Cannabis Advertising Limits Hamper Growth
New Frontier Analysts
Our data scientists drill deep with rigorous analytics to provide insight into key trends and market opportunities. We track the state of cannabis and its regulation in all major legal markets.
By New Frontier Analysts
Some states, such as Rhode Island, and organizations such as the US Postal service have taken aim at the cannabis industry in an indirect way. These entities seek to limit the advertising capabilities of cannabis businesses. The Postal Service plans to report those attempting to mail promotions or periodicals containing promotions for cannabis, as it is a Schedule I drug currently.
Lawmakers are asking the Department of Justice to clarify whether advertising cannabis in legal markets is a felony. Currently, this grey area creates regulatory issues and could land people in prison for trying to promote what is, in their region, a legal enterprise. It will be critical for the emerging cannabis sector to have these sort of questions answered if things are to progress.
The growth of any industry depends on the ability of those in the market to expand their enterprises and increase profits. Being able to market products and advertise is crucial to the development of mature businesses. If the cannabis industry is unable to advertise like other products can due to federal regulations, it will hinder the development of the industry. Legislators pushing the question will help to resolve the limitations that exist due to uncertainty. Whatever the outcome may be, the realization that a definitive answer must be found will lead to major changes in the way cannabis entrepreneurs can interact with their customer base.
While no resolution has been made regarding cannabis advertising, business owners should begin to develop contingency plans for either an easing of advertising restrictions, or industry wide limitations. This situation can also serve as a cautionary tale for those who do not fully understand or comply with the laws surrounding the industry. But if the DOJ decides to allow states to regulate the advertising of cannabis in their respective markets, then businesses in some states could benefit more than others.
Some states may decide to impose new regulations, possibly modeling these off of Colorado’s existing laws regarding the advertising of cannabis products. If advertising cannabis in legal markets is no longer a felony, this would usher in a new era of branding and marketing strategies. If advertising for cannabis eventually became as prolific as it is for alcohol, then entirely new consumer groups could be targeted outside of the traditional young male demographic that consumes the bulk of legal cannabis.