Amazon began selling cannabis last week.
While it will be sometime before consumers can click a gram of Critical Kush into their Shopping Cart, news that the Seattle-based online behemoth is piloting CBD sales with select retailers in the U.K. is significant for the budding commercial cannabis industry.
“It is a really big deal when this stuff gets on Amazon,” said Rick Maturo, Associate Client Director – Cannabis Measurement for Nielsen. “Once consumers are able to order independently online, and choose by convenience and price, there will be a windfall of legal marijuana companies beginning to advertise on online platforms.”
Until the federal laws change that prohibit the sale and consumption of marijuana in the United States, however, cannabis companies have limited ways to advertise to consumers online.
Google and Facebook, which capture about 60 percent of digital advertising spending, today expressly prohibit the promotion of recreational drugs on their platforms.
That doesn’t mean a few brands, including the Greenhouse Group of cannabis dispensaries in Illinois in association with Jim Belushi and his Blues Brothers-branded bud, aren’t giving it the old college try.
Google text ads, like the one showcased above, that ultimately make it in front of consumers avoid using terms like “cannabis” or “dispensary” that would tip off the algorithm and result in immediate removal.
“They will still link the ads to their site that is a dispensary,” explained Jason Paredes, Digital Director of Gannett/USA Today Network, which last year began accepting advertising from cannabis companies.
“Sometimes based on the URL it will pass Google’s initial audit. However, when Google does a deeper dive to provide analysis on the campaign, they will scrub the landing page, or site and once Google realizes it’s for a dispensary or operator it will suspend the campaign and likely suspend or even ban the AdWords account.”
The agency for Belushi Farms and Greenhouse queried by Grown In about the origin of the Google ad that linked to the greenhouse – your home for cannabis website responded that they were looking into it with “the team” but did not reply with information by publication.
Cannabis marketers have limited “toolset”
While USA Today along with BuzzFeed, Thrillist, and a handful of other mainstream online destinations accept cannabis advertising, the cat and mouse constraints imposed by the major platforms make it difficult to launch or nurture a cannabis brand online.
Concurrently, the cannabis industry is normalizing. Marketing veterans from consumer packaged goods and other fields recognize an ascending industry and are steadily joining cannabis companies and agencies.
“The industry has grown up and there is a transference of skill sets,” said cannabis advertising veteran Eric Meth. “But the problem is the tool sets aren’t there.”
Unlike banks and financial services companies that are legally exposed if they do business with outfits that violate federal laws, Google and Facebook have less restrictions when it comes to accepting cannabis advertising. Their strict guidelines are self-imposed.
“It seems very odd to me that we can’t get over what is essentially morality play,” said Sparky Rose of Chicago-based marketing agency Supercritical, adding that concerns platforms have about unintentionally reaching minors are overblown.
“These are cutting edge firms, Google and Facebook, and they can’t handle hemp?” said Rose. “It’s just not that hard. You have all the technology in the world, you have all the data in the world. You know what everyone is clicking on at all times. And then you say you don’t know how to keep ads away from kids?”
As legal cannabis sales grow in the United States and regulators realize the sky shows no sign of falling as a result, there is optimism among cannabis marketers that platforms will loosen their restrictions. Amazon’s pilot – at least symbolically – is a significant milestone.
“If social and search platforms see Amazon start to push the envelope,” said Mike Luce of Chicago-based market research firm High Yield Insights, “there will be a rush to capture share of ad spend and be more flexible and receptive especially as state-level legalization rolls on and particularly if we see a new administration take on cannabis issues.”