When Ore­gon legal­ized mar­i­jua­na ear­li­er this month, it became the fourth U.S. state to sanc­tion recre­ation­al use. Despite the sheer size of the grow­ing mar­ket, which cannabis indus­try investor net­work ArcView Group esti­mates is around $3.5 bil­lion this year, there is no doubt this is a unique moment in both busi­ness and adver­tis­ing while the indus­try remains ille­gal at the fed­er­al lev­el.

A ‘Once-In-A-Generation’ Opportunity

“This is an oppor­tu­ni­ty that comes along once or twice in a gen­er­a­tion,” said Chris Walsh, man­ag­ing edi­tor of the Mar­i­jua­na Busi­ness Dai­ly, a busi­ness pub­li­ca­tion that cov­ers the U.S. cannabis indus­try. “From a busi­ness per­spec­tive, from the ground up, there’s tens of bil­lions of dol­lars in poten­tial.”

And those busi­ness­es will need adver­tis­ing exper­tise to reach their tar­get mar­ket.

“There is — and it will grow at a dra­mat­ic pace – a brand new mar­ket­ing cat­e­go­ry called ‘mar­i­jua­na,’” said Peter Lev­i­tan, CEO of strate­gic agency Peter Lev­i­tan & Co. and an investor in two med­ical mar­i­jua­na dis­pen­saries. “This did not exist two years ago.”

Cannabis Cowboys And Indians

But Richard Lewis, NYU mar­ket­ing pro­fes­sor and author of a book on med­ical mar­i­jua­na, also notes that until the fed­er­al gov­ern­ment gives its bless­ing, “It’s a lit­tle bit of cow­boys and Indi­ans. There’s always going to be out­laws who try to get in ear­ly and sort of [skirt] the law and then some will make mon­ey, but it’s still a few years away.”

For his part, Kris Krane, a man­ag­ing part­ner at 4Front Advi­sors, a mar­i­jua­na busi­ness con­sult­ing firm, esti­mates legal­iza­tion will hap­pen “some­where between three and 20 years, but prob­a­bly on the short­er end of that.”

He sees 2020 as a big year, par­tic­u­lar­ly since 2016 will see legal­iza­tion bal­lot issues in numer­ous states, which could help to change the polit­i­cal con­ver­sa­tion and even get the back­ing of some politi­cians if they see the issue as a pop­u­lar one. But, at the same time, he notes the U.S. will get a new pres­i­dent in 2016, which could also have a huge impact on how legal­iza­tion plays out.

Walsh agrees that before the mar­i­jua­na indus­try reach­es its true poten­tial, it will have to either become legal on a fed­er­al lev­el or the fed­er­al gov­ern­ment will have to for­mal­ly give states pow­er as, at the end of the day, it’s still an ille­gal sub­stance, which throws up a lot of hur­dles of adver­tis­ing and mar­ket­ing.

‘A Great Opportunity’ For Agencies

And that explains the hes­i­tan­cy from some ad agen­cies to touch the bur­geon­ing indus­try while it is fed­er­al­ly ille­gal even though it is like­ly a tempt­ing space. And this means there’s some­thing of a David and Goliath sit­u­a­tion with an oppor­tu­ni­ty for small­er agen­cies to cap­i­tal­ize while the Goliaths’ hands are tied.

Accord­ing to Lewis, small­er agen­cies will like­ly dig in first because they have less to lose. And larg­er agen­cies aren’t going to fol­low until the indus­try is “on very sol­id ground.”

Agency Vladimir Jones is per­haps a good exam­ple. It has worked with mar­i­jua­na-infused prod­ucts brand Dix­ie Elixirs.

Krane agrees this is like­ly more fer­tile ground for small­er bou­tique agen­cies, point­ing to the large cor­po­rate clients of big agen­cies that might be less com­fort­able with mar­i­jua­na, as well as small­er firms pop­ping up that cater specif­i­cal­ly to the cannabis indus­try.

That includes Ore­gon-based Maya Media Col­lec­tive, as well as Col­orado-based Cannabrand.

“In one sense, it’s legal, but in anoth­er sense, it’s incred­i­bly ille­gal and there’s this ten­sion that is mak­ing it either very dif­fi­cult for some peo­ple to mar­ket in the indus­try or a great oppor­tu­ni­ty because some peo­ple are savvi­er than oth­ers,” Lev­i­tan said.

But Saman­tha Chin, direc­tor of mar­ket­ing at PotGuide.com, a mar­i­jua­na-focused trav­el guide, doesn’t think major agen­cies will stay away much longer.

“Yes, there is still a stig­ma around the ‘green rush’ but as we’ve seen in Col­orado in 2014, the state received over $60 mil­lion from tax­es, licens­es, and fees. Sim­ply put, mon­ey and oppor­tu­ni­ty talk. So as legal­iza­tion con­tin­ues to spread across the coun­try, more and more busi­ness­es are going to need mar­ket­ing and adver­tis­ing efforts to help them stand out among the com­pe­ti­tion,” Chin said via email. “I think of the cannabis indus­try like the lat­est dig­i­tal age – if you’re not online and using dig­i­tal and social media mar­ket­ing to cre­ate incred­i­ble brand aware­ness, then you’re real­ly late to the game.”

Once a state legal­izes med­ical or recre­ation­al use and busi­ness­es open up and they are heav­i­ly reg­u­lat­ed, accep­tance lev­els rise dra­mat­i­cal­ly, Walsh said.

“I hear through­out the indus­try with any­thing – lawyers, con­sul­tants, soft­ware firms – and a lot of areas of the coun­try, this is still a very frowned upon prod­uct and indus­try,” Walsh said. “But in the last cou­ple of years, per­cep­tions of the indus­try are shift­ing.”

Marketing An Illegal-ish Product Online

But offend­ing con­ser­v­a­tive clients and/or con­sumers isn’t the only risk/challenge.

Adver­tis­ing restric­tions make mar­ket­ing mar­i­jua­na even more dif­fi­cult.

Walsh notes that when dis­pen­saries first start­ed sell­ing med­ical mar­i­jua­na in Col­orado sev­er­al years ago, there weren’t any rules and so dis­pen­saries were adver­tis­ing via sign spin­ners on street cor­ners with mes­sag­ing about half price joints and the like, which led to pub­lic back­lash, so the state end­ed up step­ping in and reg­u­lat­ing mar­ket­ing and adver­tis­ing. And when legal recre­ation­al use fol­lowed, mar­ket­ing and adver­tis­ing restric­tions were already built in, Walsh said.

“Basi­cal­ly, the idea is that they can’t be in your face. You don’t see adver­tise­ments for mar­i­jua­na dis­pen­saries on TV, for instance,” Walsh said. “And even in a mature indus­try, it’s high­ly reg­u­lat­ed, so you can’t be in a pub­lic space and part of the indus­try is real­iz­ing we have to be care­ful with how we adver­tise our prod­ucts because we do cre­ate back­lash and more restric­tions.”

An addi­tion­al chal­lenge with mar­i­jua­na in par­tic­u­lar is online adver­tis­ing in that major ad net­works like Google won’t run ads from mar­i­jua­na-touch­ing busi­ness­es.

Lewis said he tried to adver­tise his book, “Pot Luck”, on Google, Bing and Face­book, but they wouldn’t take the ads.

“You would think a book would be a fair­ly legal prod­uct,” Lewis said. “I just thought it was horse­shit, but that’s how it is. Real­ly, we’re still in the fron­tier sec­tion of this busi­ness and it’s still ear­ly.”

Again, this will like­ly change with fed­er­al legal­iza­tion and, Walsh observes, busi­ness­es can still adver­tise mar­i­jua­na con­fer­ences on Google and almost every mar­i­jua­na busi­ness has a Face­book page.

Building Brand Awareness & Driving Traffic

As a result, Walsh said a lot of mar­i­jua­na adver­tis­ing is rel­e­gat­ed to the back pages of alter­na­tive week­ly news­pa­pers, as well as mar­i­jua­na-focused mag­a­zines like High Times.

Web­sites are one means of being found via search. Good old-fash­ioned SEO is anoth­er option, accord­ing to Krane.

“Google won’t block you from search results. You can still do tra­di­tion­al SEO and you can have a Face­book page,” Krane said.

In addi­tion, Lev­i­tan points to cannabis-friend­ly ad net­work, Man­tis, which col­lates a large num­ber of mar­i­jua­na-relat­ed web­sites and has built out its own web­site.

Chin cites oth­er online adver­tis­ing options like Adis­try, which show dis­play ads on sites like PotGuide.com.

“That’s a busi­ness mod­el direct­ly attack­ing the prob­lem that Google won’t let you run ads on Google and Face­book won’t let you run mar­i­jua­na ads on Face­book,” Lev­i­tan said.

Also, indus­try-spe­cif­ic sites like Leafly and Weedmaps, which, like Yelp, offer reviews of dis­pen­saries, “real­ly help dri­ve traf­fic, espe­cial­ly at the retail lev­el,” Krane said.

Leafly even took out a full-page ad in the New York Times last year.

In addi­tion, there’s the Cannabis Mar­ket­ing Plat­form, which says it lever­ages audi­ence data, along with media knowl­edge and pro­gram­mat­ic buy­ing capa­bil­i­ties to dri­ve foot traf­fic, build brands, and expand dis­tri­b­u­tion for com­mer­cial cannabis busi­ness­es.

“Cannabis-relat­ed brands are forced to either take a risk by pro­mot­ing their con­tent on plat­forms with unclear rules, or sim­ply be more cre­ative when it comes to catch­ing the atten­tion of a con­sumer on a busy news­feed, etc.,” Chin said. “High qual­i­ty con­tent mar­ket­ing is king right now, no mat­ter what busi­ness you’re in. Again, I see some type of shift hap­pen­ing soon­er than lat­er.

“With this mar­i­jua­na boom, comes a flood of relat­ed ancil­lary prod­ucts and ser­vices – all of which will have a bet­ter chance of mar­ket­ing online than some­one who is direct­ly touch­ing the plant,” Chin said. “These, and a lot of the major (niche/designer) brands, will help pave the way for increase in cannabis inter­net mar­ket­ing in the future.”

What do you expect in the future of dig­i­tal mar­ket­ing for the mar­i­jua­na indus­try?