🧙‍♂️ Magical Merchandising

Working in cannabis is hard.

No credit cards. No interstate commerce. No direct-to-consumer sales. No texting the word “cannabis” to customers. No loans (though Harborside just figured out a credit facility, which is great!). No Facebook. No Instagram.

Prohibition, though antiquated and diminishing quickly, still exists on a federal level. And it makes things insanely difficult on cannabis brands, especially as it relates to a primary lever of growth: advertising.

That’s what we’re talking about today - how the heck are brands supposed to effectively advertise their products?

🙅🏻‍♂️ Here’s what you CAN'T do

1) Platform Restrictions (the big one)

Let’s talk about “the duopoly.” Google and Facebook account for about half of digital ad spend. Why?

Well, because they have astronomical reach. Google has 1 billion monthly active users on google.com alone, ignoring its plethora of other massive platforms like gmail - and it processes 40,000 searches per second. Facebook has 2.8 billion MAU. That’s a lot of consumer eyeballs. It’s actually not just eyeballs, but super-curated eyeballs, because these platforms have been collecting data on all of us for decades. This means easy audience carving and efficient targeting for brands.

Just not cannabis brands.

Alright, so there’s one hand tied behind our back.

2) Copy Restrictions (state-by-state, but usually follow the same pattern):

• No claims of health or medical benefits

• No elements that could appeal to children (cartoon characters, etc.)

• No false or misleading statements, including those made about competitors’ products

• No testimonials or endorsements (e.g. recommendations from doctors)

• No depiction of product consumption

• No pricing information, potency statements, or promotional offers

• Ads for infused products must state “For Adult Use Only”

(^I borrowed these bullets from the Cannabis Business Journal)

Okay, so there’s another hand tied behind our back. I guess we have to kick.

And now, a quick departure for some unfiltered thoughts:

Okie dokie!

👍 Here’s what you CAN do

Lots of publishers, even publishers outside of endemic platforms like Leafly, are willing to overlook the taboo of a cannabis ad, as long as they are getting paid for their juicy impression inventory. Here are some:

USA Today: 150m monthly visits

Huff Post: 76m monthly visits

ESPN: 400m monthly visits

Newsweek: 30m monthly visits

Politico: 70m monthly visits

Barstool Sports: 8.6m monthly visits

PornHub: I don’t know their monthly visits, because I’m not going to navigate to it on my work computer to check, but I imagine it’s a lot

Across the friendly sites, this is actually a sizable impression count.

So, as a cannabis brand, you can run programmatic ad campaigns, and get the word out to some big audiences. As long as you abide by significant restrictions to your creative copy.

🐟 Fishing

A perfect scenario with your programmatic campaign:

The system serves up a highly-relevant ad for your product to a customer that matches your target persona perfectly. Margaret, the 42-year-old lawyer who loves hot sauce, lives in suburban Chicago, and partakes in cannabis. Margaret sees your ad for infused truffle hot sauce on ESPN.com, and she’s intrigued - she is funneled to your website, she learns about you, she vibes with your color scheme, and now, thank goodness, she is aware. And, hopefully, she is also more likely to buy your product over an alternative in the future.

This is a phenomenal outcome. It means you reached out into the world and made it more probable that a customer will purchase your product when they shop.

What about when they are already shopping?

🧙‍♂️ Magical Merchandising

Cannabis eCommerce has exploded over the last three years, and not just Jane. Menus on 3,500 dispensary sites represent a massive opportunity for two reasons:

1) Lots of eyeballs

2) The eyeballs are attached to extremely high-purchase-intent customers

Customers that navigate to a dispensary menus want to buy cannabis - plain and simple. But what cannabis product they select, among a full product offering, is the real question.

Awareness comes into play, so hopefully your programmatic campaign worked. Packaging is important as well. Price point, too. But, perhaps the most important lever you can pull - placement. It’s time for some Magical Merchandising.

As humans, we are more likely to buy what we see first.

It’s a simplicity bias. That’s why CPG companies buy space on grocery store end caps, or lobby for placement at eye level. Same principle applies to shoppers on digital cannabis menus.

Good menus allow brands the opportunity to prioritize their items on retailer menus, as long as those items are in stock.

Better menus personalize that ‘digital merchandising’ experience to each shopper, to ensure only highly-relevant items that they’ll probably like are shown to them.

Magical Merchandising is when a platform can identify which brands are in stock, real-time, then serve those items based on each customers’ individual affinities and buying behavior.

Conversion rates go way up. Brand sales go way up. Category sales go way up. Brand / retail relationships get stronger.

Magical.

📚 tl: dr

• Cannabis advertising is restrictive

• Facebook and Google are lame, and don’t really play ball with cannabis ads

• Some publishers (ESPN, USA Today, etc.) accommodate cannabis ads with clean copy

• Smart integrations and nimble menu layouts allow you, as a brand, to place highly-relevant ads to highly-relevant shoppers at highly-relevant times

• It is Wednesday