Let’s be blunt—there are several challenges around marketing cannabis online, particularly for e-commerce businesses who don’t have the benefit of a brick-and-mortar store.
For example, according to the Vividata National Cannabis Consumer Study 2019, only about half of cannabis users obtain it legally, with illicit users typically citing price and availability as their main reasons for avoiding the legal route.
There are also plenty of barriers to entry for new users purchasing cannabis online, such as a lack of education and stigma around the drug.
These challenges come before even addressing the very strict and binding rules about promoting cannabis as outlined by the Government of Canada’s Cannabis Act.
However, these marketing challenges are worth overcoming—with more than $2 billion in cannabis retail sales expected for 2020 in Canada and record-high sales in May.
You could say this relatively new market is a budding industry.
So how can e-commerce sites selling cannabis tap into the market and overcome these challenges to generate buzz around your products?
In this article, we’ll explore:
- The Cannabis Act, what it is and what it means for your business;
- Six challenges related to marketing e-commerce cannabis; and
- Three opportunities to overcome these challenges.
What is the Cannabis Act?
Passed in 2018 upon its legalization in Canada, the Cannabis Act is a piece of legislation similar to the Tobacco Act. It strictly regulates access to recreational marijuana in Canada with the main goals of:
- Restricting availability and promotion to young people;
- Establishing product safety and quality requirements;
- Reducing burden on the criminal justice system;
- Enhancing public awareness of the health risks associated with cannabis; and
- Imposing serious criminal penalties upon any violations of the Act.
While the document is more than 200 sections long, only Sections 16 to 24 are related to the promotion of cannabis and its related products.
Six Challenges of Marketing Cannabis Online
So, think of promoting cannabis similarly to how a business would promote cigarettes. You’ll never see ads in Canada in a magazine or on TV with a joint hanging tantalizingly off a model’s lips.
And the Cannabis act also applies to cannabis-related accessories. For example, Bello - a cannabis vapor tap - must follow the same cannabis regulations as the drug itself. Many do believe that this is an unreasonable extension of the Cannabis act. After all, you can buy a tobacco pipe or cigarette rolling machine on Amazon without any of the tobacco related restrictions applied.
That is likely because the Cannabis Act is still so new, and still being developed.
And, like any piece of legislation, the Act can be vague in parts, which makes it difficult to know where to draw the line with your online promotions.
Here are the six main challenges from the Cannabis Act and other factors that could see your ad campaigns go up in smoke.
1: Avoid Promoting to Young People
While parts of the Cannabis Act can be unclear, it’s quite clear in the Act that no cannabis promotions should be conducted “in a manner that there are reasonable grounds to believe could be appealing to young persons.”
While there is some leniency in very specific cases around promoting cannabis, all of them specifically identify that they can’t apply to young people.
For example, one exemption for promoting your brand is that you can show a “brand element” on products that aren’t cannabis or a cannabis accessory. However, it’s very explicit that these brand elements can’t be “a thing that is associated with young persons” or “a thing that there are reasonable grounds to believe could be appealing to young persons.”
It’s therefore important to stay far, far away from online promotions that could be seen as attempting to attract younger customers, such as candy or stuffed animals.
When it comes to how young, because the legal age varies from 18 in Alberta to 21 in Quebec, the general consensus is to target users 19 or above, unless you add an additional element regarding location to your age-gating process.
And, of course, it’s the e-commerce retailer’s responsibility to verify the age of its customers before the delivery is completed.
2: Creating legal marketing content
There are some very specific restrictions in the Cannabis Act around the promotion of cannabis and cannabis products.
Some of these restrictions make certain promotions illegal, such as:
- Promoting cannabis products through testimonials or endorsements;
- Communicating information about the distribution or price of products;
- Depicting people, characters or animals, whether real or fictional;
- Presenting products in a way that evokes a "positive or negative emotion" or associates them with a way of life that includes glamour, recreation, excitement, vitality, risk or daring ; and
- Point of sale promotion, unless price and/or availability only is given.
These rules around marketing cannabis can be vague yet complex, so make sure that you’re extremely careful with the creation of your marketing content.
3: Where you can advertise
As mentioned earlier, the Cannabis Act, like the Tobacco Act, bans mass advertising in media forms like television and print, but it’s less clear about how this applies to marketing cannabis online.
For example, it's very hard (and almost impossible) to advertise cannabis and its related products on Google. Google outright bans the advertisement of all recreational drugs and accessories.
It’s therefore difficult to find a place to market your cannabis products without several restrictions in place.
4: Social media marketing bans
Much like Google, many social media sites such as Facebook, Instagram and YouTube have strict rules about how cannabis can be marketed, if at all.
For example, on Facebook, advertisements promoting the sale or use of recreational drugs are prohibited, including related paraphernalia. Showing images of cannabis or people using it is also discouraged.
Since cannabis is still illegal in the United States where many social media sites are headquartered, and with cannabis still being lumped together with drugs like ecstasy and heroin in many of these ad policies, advertising on social media is a struggle.
5: Customer education
Unfortunately, since cannabis has only been legal for a short time in Canada, educating customers on cannabis is extremely difficult, especially for e-commerce sites where you can’t interact with customers like in a retail store.
For example, 4 in 10 Canadians don’t know the difference between THC and CBD, the two main cannabinoids of cannabis, and 7 in 10 are unsure.
And this isn’t because customers are willingly ignorant—Vividata survey data shows that there are opportunities across every legal age group seeking more education on cannabis.
But, Health Canada regulations make it difficult to discuss little else about your products other than the plant, the strains, or THC/CBD content.
Therefore, customer education is an important consideration when crafting your cannabis marketing content.
6: Overcoming stigma
Just like with customer education, recent legalization has limited the reach of cannabis because of the stigma that still surrounds it.
In a 2019 Dalhousie University study, only half of participants supported the legalization of cannabis. Also, a recent Caddle survey showed that about 77% of respondents said they would never try even legally obtained cannabis.
There’s also the added barrier for e-commerce cannabis sites where many Canadians are afraid to buy cannabis with anything except cash after a warning from the federal privacy commissioner that some countries may not let you in if they know you’ve purchased cannabis, even legally. For example, U.S. law allows border officers to bar people for life for past marijuana use, even if it was legal where & when it happened.
One way e-commerce cannabis retailers can minimize the risk of having to disclose purchase information to foreign governments and reduce the impacts of a potential data breach is to purge customers’ personal information as soon as possible once the order has been completed.
Creating a “checkout as guest” option where users can choose whether or not they want their information stored for future purchases could help ease that concern for some potential online customers.
The fear and discomfort that still surrounds cannabis, even after legalization in Canada, is a particular challenge for e-commerce sales.
Three Opportunities to Overcome Cannabis Marketing Challenges
Even though these marketing challenges around cannabis are difficult to navigate, there still remain several opportunities for e-commerce cannabis businesses to capitalize on this flowering market.
Here are three particular opportunities to market your e-commerce business and achieve new highs.
1: Advertising (legally) on these sites
While Google and other traditional ad routes may be off-limits, these avenues may be a good option for you to market your brand and grow your cannabis e-commerce business.
- Digital cannabis advertising platforms such as Leafly
- Cannabis news websites such as The Leaf or The GrowthOp
- Social media platforms for cannabis users such as WeedLife or platforms slightly more cannabis friendly than Facebook, such as Twitter or LinkedIn
- Advertising on other age-gated sites (or sections within sites) that specifically target a 19+ audience
Taking advantage of these sites can help connect you with customers and the community around cannabis.
2. Appealing to community and values
Speaking of community, you can help your e-commerce business tackle the stigma around cannabis by developing your brand around a sense of community and values, particularly since more rural regions like Atlantic Canada and Alberta are the nation’s highest cannabis users per capita.
Take Tweed as a case study. Immediately upon hitting their site (and confirming you’re 19 years of age), you’re told how the company is proudly Canadian, located in the small “hard to find on a map” town of Smiths Falls, Ontario. This is immediately appealing to those who come from a similar town.
They also prominently feature their company’s story in their main navigation, starting from humble beginnings in an abandoned chocolate factory.
Finally, Tweed is actively involved in their community by providing grants to charitable organizations, proudly supporting the LGBTQ+ community and creating a national recycling program for cannabis packaging.
By making your values clear on your e-commerce site and getting involved in your community, you can help combat the stigma that may exist around your cannabis products. You can also use “off-topic” content and social promotions to build your brand without actually promoting the cannabis product itself.
There is also some flexibility when it comes to “evoking emotion” if it is done so in a way that is unrelated to the actual product. Experts have shown that you can evoke emotion in your advertising if that emotion is related to the community, the values, or a specific cause and is not related to the product or accessory itself.
3: Maximizing your SEO
While you can’t advertise on Google, you can certainly invest in your site’s SEO (search engine optimization) strategy to improve your organic search rankings on Google and other search engines.
By working with a cannabis-friendly e-commerce platform such as Shopify, which is used by Tweed, you can help you improve your SEO and target certain keywords around the products you’re looking to sell.
If you’re not already using Shopify, here’s some stats about the Canadian E-commerce landscape in 2020 that will give you really good reasons to start!
Start Selling Your Cannabis Products Online (with a Disclaimer…)
While there are several challenges around marketing your e-commerce cannabis business, understanding the Cannabis Act and how to navigate its application can allow you to stand out from your competitors and sell your cannabis products online.
To get started with your very own Shopify store, contact Marketplace Solutions today.
*Disclaimer: Despite only a relatively short section of the Cannabis Act applying to the promotion of cannabis, its highly complex language is difficult for non-legal professionals to interpret, so it’s important to note that this article is not intended as legal advice, and Marketplace Solutions strongly recommends that you consult a lawyer if you’re looking to market cannabis.*