There’s a popular saying “as California goes, so goes the nation.” The implication being that tech innovation, social and political movements, pop culture trends and more often start in California and then become widely adopted across the country.
This week it became legal to sell pot in California for recreational use. So, as affiliates enter the new year looking for new niches and new opportunities to make money, will the legalization of marijuana in California convince mainstream affiliates to embrace weed as viable online marketing opportunity?
There are 28 other states where cannabis is legal in some capacity. But legalization in California – especially since the Golden State is the largest and most populated state in the US (with 39.5 million residents) – might just represent the tipping point for more online marketers to promote cannabis. which is predicted to do over $7.1 billion in sales in 2017.
According to a Yahoo News/Marist Survey from April 2017, nearly 55 million Americans (22 percent) have used marijuna.at least once or twice in the past year. Close to 35 million are what the survey calls “regular users,” or people who use marijuana at least once or twice a month.
California’s pot legalization is already having an impact. Nearly $2 billion has been invested in the stock market since California’s January 1 statewide marijuana legalization, and shares of companies producing, distributing or selling marijuana soared on Tuesday, Fortune reported.
Cannabis and Affiliates
The cannabis vertical is already growing within the affiliate space. Last year Weed Reader published the top 10 marijuana affiliate programs. These programs (and hundreds more) focus on everything from growing seeds and cannabis growth training to selling edibles and actual marijuana (to medical patients where legal).
Obviously, some affiliates will question the moral and ethical issues of legalization. Those online marketers will likely avoid the space – just as they do other areas considered controversial like adult content websites, online gambling, and some nutriceuticals.
However, some affiliates may opt to promote products that tout that the medical and health benefits of cannabis. Some may choose to pursue the more recreational use aspect as they do with liquor and wine products.
Additionally, there could even be travel affiliates that more aggressively promote California and other states where cannabis is legal as a premiere destination. Think Amsterdam’s tourist messaging in the 1980’s and 1990’s that made it a must-visit location for travelers that wanted to indulge legally.
Additionally, millennials may be a huge factor in deciding whether or not to promote cannabis products. Millennials make up one quarter of the US population with a total of 77 million. (Nielsen). Their generation is larger than the Baby Boomers and 3 times the size of Gen. X. (Aimia). This demographic doesn’t have a social stigma associated with marijuana (52 percent of the estimated 55 million users are millennials). Also, millennials wield about $1.3 trillion in annual buying power. (Boston Consulting Group). They will have the most spending power of any generation by 2018. (Bazaar). And specifically, their spending power is projected to reach $3.39 trillion by 2018. (Oracle).
Although state governments are rolling out more progressive cannabis legislation, marketing marijuana is currently fraught with roadblocks. Mostly because while marijuana is legal in more than half of the US, it’s still illegal on a federal level. This makes advertising and marketing extremely complex. Online marketers fear being liable for aiding and abetting the sale of drugs – a felony crime.
There are, however, some federal law exceptions. They can be granted for “any person authorized by local, State, or Federal law to manufacture, possess, or distribute such items”. Still, social media sites like Facebook and Instagram have strict advertising policies. These policies deny paid posts that “constitute, facilitate, or promote illegal products, services or activities” – including marijuana.
Because of advertising restrictions and inconsistencies in enforcement regarding “educational content,” cannabis-centric social networks have emerged. Cannabis-centric social networks include MassRoots (valued at $44 million with 725,000 users). There is also the social app Duby, which functions like an Instagram for the cannabis savvy. And a glut of digital marketing agencies and consulting practices dedicated to serving the cannabis industry have sprung up.
For now, most cannabis affiliates choose to focus on content and educating the public. That means using traditional digital marketing tactics. Affiliates are blogging, optimizing SEO, linking to influencers in the space, sending out newsletters and email, and establishing partnerships with researchers and doctors for more legitimization.
But that also means those marketers are likely preaching to converted. Reaching new users and increasing brand awareness online is difficult because advertising is restricted.
Cannabis might not be a market for all affiliates. But there’s no doubt it is growing vertical that will evolve over time as pot becomes legalized and more socially acceptable. Affiliates are likely to play a big role in pushing forward this space.