As anyone starting a dispensary knows, the dance between state and federal law is a delicate one that reaches into many aspects of the business, including advertising. Naturally, cannabis entrepreneurs want to promote their products, but it is illegal to advertise a Schedule 1 drug.
Cannabis marketing also involves multiple government agencies. The Federal Communications Commission grants licenses to radio and television broadcasters, which means they can take them away from station owners who violate federal law.
Another federal agency, the United States Postal Service, has been proactive in its stance against cannabis marketing in the magazines and newspapers they deliver. Last year, the USPS contacted publishers to remind them that printing cannabis ads is a violation of the Controlled Substance Act.
State Cannabis Marketing Laws
While 29 states and the District of Columbia allow some form of legal cannabis, state laws regulating cannabis marketing range from none (Arizona, Maine, Michigan, Minnesota, New Mexico, Rhode Island, and Vermont) to prohibiting it entirely (Delaware and Montana). Other states (Alaska, Texas, Florida, Georgia, Maryland, New Hampshire) are still working out the details in their legislatures.
The states that have established regulations for cannabis branding tend to address three areas: messaging, minors, and signage. These regulators typically include a section that prohibits advertisements from making false or misleading claims about a product.
In addition, ads cannot target minors, so their placement – whether printed in a publication or broadcast across the airways – is very important. Several states prohibit advertising on billboards or near schools. If a cannabis business owner wants to purchase advertising, they must choose a platform where there is a reasonable expectation that 70% of the audience is age 21 or older. States often look to the alcohol industry for guidance, such as Colorado’s Rule R 1100 Series – Signage and Advertising:
Voluntary standards adopted by the alcohol industry direct the industry to refrain from advertising where more than approximately 30% of the audience is reasonably expected to be under the age of 21. After reviewing the rulemaking record, the State Licensing Authority has determined that in order to prevent advertising that has a high likelihood of reaching minors, it is appropriate to model the Retail Marijuana Advertising restrictions on this voluntary standard used by the alcohol industry.
As for dispensary signs, some states go to great lengths to regulate sign size, placement, and whether it can be illuminated or not. If you are starting a dispensary in Nevada, you need to obtain state approval of your company’s name and logo before hanging your shingle.
Connecticut law allows cannabis marketing as long as it depicts medical uses. Ads in this state must be submitted to the state Department of Consumer Protection at the same time or before the ad is disseminated. In New York, ads must be submitted to the Department of Health 30 days in advance.
What the Future Holds for Cannabis Marketing
Since both startups and legislators are navigating new legal territory, there are plenty of details yet to be worked through. If you are starting a dispensary, proceed carefully but proceed. Build out your cannabis marketing plan. Determine your target market. Figure out what differentiates your products from the competition. Work on positioning your products within the marketplace.
Once you have the big picture in place, create a website (making sure it’s blocked by a popup window that verifies age). Carry your brand identity throughout your dispensary down to the employee nametags.
Look online for state laws about cannabis advertising. Often, you can find links to them on the same webpage where you applied for your permit. Find out how other cannabis businesses in the state are advertising.
Finally, consider working with a consulting firm, like SIVA Enterprises. Our SIVA Brand division can help you build, license, and protect your brand. SIVA Enterprises is a full-service business development firm that provides consulting, turnkey management, venture opportunities, and brand acquisitions and licensing to cannabis entrepreneurs across the country. Learn why we have the highest success rate of approved cannabis license applications in the United States. Contact SIVA at (818) 562-3362 or firstname.lastname@example.org.