3 Big Marketing Missteps to Avoid in New and Emerging Markets

A patchwork of strict regulations and vague guidelines across North America has created a difficult path for marketers to navigate, one that regularly lands businesses in hot water with improper ad placement, content, and promotions. A study published in the Journal of Studies on Alcohol and Drugs examined 328 of the Washington State’s marketing violations from 2014 to 2019, highlighting the growing pains and penalties businesses face in a fledgling recreational market. While the specifics of your marketing campaigns may need to vary from state to state, understanding where other companies have gone wrong offers valuable insights for brands across the country.

In addition to the study’s conclusions on the most common types of marketing violations, researchers also found members of the local community were as likely to report violations as officers working for the Washington State Liquor and Cannabis Board, especially in the case of content appealing to minors. They also found “very few violations” were reported by a competing business, which may surprise many industry professionals who’ve long suspected otherwise.

New Markets Can Learn from the Washington State Experience

It’s been almost a decade since Washington legalized the sale, growth, and possession of adult-use cannabis. The study, conducted by Beatriz H. Carlini, Ph.D., M.P.H.; Sharon Garrett, M.P.H., M.A.; Caislin Firth, Ph.D., M.P.H.; and Ilana Pinsky,  Ph.D., reveals the conflict between prevention and profit in the nascent cannabis industry, and the significance of community involvement when it comes to tight and constantly-changing marketing restrictions.

Although the ability for a cannabis business to engage in marketing activities was legalized in Washington State alongside adult-use weed, operators remain tightly bound on what they can and can’t do: store signs are limited by number, size, location, and a variety of other factors that seem to change with the wind — something that marketers across the country experience on a regular basis.

Public displays and new ad campaigns can be especially challenging for small retailers and MSOs that already have a myriad of other compliance-related boxes to tick on a daily basis. However, the early trial and error that has taken place over the past decade in Washington State should serve as a guideline in any market with similar rules and regulations, even if they’re not exactly the same where you operate your business. If you’re in a newly legal region and trying to figure out how to market to your audience without crossing any restrictions, taking a look at these missteps is a great place to start with the understanding that regulators across the country develop and enforce rules that are largely based on the experience of older, established markets like California, Colorado, and Washington.

3 Major Cannabis Marketing Mistakes to Avoid

• Ad Placement
  Marketing ad placement location is one of the most restrictive rules that cannabis marketers have to overcome. Whether you’re marketing your brand and/or product on social media, billboards, print, in-store, at a storefront, or on your packaging’s label, you have to ensure it’s fully compliant with zoning laws, contains proper warning labels, and cannot be interpreted as appealing to children.Many operators in Washington were reported for violations in this arena: 27 percent of placement violations were seen outside storefronts and 17 percent were noticed online on websites and social media accounts.
• Ad Content
  The next big thing to worry about after ad placement is the content itself, with the understanding that the technical details matter. Marketers in this industry must ensure their advertisements contain the proper warning labels, or their products could be interpreted as targeting minors or conveying medical benefits. Both of these issues are commonly reported to regulators by members of the local community.In this study, 33 percent of the reported violations were due to content that didn’t meet the above requirements, while 19 percent were noted for a lack of proper label warnings. In Washington, a font type size that is at least 10 percent of the largest type used in the ad and specific language around age limitations were required.
• Promotions
  Improper business practices made up 14 percent of Washington’s marketing violations. Most of these missteps were the results of unauthorized “giveaways,” which are strictly prohibited for brands and businesses in many states. This included free coffee and donuts in-store, raffles to win non-cannabis prizes, highly discounted cannabis at the start of legalization, and more. Having a crystal clear understanding of the marketing tools and promotional activities available in your region is critical for any advertising-related brainstorming sessions. It should also be part of your final review for any new campaigns.

Final Thoughts

Within each of these larger categories exists countless chances for cannabis marketers to make a mistake that doesn’t go unpunished. Written warnings, fines, and the loss of a license are all on the table for businesses that make mistakes. It’s difficult to find your place on the double-edged sword of not making enough of a marketing effort to attract an audience versus making efforts that draw the negative attention of regulators and members of the community. Brands in emerging markets and anyone advertising CBD products should pay close attention to this study, with new regulatory offices and members of the community actively searching for violations to report. In an industry still fighting to be treated legitimately and respectfully, it’s better to opt for caution and hope the still-dwindling stigma is eventually gone for good — a vital social change that will have a profound effect on how the entire industry is monitored and regulated for many years to come.