The Many Ways the Cannabis Industry Lacks Traditional Marketing Expertise
The cannabis industry has yet to find its way in marketing, which isn't altogether that surprising as the industry is new. The potential lucrative market makes it, and everyone involved in it, a bit frenzied and unfocused.
Of course, this no traditional industry. It's owned and run by entrepreneurs. They are risk takers and passionate about what they're doing. But, too many voices are telling them what to do, chasing them down too many paths and consuming their energies. As a result and overall, the cannabis industry lags behind its contemporaries in traditional marketing expertise.
“I deliberately hired my executive team from outside the cannabis industry,” explains Michael “Big Mike” Straumietis, CEO of the industry’s leading fertilizer producer, Advanced Nutrients. “You’ve got to remember, this is an industry of farmers, and they don’t have the business expertise the industry needs.”
A handful of brands like his are sticklers for sophisticated design.
Traditional marketing channels
The cannabis economy originated in an era already committed to digital marketing, social media, and online sales. It arrived at a time when traditional retail strategies are redefining themselves. The industry is trying to find its way in a marketplace where state and local regulations, on top of FDA and DEA restrictions, hobble its performance.
As a formal business, despite its black market origins, it presents itself as a medical remedy and recreational escape, images that don't easily mesh. As a result, it starts operations unaware of values in at least five traditional marketing channels:
1. Collateral materials
Print has long provided the legs for any marketing effort. Businesses have relied on good copy and visual design in ads, business cards, newspapers, magazines, brochures and newsletters. Whether or not the print material provoked action on its proposition, it left and reinforced a branding image.
Businesses traditionally developed strong brands in logos, typography, color and composition. The idea was to become as ubiquitous and familiar as Hershey, Band-Aids or Scotch Tape. Left to web designers, cannabis businesses have yet to produce that attention grabber.
3. Direct mail
Cannabis products and services do not lend themselves to catalogs, but in time, B2B sales will find digital ones helpful. And, B2C consumers are not yet comfortable with providing their private information for mailing lists. Still, businesses need some tangible presence in fliers, postcards and email connections.
4. Broadcast media
Until very recently, radio and television reached the largest audiences. Broadcast advertisements have proven effective in sales and revenue building. Mainstream broadcast media prohibits advertising for controlled substances, but there's much to learn from broadcasting strategies since ecommerce is basically another broadcasting channel.
The consumer universe has long been assaulted with telemarketing calls. Despite increasing regulation on telemarketing behavior and its often-dubious ethical practices, it sells enough product to justify its time and expense.
Problems with cannabis marketing
Largely because of advocacy and activism, the cannabis business thinks of itself as one, but it’s not. The cannabis industry isn't just a single product category. Medical marijuana and cannabis derivatives are a distinct product line. It comes with its own purpose, product lines and prospect universe. Retail recreational marijuana appeals to a different and evolving demographic under different restrictions.
There's a B2B market introducing and distributing product, services and peripheral needs. It, too, is finding its target market and establishing a presence. The B2B mindset has stronger roots in traditional marketing, but it faces challenges from regulatory compliance.
And, unique to marijuana, there's the competition from the black market. The underground market has enjoyed little in terms of marketing, except word-of-mouth, a testimony to the success of that marketing tradition. That tradition is finding its way into social media outlets.
It may be too much too soon. Despite the long record of advocacy for marijuana legalization, the cannabis economy has emerged suddenly at a dynamic moment in the marketing, advertising and political worlds.
If you arbitrarily date the curret legitimate market as beginning in 2012, when Colorado voters legalized adult recreational use (California voters approved legel medical marijuana in 1996), cannapreneurs are trying to find their way through a marketing world now defined by Amazon and Google instead of the famous Manhattan ad agencies of Mad Men days. App developers, website designers and content brokers are setting the terms and direction of contemporary marketing, though perhaps they would benefit from education in and exposure to traditional marketing methods.
“Growing a modern media company, it was important to call on the advice of seasoned people,” said Derek Riedle, founder, CEO and publisher at Civilized, a distinctive industry publication aimed at elevating cannabis culture.
Large parts of the cannabis industry lack a marketing strategy. If you go by their marketing materials, few providers appear to have an integrated public relations and marketing strategy. Some websites are more inviting than others, some content is more interesting than much else and some materials reflect more investment than others. But, few pass the test on depth and breadth.
The process of branding cannabis businesses is further slowed by marijuana's classification under the federal Controlled Substances Act as a Schedule 1 drug (along with heroin, LSD and other hallucenogens). The USPTO is prohibited from recognizing cannabis-related trademarks, though is does for Schedule 2 pharmaceuticals that include methadone, Percocet and ocycodone. Inexplicably, USPTO has issued cannabis related patents, including one held the US Department of Health and Human Services.
This has its costs. “There is less of an incentive to build strong brands as they're currently left vulnerable to infringement,” explains Killian Wells, CEO of Xyrena, whose Reefer Madness Collection (including Blue Dream & OG Kush fragrances) contain terpenes naturally found in cannabis but no controlled extracts. “Due to the legal hurdles involved in properly branding cannabis, many businesses choose to simply focus on the sale of their products as a commodity as opposed to a future household name.”
Greg Satell, a Forbes writer, identified four principles of a marketing strategy in a digital age:
Clarify business objectives
As cannaprenurs rush to put everything they have out there for consumers, you see websites cluttered with images, jargon and strain pedigrees. Better objectives might include product awareness, brand building or increased sales.
Form strategic teams
Using too many consultants puts too many cooks in the kitchen. Entrepreneurs are too ready to turn over marketing engineering to outsiders. But, finding a collaborative team with skilled experiences and interests would pool the inputs into a stronger strategy.
Distinguish strategy from innovation
A strategy seeks to achieve clarified objectives. But, innovation focuses on everything new and fresh in message and means. However, the focus on the new often ignores the value in traditional solutions.
Engage the community
Where traditional approaches called on the brand to catch attention and buys, today’s marketing seeks to push an Internet search where consumer response creates a data history that can be tracked and analyzed.
What can the cannabis industry do?
Before opening a business door, cannabis pioneers must form a marketing strategy and include it in their business plan. Its presence and quality will assure investors and stakeholders. That plan must respect and pay some attention to traditional marketing approaches.
As a new business in a new economy in an evolving marketplace, the cannabis industry needs to clarify its objectives. Its first task is to create a shared and engaged experience, a community of belief and interest where likes and followers replace the role of the traditional brand.
Getting there must reflect the contributions of collaborators, some selected for their experience in traditional marketing and others for their strengths in innovative technology. Such a team needs to present a layered approach to success, and they must be allowed an environment where failure is a permitted option.
Owners and collaborators must understand the role of Search Engine Optimization (SEO) and Search Engine Marketing (SEM). They must appreciate the technologies involved. These marketing tools were not born whole and have origins in traditional marketing strategies.
The industry must find truly qualified marketing advice. In such a new industry, with a consumer demographic still undefined, it is tough finding experts with deep experience in traditional marketing and new marketing channels. Leaving everything to millennials is counterproductive and costly.