Get ready for the green rush: Is marijuana marketing going mainstream?

In the US, marijuana marketing is quietly moving into the mainstream and a new, legal industry is challenging preconceptions about the target market, as Mark Lowe, co-founder of Third City, finds out.

Weed is becoming legit. Medical marijuana is now legal in 23 US states plus Washington DC, and full legalisation is slated to be on seven more state ballots for the 2016 elections. Despite strong opposition, not least from presidential candidate Chris Christie, and legitimate mental health concerns, changing social attitudes suggest that gradual decriminalisation is trending across the developed world. In the US, even most Republican voters don’t think state-level legalisation should be rolled back.

Legalisation has created a ‘white market’ and, as is so often the case, American entrepreneurs are the first-movers in a business with global potential. Marijuana use is now legal in much of the Pacific North-West including Oregon, Alaska and Washington, but it’s Colorado that’s becoming America’s ‘Sili-bong Valley’.

The state is home to a crop of weed-related businesses, including caterers and lifestyle companies which have sprung up alongside the networks of dispensaries that already supply medicinal marijuana. Denver even has Cannabrand, an advertising agency focused exclusively on the industry. Its 26-year-old co-founder Olivia Mannix, who was recently profiled in the New York Times, spoke to The Drum about where the idea came from.

The growing pains the marijuana market will face on its way to respectability have already been felt in other markets where emerging brands have been threatened by stigma, regulators and rivals. Here are three examples:

Alcopops

The alcopop market began in earnest in 1993 when an Australian farmer asked his brewer friend what to do with the glut of lemons he couldn’t sell. Two Dogs was born and with it a booming market that was soon flooded by brash imitators, including Hooper’s Hooch which sold 2.5m units a week at its height. With their sweet taste and cartoon-like advertising, alcopops were criticised for encouraging underage drinking and tabloids screamed for a ‘Purge on Pop Booze’. Some supermarkets banned them, chancellor Ken Clarke slapped a 40 per cent tax on them and the Portman Group was forced to introduce a code of practice banning marketing at children.

Viagra

The fastest selling drug of all time was originally intended as a treatment for angina before scientists discovered an unusual side effect among trial volunteers – lots of erections. The miraculous cure for erectile dysfunction was brought to market by Pfizer in 1998, with Pelé fronting its ad campaign. With the drug only available by prescription, a black market soon emerged online but Pfizer faced no official competition until its European patent expired in 2013. Today rival drug companies can sell their own varieties under the generic name Sildenafil, driving up availability and lowering prices.

E-cigarettes

Like (legal) marijuana, e-cigarettes represent a relatively new and burgeoning market. It is estimated that 2.6 million people now use e-cigarettes in the UK, and the speed at which this vapour market has grown out of thin air has drastically outpaced advertising regulators and health experts. Health risks are still contested, and thus far manufacturers have faced little legislation, but from next year will face more robust testing of ingredients under the EU’s Tobacco Products Directive. In November 2014 new rules were introduced to curb advertising aimed at children after ads for E-Lites, VIP and Sky Cigs were banned for potentially appealing to minors.

“We were running an ad agency in Denver and noticed that lots of new marijuana entrepreneurs were looking for ways to market their goods, particularly on the net, so we decided to set up a dedicated full-service agency.

“Our client list now includes businesses of all sizes and we offer them everything from branding to SEO and PR advice. We’re also attracting research money from VCs who’ve seen the opportunity and are trying to work out what the most saleable formats are.”

Recent innovations include vape pens that allow users to control the strength of the hit, Tetrahydrocannabinol (or THC, the principal psychoactive constituent of cannabis) infused drinks and even cannabis canapés, a 21st Century take on hash cakes. These variants are aimed at people like Mannix – professional women in their late 20s and early 30s. The segmentation might be counter-intuitive given the very male ‘stoner’ stereotype, but the logic is watertight: this is a high disposable income group that will see the appeal of a no-calorie, hangover-free drug that is also legal.

Other target groups are emerging, not least baby-boomers who are ‘coming home’ to the drug after an extended break, and marketers are even suggesting that the marijuana industry should ape the success of craft beer or the slow food movement. It’s easy to see the parallels; ‘local’, ‘sustainable’ and ‘organic’ are fitting adjectives for a counter-cultural product like this.

Given her evangelism, Mannix might have expected the biggest backlash from the many social conservatives in her state, but it’s the ‘stoners’ that have been most hostile to this new breed of professional marijuana marketer. Several bloggers condemned the New York Times profile for suggesting the agency is “weeding out the stoners” and it lost a few clients as a result, but Mannix remains unrepentant.

“We all need to rethink what the market for this product is and what it ought to be. The statistics show that cannabis use among teens is actually falling.”

Nor is the path towards mainstream branding free of legal pitfalls. A TV ad booked for one Cannabrand client, Neos vape pens, was due to run during the Jimmy Kimmel show and would have been the first marijuana ad to air on US TV had it not been pulled at the last minute by the network’s owner.

The company in question, EW Scripps, expressed “concerns about the lack of clarity around federal regulations that govern broadcast involving such ads” demonstrating the residual nervousness among major corporates about aligning themselves with the drug. Nevertheless, the received wisdom in the subculture is that multinationals have been game-planning cannabis legalisation for years, and this is surely more than a stoner’s conspiracy theory.

That isn’t to say that the road towards global marijuana branding will be short or simple. Not even the most committed de-regulationists think that legalisation will be free of negative social consequences and a political mindset that makes little moral distinction between the operation of a criminal cartel and a multinational company creates a certain ambivalence; but for as long as wider legalisation remains a strong possibility, there will always be entrepreneurs willing to take a risk on weed going mainstream.

“You’re operating in a tight regulatory environment, so marketing requires a certain skillset,” says Mannix. With the total legal cannabis market in Colorado estimated to be worth $700m (£450m), you can see why it’s a skillset worth acquiring.

This feature was first published in The Drum's 19 August issue.

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