Cannabis Advertising is complex in Illinois due to the unique legislative legalization process. We'll walk you through it and make compliance easy.
Illinois is the 11th state to legalize recreational marijuana in the U.S. and the first one to do it with legislation. Come January 1st, Illinois will face a host of issues that this new bill will bring. Shortages, legal and social justice issues, and dispensary locations are at the forefront of everyone's mind.
Farmers and brands that will be marketing their recreational strains will run into a harsh advertisement policy that makes ads for alcohol and tobacco seem like a walk in the park.
Break these rules and lose your license
Here are some of the rules for advertising recreational cannabis from House Bill 1438, The Cannabis Regulation and Tax Act (Cannabis Act) (they are paraphrased & commented). This differs from any previous rules and regulations for medicinal cannabis. Fair warning, I'm not a lawyer and this blog post is not legal advice.
The Act’s advertising restrictions apply broadly to any cannabis business establishments AND any other person or entity, and explicitly prohibits statements or illustrations that:
- Use any image designed or likely to appeal to minors, including cartoons, toys, animals, or children or any imitation of candy packaging or labeling, or any other likeness to images, characters, or phrases that are designed in any manner to be appealing or encourage consumption under 21 years of age. This is the main rule and comes as no surprise. It's very similar to what is already in place for alcohol and tobacco.
- Depict the actual consumption of cannabis or cannabis products. Another rule that is fairly standard in the alcohol and tobacco industries.
- Include an image of a cannabis leaf or bud. Here's where things start to get tricky. It's a bit unusual to not be able to show the product you are advertising. What's confusing is if the packaging can or cannot be transparent. Technically if it's transparent, you are using a bud to advertise the product. There is a lot of opaque packaging currently used in IL Medicinal. After some research, I've yet to see any clearly defined rules about container transparency. You can check here for all the marijuana packaging laws.
- Make any health, medicinal, or therapeutic claims about cannabis or cannabis-infused products. This is kind of brutal and renders any favorable listings from Leafly as pretty much dead to advertisers. This is also possibly a problem for dispensaries looking to recommend something for a customer quickly because they won't be able to label anything themselves for sorting reasons. So you can't just mark a strain good for stress, depression, pain, nausea, and fatigue and makes you uplifted, happy, relaxed, and euphoric. Apps like Leafly will be an indispensable tool for consumers and workers in the cannabis industry to guide about all the new strains coming out.
Additionally, no cannabis business may advertise cannabis or cannabis products in any form:
- Within 1,000 feet of a school, playground, recreation center, childcare center, public park or library, or game arcade which allows persons under the age of 21
- On or in a public transit vehicle or public transit shelter
- On or in publicly owned or publicly operated property
Cannabis businesses, including retailers, are also prohibited from promoting the sale of cannabis products by giving away cannabis or cannabis products, conducting games or competitions related to consumption, or by providing promotional materials or activities that would be appealing to children.
" As Jean-Paul Jassy of Cannabis Business Executive explains, “It is unlawful to use a ‘communication facility’ (i.e., mail, telephone, wire, radio, and all other means of communications) to facilitate a felony.” Based on the Controlled Substances Act, federal laws make it very clear that marijuana businesses cannot use mail, phone, radio, television, and so on to promote their products and services. Why? Because federal law sees using these communication vehicles as ways to sell an illegal drug."
"It’s important to point out that the law gets a bit confusing as it relates to advertising though because advertising doesn’t have to directly try to facilitate a transaction. For example, a dispensary might mail educational materials or buy ad time on a radio station to provide an educational message (of course, with its name and location included at the end of the ad for indirect promotional purposes). It’s a gray area of the law though with no precedent set, so marijuana businesses have to be extremely careful."Marijuana Advertising Rules: Challenging but Not Insurmountable
"Federal law always trumps state law in lawsuits that can be tried at the federal level, so regardless of a marijuana business’ state laws, it needs to be aware of and follow applicable federal laws."Marijuana Advertising Rules: Challenging but Not Insurmountable
The Secret to Cannabis Advertising In Illinois
In general, I don't think dispensaries are going to have a hard time. There's going to be such an initial demand for recreational cannabis that people will be actively seeking out nearby dispensaries. As long as they are listed on Google and Yelp, I would expect a steady stream of traffic.
Dispensaries should, of course, have a website listing directions, hours, policies, and any crucial information on there. Make sure it's well designed, easy to use, and your servers can handle a large amount of traffic.
A featured dispensary listing on Leafly will go a long way as well. It allows for a menu, deals, info and reviews, and sort of acts like the Yelp of the Cannabis Industry.
There are 55 licensed medical marijuana dispensaries in Illinois. The new law allows these dispensaries to apply for recreational retail licenses, which would allow them to begin selling recreational cannabis from their current store. Additionally, these dispensaries may apply to open a second retail location.
Illinois will also issue up to 75 new recreational cannabis retail licenses to applicants by May 1, 2020. Applications for recreational cannabis retail licenses will be made available no later than October 1, 2019.
Farms, brands, and product makers should really read the following closely to get an edge in this competitive but profitable landscape. There are great cannabis friendly advertising options out there, here are some of your best bets.
Native Advertising & Outstream Video
"Native advertising is a type of advertising, mostly online, that matches the form and function of the platform upon which it appears. In many cases it functions like an advertorial, and manifests as a video, article or editorial.The word "native" refers to this coherence of the content with the other media that appear on the platform. An important aspect of advertising, in general, is net impression, which is a reasonable consumer's understanding of an ad. The power within native advertising, however, is to inhibit a consumers' ad recognition by blending the ad into the native content of the platform, making many consumers unaware they are looking at an ad to begin with. The sponsored content on social media, like any other type of native advertising, can be difficult to be properly identified by the Federal Trade Commission because of the rather ambiguous nature. Native advertising frequently bypasses this net impression standard."Wikipedia.org - Native Advertising
You pay the website a placement fee, and in return, your article is published with a link to the web page of your choice. Advertorials are typically not self-promotional and per the Code of Federal Regulations, they must be clearly identified as sponsored content.
Outstream video is a stand-alone autoplay ad solution. It combines a video player and advertisement into one and can seamlessly blend with existing premium content (think ESPN.com, Yahoo, Huffpo, etc). I wrote an article about it two years ago and how that was the perfect format to beat ad fraud and the click-bot armies. The content of the out-stream video would still have to follow the guidelines of the cannabis regulation act, however, it doesn't have to deal with the Federal Communications Commission.
This means you could show age-appropriate lifestyle imagery, animated logos, abstract patterns, and other motion graphics (as long as it's not cartoony and doesn't use animated characters).
In-store Digital Signage
There's already a network of in-store digital signs for farms and brands called Green Screens, however, it's not rolled out in Illinois yet. Since there are such heavy limitations with recreational cannabis on the imagery of leaves and bud, you'd be limited to branding, lifestyle imagery, various motion graphics (again no characters or anything "candy-like"), factual data of the contents like % of THC or CBD, and descriptions about taste and mood (being careful not to make any therapeutic claims).
In-store digital signs will raise brand awareness, increase sales, and strengthen your dispensary relationship by advertising at the point of sale, and influencing customers while they are making a purchasing decision.
Pre-Roll and Sponsored Video
YouTube says video content that promotes illegal drugs and dangerous products or substances is “not suitable” for advertising on the platform. However, you are allowed to share videos that discuss such substances for educational, documentary, and artistic purposes as long as they do not glorify illegal or dangerous use of the product. You have to be careful with sponsoring content and make sure that it complies with the regulations in IL.
While there might not be much enforcement out of the gate when it comes time to renew licenses they will go through everything with a fine-tooth comb. One small slip-up could cost you the license and millions of dollars of potential revenue.
There's an online video network called Weed Tube that lets you advertise cannabis products. Pre-roll is a short 15-30 second ad that comes before video content. You don't have to be as cautious with the content since you are not sponsoring it, and as long are your ad complies with IL regulations, you're good.
Influencers and Sponsorship
On social media, individuals can share with impunity, which means influencers can share products they are passionate about without fear of getting shut down. This is strictly done organically and not through paid reach as it would have to conform to the same advertising rules on the given social media platform.
FTC issued guidelines for using endorsements or testimonials in advertising. The guidelines are complicated, but some of the key points are that (1) testimonials and endorsements can’t be false or misleading, and if they are, the advertiser (the cannabis company) can itself be responsible; and (2) in most cases, the nature of the paid relationship between endorser and advertiser needs to be disclosed. The gist is that companies can’t just pay people to pretend that they are unaffiliated third parties to hype up their products. The relationship typically needs to be disclosed.
Sponsorship is another great way to get the word out. A trade show. A concert. A band. An athlete. Get up and get your brand out there. Let everyone see your logo and name on something big that's happening. Here's a list of athletes who advocate for Cannabis 20 Athletes Who Advocate for the Use of Cannabis in Sports
Becoming a sponsor at a trade show is easy and effective. Here's a list of trade shows and conferences in 2019 that you can sponsor Marijuana Trade Shows and conferences
The Golden Rule of branded merch is: Only give things worth giving. So make sure to print high-quality designs on premium swag. The more awesome you are to someone, the more likely they will connect with your brand and spread the word. You want someone to rock your gear, not trash it. A branded merch strategy is a smart move for cannabis companies because it can bring attention to your brand, increase the morale of your staff, and differentiate you from other brands.
Weed Friendly Ad Networks
There are a few advertising networks that actually want your cannabis company to display ads. Traffic Roots has an online control panel that’s easy to use, and it will get your ads to a targeted audience. Mantis is a cannabis-friendly ad network that lets you fine-tune your campaign by state, region, or zip code. They also have a very comprehensive and specific list of "do's and don'ts" depending on what you are advertising.
Check it out here: Ad policies and creative restrictions
They have a minimum ad spend of roughly $3K a month. Leafly advertising costs range from $450-995 per month, with Weedmaps offering a range of options that extend from $399 to as high as $10,000 per month.
A top-notch blog gives you a chance to share your enthusiasm and insight within your branded website that you totally control. Search engines target keywords, not pictures. Write a well-researched article with lots of good advice. Then do a quick 5 - 15 second video and highlight the key points.
This can serve to drive traffic. Short-form video is great for organic social media to reach. Now that Vine is dead there are apps like Tik-Tok that have stepped in and celebrate short videos. They let you have fun adding in commercial (royalty free) music to your loops.
Anyone with an iPhone-or-better can make a five-second commercial and save it as a .gif or an mp4. (Follow the advertising rules about content.) When it's cut down to the essential message, this can be shared via text, Vimeo, or Giphy, and posted on your website, on a digital ad network, and, of course, on your blog. Also, don't forget to share your blog post link to Reddit, Twitter, Facebook, Stumble Upon, Digg, and all the other sharable networks.
Because Illinois passed recreational cannabis into law with legislation, they were able to make strict rules and guidelines for how it can be advertised. You have to pay close attention to all the rules because they will revoke your license if you break them.
Your best bet is to partner with an agency or studio that is familiar with this legislation and can follow these rules to the letter and deliver effective advertising. The success of your canna-business depends on it. Oof. Ending with a brutal pun! Now, go out and make some weed ads!