Could running ads for cannabis products put digital publishers in the crosshairs of federal regulators? It’s a question that more and more publishers are asking, even as marijuana legalization continues to spread across the U.S.
Although marijuana has been fully legalized in 11 states, and it’s available for medical usage in 22 states, the drug is still considered a schedule 1 substance at the federal level. With the legal status of marijuana in flux from state to state, digital publishers like Facebook, Twitter, Google, and Snap are looking into how they can profit—legally—off the growing industry, without running afoul of federal regulations.
Boutique dispensaries are eager to run display advertising on popular publishing platforms, however they’re finding more acceptance, and opportunities, with out-of-home advertising. In 2018, cannabis advertisers, including clinics and dispensaries, spent $3.5 million on outdoor advertising, far above the second and third most popular channels, which were spot TV and local magazines.
Legally speaking, marijuana products can be advertised in places tobacco products cannot. But because of federal regulations, and advertising rules that vary from state to state, platforms like Twitter have banned ads for marijuana altogether. Marijuana and CBD companies are currently restricted from advertising on Google, Facebook, and Instagram, as well.
Together, Facebook and Google account for 57% of the U.S. digital ad market. Without being able to advertise on the largest digital advertising platforms, marijuana businesses are relying more heavily on partnerships with social media influencers who can promote their products organically, along with other brands in their industries and out-of-home products, like billboards.
“[Cannabis advertising regulations] are evolving quickly,” says Gino Sesto, CEO and founder of Dash Two, a Los Angeles-based digital and outdoor advertising media buying agency.
Published: August 06, 2019