The Challenges of Distributing and Marketing Legal Cannabis

Despite the legalization of medical marijuana in only 30 U.S. states and recreational in 9 states, the 2018 market is projected to grow beyond its current $9 billion value. This phenomenon, however, has not been met without its set of legal obstacles for cannabis growers, retailers and marketers.

According to Tom Adams, an analyst with BDS Analytics, a Colorado-based company that tracks the marijuana industry, it will rise to $11 billion in sales this year and $21 billion by 2021. Colorado and Nevada have already witnessed its success through their adult-use programs, and Massachusetts just launched its program for licensing legal marijuana businesses on April 2. But one issue that’s in the same vein is a lack of licensed transportation services for cannabis products, which has previously led to supply shortages in Nevada and California.

An even bigger problem that came about this January was Attorney General Jeff Sessions’ termination of the Cole memo, which prevented the Justice Department from enforcing federal law on marijuana against law-abiding cannabis businesses. In effect, cannabis remains a Schedule I illegal drug, banks don’t have to extend their services to those working in the cannabis industry, and there is uncertainty in tax deductions for business expenses that deal in “trafficking illegal substances.”

Where does this leave agencies whom have to assess the laws that come with each legal cannabis sector (medical, retail recreational and related products) and its overall new marketable presence? Its original black-market distribution expanded because of word-of-mouth, so you would expect that marketers could rely on this for social media outlets. But promoting cannabis products is against the policy of major digital advertising companies like Facebook, Twitter, Yahoo and Bing. In fact, Instagram and Facebook have decided to further enforce the Federal Schedule 1 status by removing pages of cannabis related businesses if they don’t meet specified guidelines.

It is also important to acknowledge that state laws require marketing efforts to stay within state borders and to not target minors through any forms of advertising. This is reminiscent of the restrictions against tobacco products. Further miscellaneous problems include rehashed branding, with the marijuana leaf appearing in 44 percent of the logos presented for state approval, and inexperience with actually marketing the products. The latter is probably not a shock to any professional as their passion to learn more about a new industry comes off as a risk to clients.

So, in general, how is marijuana advertising itself? Medical-focused brands are limited in their messaging as they can’t make lavish claims on health benefits. They are also limiting their target market to current patients and potential users in local communities. Meanwhile, since recreational marijuana is slowly becoming a cultural norm, ads and social media pages are filled with everyday lifestyle photos that target older audiences. This is slowly changing the negative, “stoner” brand image towards a more personal, emotion-based marketing direction.

If you need assistance in launching a new brand, Oster and Associates is here to help. From marketing to advertising to public relations, we have helped clients share their talents with audiences in southern California and beyond.

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