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Connecting With Customers Under California’s Strict Advertising Regulations

Californians planning to run cannabis businesses under MAUCRSA should pay special attention to the new advertising regulations if they want to connect with customers without attracting citations, fines, or worse. Due to the heavy restrictions, many traditional advertising channels might not be available, so creating a message that resonates with customers will require strategy and ingenuity.

26151. (a) (1) All advertisements and marketing shall accurately and legibly identify the licensee responsible for its content, by adding, at a minimum, the licensee’s license number.

Put simply, the above rule means that companies who market cannabis need to be transparent and accountable for the messaging they create. As the industry strives for legitimacy, promoting products professionally will not only help negate the stigma associated with the industry, but it will also provide an opportunity to educate community members that may not agree with ending prohibition. By requiring a legible license number, bad actors will be exposed and companies that play above board will be rewarded at best, and allowed to advertise at least. Marketers and designers should prepare to incorporate the license number on all branded collateral, as the range of items covered under the Business and Professions Code are broad.

26151. (b) Any advertising or marketing placed in broadcast, cable, radio, print, and digital communications shall only be displayed where at least 71.6 percent of the audience is reasonably expected to be 21 years of age or older.

71.6 percent seems excessive — even more so when considering that alcohol doesn’t have the same stipulation and is often advertised during times when much of the viewing audience is under 21, NFL Football being a prime example.

Although many station managers are still opposed to cannabis advertising, there have been more and more radio spots popping up throughout the country. The silver lining here is that media or entertainment companies that have focused on cannabis for years will be there with regular traffic and ideal readers/listeners for organizations who take advantage.

26151. (c) Publish or disseminate advertising or marketing containing any statement, design, device, or representation which tends to create the impression that the cannabis originated in a particular place or region, unless the label of the advertised product bears an appellation of origin.

There are several regions in California with iconic names that resonate throughout the industry: Humboldt, Mendocino, and Trinity — collectively, they are known as the Emerald Triangle. Anyone who’s anyone in this space has heard of the region and probably respect the history, culture, and quality of the people and products that originate there. For years, however, suspect characters have been trading in on the NorCal name to dupe unsuspecting folks into shady deals for a quick buck. The above regulation closes that door and positions the organizations with roots in the Big 3 for success — so long as the end product lives up to the region’s reputation.

So, what businesses can do to reach their ideal audience? Focus on a strategy that brings your customers to the channels you control — primarily your website, social media profiles, and email marketing programs. There have been recent reports of Facebook deleting cannabis business profiles, but further review shows that Facebook had found those companies to be violating specific terms of service. Above all else, make sure to play by the rules. It’s pretty clear that outspending your competition on advertising won’t work due to the restrictions — so it will take ingenuity, a strong brand, and consistent, quality products to thrive in California’s cannabis industry.

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