Business

Weed’s Big Tech Wish List

avatar Hilary Corrigan / Jul 16, 2020

Jesse Bontecou, deputy director of industry group Oregon Retailers of Cannabis Association (ORCA), recalls how the group once tried to promote an event on Facebook.

It was in 2018 or early 2019, he recalls, and included the state’s top cannabis regulator giving a talk on cannabis policy. Facebook not only rejected the post, but also dinged the group with a warning, Bontecou said. ORCA is a trade association—“and yet we’ve had problems with Facebook,” he said. “It’s frustrating.”

He wonders at times if the association’s account will get suspended. “I’m even nervous talking to you about it,” he said.

Cannabis businesses want to advertise on Facebook and Google the way other businesses do. But the Internet giants restrict advertising from the federally illegal industry. It’s a problem for the industry.

“What we want to see is the recognition of the states’ rights and recognition of the businesses’ rights” to advertise, said Sean Lucas, vice president of Nug Digital Marketing

But Lucas hasn’t even seen communication between state regulatory bodies and the tech titans. “It’s just not happening,” Lucas said. “It’s gonna take some lobbying.”

More communication among regulators, Silicon Valley and the cannabis industry could create pathways for advertisers and responsible practices for doing so. But no state has stepped up to create an advisory board to do that work and share it with other states.

“It’s just so strange to me why this hasn’t happened yet,” Lucas said. Such an approach—a regulatory forum with input from all—is routine in other industries. And enough data, knowledge and expertise now exist in legal markets. “It’s just not occurring within this industry.”

Lucas called the result a wild west climate. “It all comes down to the local associations,” Lucas said of trying to set standards that companies and big tech can work with. “Everything’s left up to them to sort out.”

*

Editor’s Note

Since 2015, WeedWeek has been the best way to keep up with the cannabis industry. WeedWeek’s audience includes many of the most influential figures in cannabis because we are editorially independent: Advertisers have no influence on our editorial content.

We publish three free newsletters: 1) WeedWeek by founder Alex Halperin, 2) WeedWeek California by Donnell Alexander and 3)WeedWeek Canada by Jesse Staniforth, as well as original reporting. The flagship WeedWeek newsletter has about 11,000 subscribers.

Follow us on Google News and be the first to see new WeedWeek stories.

Tips, comments and complaints to Alex Halperin alex@weedweek.net.

Connect with WeedWeek on Twitter, Instagram, and LinkedIn.

To advertise contact Lisa Marie Dudenhoeffer lisamarie@weedweek.net

*

‘Ongoing process’

The National Cannabis Industry Association has “been in contact with some of these companies directly for a while,” NCIA spokesman Morgan Fox wrote in an email. The association has sought ways for state-legal businesses to access “the same advertising and participation options” available to most other businesses.

“It is an ongoing process,” Fox wrote.

NCIA wants to be able to advertise in compliance with state laws. The group would also like users to be able to search for an item without having it hidden by algorithms—a complaint that the association has raised with Facebook. It also has longstanding complaints about the seemingly random blocking, banning or shutting down of some cannabis-related pages, posts and profiles—such as those of cannabis companies and nonprofits involved in drug policy.

Noting their same age limits and similar state advertising restrictions, NCIA has called for the companies to treat cannabis roughly like they treat alcohol. Google and Facebook both impose some restrictions on liquor ads. Google, for instance, specifies ads can’t target minors, but it allows ads for online sales as well as brand and informational ads.

According to its policies, Facebook limits content on buying, selling and trading alcohol if it’s not posted by pages, groups or profiles representing brick and mortar stores or legitimate websites and brands.

NCIA is in ongoing conversations with Facebook, Fox said. But the association lacks the bandwidth to pursue other big platforms like Google, especially while working on other priorities such as SAFE Banking and de-scheduling cannabis federally. Ending prohibition makes “a lot of those problems go away,” Fox added.

Without public pressure, many companies are disinclined to treat cannabis businesses like mainstream companies until the federal government de-schedules cannabis, Fox said. 

But he says platforms that are willing to work with the cannabis industry could reap near-term benefits of membership, viewership and ad sales. They could also reap long-term benefits as the industry grows and cannabis businesses “remember who treated them well.”

Facebook

NCIA has had conversations with Facebook off and on over the past five years. A couple of months ago, Fox says, Facebook reached out to the trade group.

“We got the sense that they want to improve their policy,” Fox said, so businesses can advertise and show up in searches. The discussion included ensuring that only licensed businesses advertise. Facebook hasn’t announced any changes, but Fox noted it initiated the conversation.

NCIA has had a long-running petition at change.org about Facebook’s practices towards cannabis. It notes numerous reports of members’ ads rejected and pages suspended—including NCIA’s own ads and posts—and censored marijuana search results. The petition has nearly reached its 25,000-signature goal.

To Bontecou of ORCA, not having full Facebook access conveys that the cannabis industry is somehow untoward. “It just is like a little slap in the face,” he said.

ORCA gets similar complaints from its members. But Bontecou said he hears fewer now as some have stopped using Facebook. He also sees more efforts to create cannabis-friendly platforms outside of Facebook and Facebook-owned Instagram, where they encounter the same situation.

Several years ago, he says ORCA reached out to Facebook about its cannabis policy. “It was not something that they seemed interested in at all,” Bontecou said.

Lucas, from Nug, doesn’t try to advertise with Facebook or Instagram. Those platforms don’t just reject the ad, he said, they have at times shut down cannabis business pages, along with cannabis business owners’ personal accounts. “It’s pointless to try,” he said.

In response to WeedWeek questions, Facebook sent an email with links to its policies on regulated goods and drugs. They outline how the company prohibits attempts to buy or sell goods such as marijuana and paraphernalia.

Google

Getting an ad on Google can secure top placement for viewing—for instance, putting a dispensary at the top of the results list of a search for nearby dispensaries.

“That’s huge,” Lucas said, noting that it separates that business from those that don’t advertise. But cannabis companies can’t get such ads.

Lucas said Nug—which caters to all kinds of cannabis businesses—has figured out ways for its clients to get top search result spots. “We’ve been able to develop that process,” Lucas said, noting that the remedies don’t get Google or clients in any legal trouble. “We’re certainly skirting the gray line.”

He has found more restrictions, in a way, on CBD ads than those for cannabis. The latter can use terms like flower, ounces and pre-rolls. But if CBD shows up in an ad, “it gets turned down pretty quickly,” Lucas said. “It’s the strangest thing because it’s legal federally.”

In response to questions, Google said in an email it has strict policies on ads and that cannabis ads violate those policies. “We don’t allow marijuana ads because the product is illegal on the federal level,” Google said.

Amazon & Apple

As with Google, Lucas said word choice matters at Amazon. For instance, Amazon’s restrictions on CBD—despite its legality—means having to list those products as hemp. Lucas hopes to see Amazon loosen its restrictions in the near-term.

In the longer term, he’d like to see Amazon fully serve the cannabis industry. If it doesn’t, an Amazon-type marketplace will eventually form to do so, he said.

Meanwhile, several months ago, Apple stopped publishing cannabis-related apps for iPhone users, Lucas said. Apple also halted vape apps during the vape crisis. 

Lucas would like to see the capability for cannabis-related apps restored. It’s a way for businesses to better engage with customers, he said, and it’s good work for app developers.

He believes it makes sense for these platforms to work with the cannabis industry “that is turning into a big industry and eventually will be a gigantic industry.” But the federally illegal status and varying state rules create “so much confusion in that space that it’s not worth it” for them to try, he said.

Amazon and Apple did not respond to requests for comment.

‘Resourceful creativity’

Instead of workarounds, some cannabis businesses have started new platforms.

Earlier this year, software company Jane Technologies Inc. rolled out a new e-commerce platform to connect brands and dispensaries. Customers can choose products from a brand’s website, for instance, see a list of nearby dispensaries carrying it and complete an order from that same site. Jane calls it an “indirect to consumer” model. 

According to Jane CEO Socrates Rosenfeld, the platform has got the capability for searching and for targeting certain customers. And people mainly use it in order to buy, not just browse. 

Amid the COVID pandemic, Rosenfeld said the industry needs  a robust online presence. At the moment, fewer people see cannabis billboards and companies can’t set up booths at conferences and events.

“This industry was rooted in resourceful creativity,” Rosenfeld said. He stressed that it’s the responsibility of the technology company—not brands and dispensaries—to create that network and do the related work.

“We only got here because Google, Amazon and Facebook said, ‘No,’” Rosenfeld said.