The State of Cannabis Advertising
Using advertising and marketing initiatives to attract and engage consumers is crucial for any new business, but especially in a fledgling consumer product industry emerging from nearly a century of prohibition and stigma. Due to cannabis’ status as a Federal Schedule I substance existing under multiple state-led regulatory frameworks, cannabis business owners are forced to be creative when it comes to promoting their brands. In this blog post, we take a quick look at how advertising rules are shaping up in the Northeast.
Emerging legal markets understand out of the gate that because cannabis is federally illegal, national advertising is prohibited(1). As a result, jurisdictions are taking their cues from more established markets as a starting point for setting advertising guidelines.
In Massachusetts, regulations stipulate that advertisers are prohibited from making false, misleading, or untrue claims. Cannabis brands cannot use language that refers to their products as being “safe,” having “therapeutic effects” or other claims referencing traits like quality or performance, unless there is substantial scientific evidence or clinical data to support such claims.
As with other legal markets, Massachusetts regulators’ greatest concerns center around ensuring cannabis products don’t appeal to children. Companies are not allowed to have cannabis words or imagery in their logos, and advertisers are not only restricted from depicting anyone under the age of 21 in their advertising, but they must also refrain from using mascots, cartoons, celebrities or other elements that could appeal to those underage. Cannabis advertising may not be displayed in the interior or exterior in bars, restaurants, or any business in which cannabis products aren’t for sale. In TV, radio, billboard, print, events, and other outlets that will allow cannabis advertising, it must be deemed that at least 85% of the audience is expected to be at least 21 years of age, and such ads are required to include multiple warning statements, including one detailing health risks.
The disconnect between legal states and federal law also impacts brands’ ability to market online, with Google Adwords and other platforms also restricting cannabis advertising even in jurisdictions where cannabis is legal. While the cannabis industry has taken to social media giant Instagram as a way to build brand awareness through imagery, influencers, and education, the platform does not allow companies to advertise or sell cannabis. And because the rules of enforcement aren’t always clear, cannabis companies that choose to promote via Instagram are in constant danger of losing their followings.
Join us for the educational session “The State of Cannabis Advertising” during the National Cannabis Industry Association’s Northeast Cannabis Business Conference. Formerly Seed to Sale Show, #NECannaBizCon invites you to get the latest regional insights, explore emerging business opportunities, and broaden your East Coast network at the industry’s only true B2B cannabis expo focusing on the Northeast market. Meet with NCIA members, entrepreneurs, policymakers, industry leaders, and services providers on 40,000 square feet of expo floor. It’s all happening February 19-20, 2020 at Boston’s Hynes Convention Center – Registration is now open!
Banking on the Cannabis Industry
One of the biggest challenges facing the legal cannabis industry has always been access to banking. Despite more than half of U.S. states passing some form of cannabis legalization, its status as a Schedule I drug means banks and credit card providers risk violating federal money laundering laws should they choose to work with cannabis business owners.
The absence of sensible banking policies has resulted in the state-led, multi-billion dollar industry to rely upon cash for everything – from consumer transactions to payroll to tax payments, and more. A significant reason why 2019 was such a historic year for the industry was thanks largely to House approval of the Secure And Fair Enforcement (SAFE) Banking Act, a beacon of hope for an industry long encumbered by having to be cash-only, not having access to funding through loans, or being able to write off common expenses like any other legal business. As legalization expands into the Northeast market, we explore the progress made – and what still needs to happen – when it comes to banking for the cannabis industry.
Banking on SAFE
If passed by the Senate, the SAFE Banking Act would essentially allow federally insured financial institutions to work with legal cannabis businesses without the prospect of being punished under federal law. As it’s currently written, the legislation would prevent federal legislators from limiting or removing access to insurance, loans and other financial services, or to take punitive action against banks that choose to serve compliantly-operating, legal cannabis businesses. Under the law, banks and other institutions would not be “liable or subject to forfeiture” for offering any financial services, including loans, to cannabis companies or ancillary businesses.
Even if the Senate greenlights the SAFE Banking Act however, that doesn’t mean all of the industry’s monetary problems are solved. A recent decision by the U.S. tax court upholds that tax code 280E, which prevents businesses that participate in the trafficking of a Schedule I or II controlled substance from receiving tax deductions, is constitutional. That means, for now, cannabis companies will continue to be prevented from deducting the same operating expenses that businesses in traditional sectors can, adding to what is already an undue financial burden for business owners in this burgeoning industry. If nothing else, these complications go a long way to illustrate the importance of making cannabis Federally legal or at minimum, removing it from the list of controlled substances.
Join the conversation during the educational session, “Moving Money, Banking Money, and Cannabis Cash,”at the National Cannabis Industry Association’s Northeast Cannabis Business Conference. Formerly Seed to Sale Show, #NECannaBizCon allows you to broaden your East Coast network, explore business opportunities, and learn from the latest regional insights at the biggest cannabis tradeshow to focus on the emerging Northeast market. Meet with NCIA members, policymakers, industry leaders, entrepreneurs, and service providers on 40,000 square feet of expo floor. It’s all happening February 19-20, 2020 at Boston’s Hynes Convention Center – Registration is now open!
Cannabis Products for Pets
From chocolates to skincare to elixirs and more, CBD is everywhere, and according to Brightfield Group the category is forecast to generate $23.7 billion by 2023. Retail chains have already started carrying CBD, exposing consumers to products containing the non-intoxicating cannabinoid even in markets where cannabis remains illegal. And now pet owners have embraced the trend, creating a consumer segment projected to be worth an estimated $1.16 billion by 2022 in the U.S. alone. In this post, we explore a few of the implications hemp and cannabis business owners will need to consider as the Northeast prepares for both expanding legalization and the emerging pet CBD industry.
The Confusing CBD Landscape
Veterinarians should be the primary resource for pet owners interested in giving their pets CBD, but figuring out what they can recommend is often easier said than done.
That’s because one of the biggest misconceptions about CBD is that it’s federally legal due to the passage of the 2018 Farm Bill. In reality, the bill removed hemp from the federal Controlled Substances Act but left it up to individual states to set their own laws with regard to hemp. Confusion over legality has led to a number of hemp-derived CBD products, including options for pets, being available in stores and websites that may not be legally authorized to sell them.
Additionally, the FDA has not approved CBD for human or animal use. This not only means that these products are currently being sold in an unregulated market, but research into the long-term effects of CBD use is only just getting started. Pet owners need to be aware that while some CBD products have been formulated with their furry friends in mind, there’s very little data on the impact CBD has on animals. Lack of regulatory oversight also means several CBD brands may use false or misleading claims to market their products. Giving animals CBD products made for humans also presents a risk because differing dosage needs and the fact that some ingredients meant for human consumption may not be safe for animals.
For veterinarians, not only is understanding what’s legal in their jurisdiction crucial, but obtaining education on what CBD is and seeking third-party testing results from pet CBD companies are the best ways to ensure that you’re equipped to advise pet owners.
Join us as we examine the veterinary medical cannabis landscape during the educational session, “Vital Pet Cannabis Industry Implications,” at the National Cannabis Industry Association’s Northeast Cannabis Business Conference. Formerly Seed to Sale Show, #NECannaBizCon invites you to seek emerging business opportunities, broaden your East Coast network, and explore the latest regional insights. Meet with NCIA members, entrepreneurs, policymakers, industry leaders, and service providers on 40,000 square feet of expo floor when the only true B2B cannabis tradeshow to focus on the growing Northeast market arrives at Boston’s Hynes Convention Center February 19-20, 2020 – Registration is now open!
The State of Cannabis Delivery in Massachusetts
One year after opening its first adult-use dispensaries, Massachusetts reportedly generated nearly $400 million in revenue, resulting in $61 million in total taxes. It was a remarkable outcome for the state, whose voters approved transitioning from medical to adult-use cannabis in 2016. While the Cannabis Control Commission (CCC) has been hard at work updating the state’s regulatory framework, in September 2019 the governing body approved rules for a new license type: adult-use cannabis delivery. Massachusetts is helping set the tone for expanding legalization in the Northeast, and in this post we explore how things are shaping up for cannabis delivery services in The Bay State.
The CCC’s updated rules effectively broadened delivery, which has only been allowed for medicinal cannabis since 2017(1), to also include adult-use products. With the introduction of this new licensing opportunity, cannabis business owners are able to participate in an area of the industry currently dominated by illicit market players(2).
The new rules stipulate that delivery services must sign contracts with licensed retailers, unless they are a microbusiness licensed to deliver their own products. Deliveries are allowed within an 8:00 AM – 9:00 PM window but will not be available to college and university dormitories, hotels, bed-and-breakfasts, federally subsidized housing, or the over 150 cities that have placed a ban or moratorium on adult-use cannabis(3).
Delivery employees are required to work in pairs, will be monitored by GPS, and are authorized to carry no more than $10,000 worth of product at once in order to lessen the risk of robbery. Further addressing safety concerns, regulations allow for the integration of electronic and online payments as alternatives to cash. Delivery employees are also required to wear body cameras, with two key conditions: only law enforcement will be given access to footage when needed as part of an official investigation, and videos must otherwise be deleted after 30 days.
While it will be some time before adult-use delivery rolls out statewide, for the first two years the CCC will only award licenses to participants in the state’s cannabis social equity program. Massachusetts factored social equity into its adult-use legislation from the onset to help ensure participation by communities disproportionately targeted by cannabis prohibition and enforcement. By providing an option for small business owners that represents a more even playing field and requires significantly less startup capital than retail and cultivation for example, Massachusetts continues to work toward the formation of an inclusive, equitable cannabis industry.
Join the conversation during the educational session, “Delivery in the Northeast,” at the National Cannabis Industry Association’s Northeast Cannabis Business Conference. Formerly Seed to Sale Show, #NECannaBizCon invites industry experts and entrepreneurs to explore emerging business opportunities, expand their East Coast network, and engage with the latest regional insights at the only true B2B cannabis expo focused on the expanding Northeast market. Meet with NCIA members, entrepreneurs, policymakers, industry leaders, and service providers on 40,000 square feet of expo floor. It’s all happening February 19-20, 2020 at Boston’s Hynes Convention Center – Registration is now open!
Environmental Sustainability in the Cannabis Industry
The steady rise of cannabis legalization comes at a time when the climate crisis has reached its tipping point. As an agricultural product that relies upon heavy water use for outdoor cultivation and significant electricity for indoor cultivation, produces a large amount of waste, and has been required by law to adopt childproof packaging and other single-use plastics before reaching the consumer, cannabis is already proving to have a negative impact on the environment. Yet while the high cost of managing a business in a sector as heavily regulated as this one can make implementing large-scale changes challenging, the cannabis industry has long held a reputation for working to implement its own sustainable practices in an effort to reduce its carbon footprint.
As the Northeast prepares to become the next emerging cannabis market, we explore different ways individual jurisdictions and cannabis business owners have addressed making environmental sustainability a priority.
Creating A More Environmentally Sustainable Industry
Since legalization exists under a state-led model, the industry has looked to individual jurisdictions for help with the creation of environmental best practices. Massachusetts’ energy guidance, for example, stipulates that cannabis businesses must demonstrate compliance in the areas of energy efficiency, renewables, electricity demand reduction, and engagement with state energy efficiency programs. With a focus on educating the consumer, Denver established a set of guidelines that clarify for consumers which cannabis packaging is recyclable. And with the passage of the 2018 Farm Bill, hemp has returned to the spotlight as a potential source for biodegradable plastic, sustainable building materials, and a number of eco-conscious applications.
In the meantime, cannabis business owners and operators are working towards greater sustainability by activating their own initiatives. Replacing outdated lighting technology with newer, better full-spectrum LED lights, for example, helps improve energy efficiency in indoor cultivation – which represents a reported annual energy expenditure of $6 billion. Individual brands aren’t waiting for regulators, opting instead to establish their own recycling programs to address post-consumer waste(1), and even refining existing technology to be inherently childproof, reducing the need for separate protective packaging(2).
Join us Thursday, February 20, 2020 when we continue the conversation during the educational session, “Environmental Sustainability in the Cannabis Industry,” at the National Cannabis Industry Association’s Northeast Cannabis Business Conference. Formerly Seed to Sale Show, #NECannaBizCon is the premiere cannabis trade show to focus on the emerging Northeast market. Entrepreneurs are invited to explore emerging business opportunities, expand their East Coast network, and learn from the most up-to-date regional insights... Meet with NCIA members, entrepreneurs, policymakers, industry leaders, and services providers on 40,000 square feet of expo floor when it all happens February 19-20, 2020 at Boston’s Hynes Convention Center – Registration is now open!