Marketing Your Dispensary Without Causing Compliance Problems
July 29, 2016
When retailers want to increase sales, they just advertise on television, radio or the internet, or do something like putting leaflets on cars. But it’s not so easy if the retailer sells cannabis.
Medical or recreational cannabis retailers/dispensaries are special, and not always in a good way. For a variety of reasons, our industry faces unique issues concerning advertising and marketing, mainly because cannabis is still a Schedule I drug under the Controlled Substances Act. That makes many TV channels, radio stations and even internet companies nervous about being perceived as assisting in the distribution of a controlled substance.
Regulations on advertising
Another reason for the difficulty is that many states, such as Colorado and Massachusetts, have strict rules about where, when, how and to whom a cannabis business may advertise. State rules often cover all forms of marketing, including:
- Print media, such as newspapers, letters, leaflets, mailings, brochures
- Event sponsorship
- Branded items/promotional items, such as T-shirts or stickers with store/product names
- Outdoor advertising, such as billboards, signs on vehicles, and leaflets left on cars
- Some states also include store signage and frontage under their regulations on advertising and marketing
Legislation varies from state-to-state, so pay attention to any section of law titled “Advertising and Marketing” or that addresses it. You should double-check regulations that may be located in other sections of the law but require:
- Prior approval on all advertisements
- Warnings/specific statements on materials distributed
- What signs, displays and lighting are allowed for storefront advertising, including what size, colors, logos, information and type/time lights are permissible. Many states require that there be no visible plant, cannabis products or accessories from the exterior of the building.
- Whether there is an outright ban on advertising, such as in Montana
Other regulations and guidelines
If a state has no comprehensive regulations yet, this can still mean that there are regulations or guidelines you should follow. These include:
- No false, misleading, or deceptive statements
- This includes statements that are made about the effectiveness of a product, listing of side effects, consequences of use and contraindications. Statements should have what is referred to as a fair “balance”; this means it should not say that a product/form/brand is safer/better or more effective than other drugs or treatments.
- Making claims based on studies or data can lead to potential problems.
- Location: Some states limit proximity of the advertisement to schools, playgrounds, public parks, libraries or areas usually dedicated to those who are underage. Even if the state has no regulations in place, businesses should be mindful not to advertise within 1,000 feet of these locations.
- Intended audience: Businesses need to be very careful that they cannot be perceived as intending to target those underage market, which would be considered under 21. For example, Colorado limits advertising to audiences via any method unless there is reliable evidence that 70% of the viewers will be 21+.
Whether abiding by state restrictions or living in a state with no regulations, what methods of advertising are available?
- Creating your online presence through a business website with strong search engine optimization
- Placing ads in cannabis industry or local publications
- Using online advertising, if done correctly and within state guidelines
- Participating in directories or forums
- Joining industry groups or attending industry conferences
- Hiring an ad agency or marketing consultant that specializes in the field and is up-to-date on current regulations
By Devon Landis
Dispensary Management Today articles are for informational purposes only and should not be considered legal guidance or advice on dispensary operations. You should contact an attorney or a qualified cannabis consultant for specific compliance and dispensary/retailing advice.