Marijuana Advertising, brands versus retailers

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Whenever we talk with cannabis industry folks about the challenges of operating in this space, the topics typically range from taxes, compliance, pricing pressure, funding or lack thereof. But rarely is the discussion centered around advertising and the challenges that exist in promoting a marijuana business. 

First off, we have the LCB advertising laws, which are quite rigid. Second, and a much bigger hurdle IMO, is the inability to run PAID marijuana ads on the biggest ad platforms in the world; Google, Instagram, Twitter, Snapchat & Facebook. In a future post, perhaps we can delve deeper into their ad policies. Advertising fuels consumer growth. Think of all the beer and big pharma ads. Now, imagine it was illegal to run ads for alcohol and pills. That's what the cannabis industry has to work with; the inability to advertise their goods. 

The reason why advertising is key, particularly for a NEW industry, is because to make a product mainstream, especially a product with an attached stigma, it's CRITICAL to have ads depicting how weed is acceptable and part of our society. At least in Washington State. Think of a TV ad starring a mom watching television, with a vape in hand. Or a normal looking chap sporting a business suit & taking a solid bong rip. People would watch that and go "Wow! Everyone is doing the reefer now. We ought to start smoking pot immediately!"

The available inventory for running marijuana ads is slim pickings, limited mainly to trade magazines, which are not business to consumer. Luckily, there are publications such as The Stranger, which are capitalizing on this inefficiency. 

WA State is a non-vertically integrated state, which has led to so many great marijuana brands. This proliferation of awesome brands, thanks to a tiered system, is mentioned several times in this Meet the Founder panel video. Despite the brand appeal, you will notice that ads for cannabis retailers FAR outpace paid advertising for marijuana brands. Below is a gallery of brand ads versus retailer ads in this week's Stranger. 

 

 

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Check this out: there are NINE retailer ads versus ONE brand ad. 

If there is such great brand cache, consumer packaging etc., why do retailer ads beat out brand ads 9 to 1? Wouldn't it make sense to see more BRANDS running ads than retailers? I can only speculate that the reason for this is BECAUSE of non-vertical integration NOT despite it. Simply put, if brands could sell  directly to consumers, they would be all over the ad game. But since consumers are required to purchase weed via retailers, only retail shops have a financial incentive to run paid ads in consumer publications. Especially since ultimately, this all comes down to the ROAS = return on ad spend. 

It's much easier to track the ROI from a retailer specific ad versus a brand ad. Again, that's because the consumer transaction occurs with the retailer NOT the brand. 

From amongst the myriads of loyal blog readers, does anyone have additional thoughts on this matter? Please share in the comment section!