Cannabis is increasingly legal in the U.S. Or is it? Right now, 36 states allow medical marijuana, and 16 states have fully legalized cannabis — but at a federal level, marijuana is still a Schedule I drug, alongside LSD and heroin.
From a regulatory perspective, “what we've seen is inconsistency,” Aristotle Loumis, co-founder and CBO of cannabis compliance company Fyllo, told MarketerHire.
That means the cannabis industry faces a marketing catch-22:
- If cannabis brands don’t market aggressively, they can’t establish themselves as the incumbents in a growing (heh) industry, valued at $17.5 billion in 2019.
- If cannabis brands do market aggressively, they’re caught in a web of constantly-shifting federal, state and platform-level regulations. What’s compliant one day may not be compliant the next.
Some of the unique challenges cannabis marketers face, Loumis said, include:
Some states, like Alaska, have banned cannabis advertising within a certain distance of a school. This makes sense for billboards — a stationary medium — but also opens up gray areas, Loumis pointed out. If a cannabis brand buys a display ad in a cab that drives by a school, is that a problem? There's no clear legal precedent yet, so marketers don't know.
Some laws and digital platforms forbid cannabis leaf imagery on product packaging. Sounds straightforward enough — but “it’s not a binary yes or no,” Loumis pointed out. The line between a regular leaf and a marijuana leaf is subjective.
When cannabis brands break marketing rules for short-term gains, they face long-term problems. Brands can get permanently banned from social media platforms (and the FDA can even take away their licenses). Fyllo can rarely get “banned or blacklisted clients” back on social, Loumis said.
These challenges are thorny, but innovators are still finding a way to thrive in the cannabis space — and regulations will likely stabilize eventually.
Once cannabis becomes federally legal, Loumis predicted, “it’s going to operate similarly to… alcohol or tobacco or vapes.”
In other words, the rules will change less frequently, and grow more standardized nationwide. Even if they stay strict and complicated.