As the saying goes, “settlers get slaughtered, and pioneers prosper.” Like other grey markets, the cannabis industry is a Wild West that individuals and companies are entering at rapid speeds. Entrepreneurs, farmers, tech startups and fashion designers are figuring out how to get their hands in this multi-billion dollar business. The cannabis consumer market for medical and recreational use made $4.4 billion in 2015 and is estimated to grow to around $40 billion in five years and $50 billion in 10, if federally legalized. When looking at other consumption-based industries, like alcohol and cigarettes, cannabis will eventually become a national contender in sales and public relations representation.
It is important, however, to understand that the cannabis industry must balance itself on a fine line when branding, marketing and advertising products. The industry is sprouting like a weed, it will be difficult to wrangle. Public relations agencies will need to dedicate time to understanding cannabis products, companies and personalities alike. Hiring and or educating PR professionals affluent in local, state and federal cannabis legislation will be a requirement. Communications will not only need a strategic mindset, but an empathetic persona as well, to retain relationships with cannabis-based clients.
The way companies communicate is changing because their target audience is changing. Millennials are currently one of the strongest target markets of over 80 million, reflecting one quarter of the nation’s population and outnumbering Baby Boomers by 5 million. But Gen Z will soon dominate the consumer market. Millennials and Gen Z consume information through online and social media channels. Within agencies, the need to tap into social media influencers for cannabis’ public relations efforts are imperative. Looking at significant social media influencers who have a large following is important. Those with 100,000 to 300,000 followers are considered in a local tier and sometimes have the most influence over consumers with their purchasing power. Influencers with 500,000 to 900,000 are considered mid-tier and those with over 1 million are most significant but do not necessarily influence more purchasing.
Another reason social media is most eminent for cannabis marketing is due to stringent legal restrictions. Within California, according to Proposition 64, current laws dictate that advertisements cannot be appealing to children and that those viewing must verify their age of 21 or older. Advertisements must not be within 1,000 feet of a daycare center or K-12 schools. In addition, advertisements cross borders of another state. Companies are also not allowed to advertise misleading representations of the effects of cannabis on health. These constraints will shape how marijuana-related companies communicate to the public without jeopardizing their business.
Over time, more states will legalize medical and recreational cannabis use and possession. This upcoming year will be a turning point for the industry. It is not a matter of if prohibition will end, but when. Mexico and Canada will soon fully legalize adult-use cannabis and it will only be a matter of time before the United States follows suit. For public relations professionals willing to learn and take on cannabis-based clients, this will create both growth and many risks along the way. Within this grey market industry, those with fearlessness and grit will not only survive but prosper with lots of green on the horizon.
To download a full copy of the Relevance Report, click here.
