $75 million.
Agencies are clearly picking up on the opportunity. Marijuana Business Daily has a directory that lists about 170 advertising, public relations and marketing agencies that are drumming up business nationally. A host of others are focusing on business in specific states.
The budding industry has come a long way over the past several years. “In 2011 and 2012 branding was very unsophisticated. There weren’t a lot of companies that paid attention to that part of their business,” said Chris Walsh, editorial director of Marijuana Business Daily. We’re starting to see it catch up to the rest of the business world.”
So far, the industry has remained very localized. “I’m in the Bay Area, and when I go down to Southern California, if I go into a dispensary, it’s a whole different set of products,” noted Amanda Reiman, manager of marijuana laws and policy at the Drug Policy Alliance.
Among brands just starting to migrate to multiple cities is Flow Kana, a distributor that partners with small marijuana farm businesses in the Emerald Triangle, as the three big pot-growing counties in Northern California are known. “They recognize that the brand is the Emerald Triangle,” Reiman said. “Really, what people want to know is, ‘Is this coming from the Emerald Triangle?’ the way they want to know ‘Is this wine from Sonoma?'”
As with its campaign in the northern part of the state, Flow Kana used out-of-home media like buses and billboards in Los Angeles. In addition, it leveraged the Facebook ad platform. “We’ve had our fair share of ads denied and had to go back and forth a bit,” said Adam Steinberg, co-founder and head of business development at Flow Kana. The social site nixed messages with “typical stoner language” and links to cannabis sales sites.
Most traditional media companies have spurned the industry’s ads. But Joe Hodas, CMO of Dixie Brands, which sells edible and topical products in four states, reported that new cannabis-focused companies with print and online opportunities are constantly contacting him. “The No. 1 fastest media platform in this industry is print,” he said.
Dixie has gone a different route from its competitors by creating a Secret Society of Budtenders program aimed at salespeople in dispensaries. It rewards them for their efforts to guide customers to their products with gifts like concert tickets.
Another company seeking to position itself as a national (and international) brand is California-based Whoopi & Maya, owned by Whoopi Goldberg and her partner, Maya Elisabeth. The company is working widening the typical cannabis-consumer demo beyond young men to women and older adults with its medicinal products. Whoopi & Maya only uses online marketing via the company’s own site and nonadvertising postings on Facebook and Instagram, said Evan Nison, CFO of the company and founder of his own cannabis PR firm, NisonCo.
For these companies, nationwide domination might still be a ways off: The states that recently voted to open their doors to recreational use of marijuana won’t allow sales to begin until 2018, and it’s still unclear how the new Trump administration will affect the business. But Hodas says he remains hopeful that marijuana marketing will continue to become ever more sophisticated.
This story first appeared in the January 2, 2017 issue of Adweek magazine.
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