Under The Influence-Cannabusinesses Can Smoke Out New Customers Through Social Influencer Marketing
Cannabis and its related industries continue their explosive growth in the U.S. More states are legalizing cannabis or have pending legislation to do so; some for both medical and recreational purposes, others just for recreational. Cannabis, and CBD-derivatives use in a multitude of products, are becoming increasingly mainstream.
But it’s a hard sell. Marijuana remains illegal under U.S. federal law, which still classifies it as a Schedule 1 drug (the same as heroin and LSD). As a result, social networks like Instagram (a Facebook subsidiary) Facebook, TikTok, and YouTube (a Google subsidiary) strictly prohibit all promotions for any sort of cannabis and cannabis-related products, including in places where it’s legal.
Facebook and Google, which dominate the online advertising space, require marijuana advertisers to use alternative avenues to advertise their products, including podcasts, print media, experiential marketing, and mobile apps, such as Leafly.
Radio, TV, and billboards are an option for cannabis advertising, but each has its own byzantine set of rules which vary by geographic location.
So, cannabis advertisers have begun to market to consumers through social influencers. This makes great sense, since influencers’ DNA is establishing, and then maintaining with their followers, authenticity and a level of trust in their content.
These engaged followers, with whom successful influencers maintain continuous online dialogue, are excellent potential customers for cannabis-related brands, who can nurture customer relationships with them at a very personal level, while building brand awareness.
As anyone who works with influencers knows, they approach their followers differently and more effectively than celebrity pitchpersons. Celebrities often pitch many different types of products, often with no true knowledge of them. The result is they aren’t seen as being “authentic”, or a credible source of information about the brand.
They follow a script and pick up a paycheck.
Influencers are more educators than promoters. They promote what they use and love, and are often experts in those types of products. Their followers are interested both in their personal experience with a product, as well as what they know and can pass on about that product.
This educational approach can work especially well with cannabis businesses (or “cannabusinesses”, as they’re often called), because a large part of their potential customer pool is made up of what one digital marketing agency founder with cannabis clients calls the “canna-curious”— consumers who want to know more about cannabis, but are too intimidated to visit a dispensary, let alone speak with budtenders there to lean more.
The agency founder believes that unless a regular mainstream consumer with canna-curiosity feels a visit to a dispensary will be a friendly, unintimidating, and educational experience, they’re instead going to look for that education on social media.
Influencers’ educational approach and cannabusiness are particularly compatible in that educating consumers about products is more effective and less risky than just promoting them – especially when many of those products are still criminally under federal law.
Some cannabusinesses are finding that micro influencers (“micros”) can be especially effective for them for several reasons. Mega influencers, with their multi-millions of followers, can command tens of thousands, to for the biggest megas hundreds of thousands and beyond, of dollars per post. Micros usually charge anywhere from a few hundred to a few thousand dollars per post, depending on their popularity and number of followers.
Another reason is that micros, who have much smaller audiences, and can reach a more customized group, usually respond and engage with them more frequently and personally – often daily -- consequently being more effective in persuading them to purchase a product.
However, there are risks and what I believe to be best practices of which both influencers and cannabusinesses need to be knowledgeable and savvy.
Cannabusinesses need to establish the quality of any influencer’s engagement with their followers. How often influencers post content, how often their followers respond, and how many likes, reposts, and comments their posts generate, are important. But they can also be misleading.
“Likes” can mean that a follower likes an aspect of a post, like the staging or effects, or likes the video quality or subject, but not the product in it. A comment is more valuable than a like, but a comment can be negative about the product, discouraging future sales.
Consequently, experts say a brand determining the quality of an influencer’s engagement with their followers involves a deeper dive, to assess things such as:
The quality and frequency of their content.
Tracking the growth to date on the number of that influencer’s followers.
How actively those followers interact with a particular brand the influencer has been involved with by reposting content.
The number of clicks per post.
If possible, determining the number of followers who have visited the brands’ or its affiliates’ sites.
The partnering of cannabusiness and influencers creates the risk of either or both having their social accounts taken down by their platforms, sometimes repeatedly or permanently.
Each platform’s marketing and advertising rules are different. As someone who is regularly tasked by clients with getting social accounts disabled, reinstated, and infringing content taken down, following those rules is a trip down the rabbit hole.
There’s no rhyme or reason to how social platforms shuts down pages. Their marketing and advertising rules are opaque, their enforcement stunningly inconsistent and arbitrary.
Cannabisnesses can be especially cavalier about this, since most of them started in the Wild West, unregulated black-market days, and are used to winging it, breaking rules, and often getting away with it.
So, it’s important that both influencers and cannabis (and other) brands read, understand, and comply as much as possible with each applicable social media platform’s rules, especially influencers understanding and complying with each platform’s rule for content creation and posting.
While not a complete list, here’s some suggestions of how cannabusinesses and influencers can minimize the risks of being thrown off social:
For Both Cannabusinesses and Influencers:
Don’t say if or where the products are for sale, or where to buy or order them.
Don’t ask or encourage people to buy them.
Don’t provide their prices or discounts.
Don’t provide contact information where people can buy any cannabis products.
Don't encourage people to contact you or the cannabusiness about its products.
Don’t post any images or content that explains how to grow, sell, or use cannabis.
Don’t make any medical, nutritional, or health-related claims or suggested uses for the products.
Make sure nothing in the content violates the platform’s Terms of Use/Service in general, or restrictions on the sale or implied sale of cannabis in particular.
Make sure you comply with each applicable state’s laws about all this.
For Influencers:
No puffing (a little pun intended). Only share your personal experiences with the products, and clearly disclose that any information you offer is solely your own opinion, not a general claim made by the cannabusiness itself. (Something like “I experienced great pain relief from this cannabis remedy for my sore knees”, not “This cannabis product heals joint pain”.).
Make the content as editorial as possible, as opposed to promotional. One way to do this is partnering with third-party publishers on branded content.
Clearly and conspicuously: state your intentions regarding the product(s) on your profile; be compliant with regulations for medical and/or adult use; state that you’re only reaching out to those 21 years of age and older (for recreational uses) and 18 years and older (for medical products); and, state that its void where prohibited by law in some states.
For Cannabusinesses:
Approve of content before it gets posted.
Keep content focused on education.
Remember the requirement to advertise exclusively to adults.
The goal is to publish useful, educational, and engaging content that complies with the platforms’ policies.
Another downside for influencers can be alienating followers and brands who disapprove of cannabis use. Those followers may leave, new ones won’t come, and other, more mainstream brands may not want to work with that influencer.
A continuing huge issue for both influencers and cannabis brands is properly disclosing the connection between them to comply with the Federal Trade Commission (“FTC”) Act (the “Act”). I’ve written articles for Entrepreneur and Lawyer Monthly (accessible here and here) and blogs (accessible here and here about this).
The bottom line is that brands, their agencies and PR companies, as well as influencers, are all responsible for making sure that the Act is complied with, and all “material disclosures” (when the influencer receives something of value from the brand.
It doesn’t have to be money. Free goods or services, discounts on them, or unrelated benefits, like free or discounted travel or accommodations also qualify) are fully and properly disclosed.
Cannabusinesses are legally obligated to educate their influencers about the Act’s disclosure rules, and should have a written list of them given to influencers before they create any content.
While cannabusinesses aren’t required to educate influencers about content creation or social platform rules, they need to make sure the influencers they want to work with are conversant with them, and don’t work with them if they’re not.
Why? Because cannabusinesses are ultimately responsible for the paid content that goes out on their behalf, with each state and local government where its legal having their own laws and regulations around marketing cannabis.
The takeaway? Many politicians and cannabusiness professionals believe that under the current administration, marijuana will eventually become legal federally. That may be true, or it could be just blowing smoke. But until and unless that happens, and considering the currently limited avenues through which cannabis can be advertised, influencers may be a valuable and robust means by which cannabusiness can offer their products, light up new customers.
Just Sayin’ …™ #justsayin, #influencerlawyer, #influencerlaw, #influencers, #cannabusness, #canabisinfluencers, #cannabismarketing, #cannabislaw, #digitallaw, #digitallawyer, #digitalmedialaw, #digitalmedialawyer
Paul I. Menes
The Influencer Lawyer ®
(310) 286-1313
(C) 2021 Paul I. Menes