Business
Marijuana advertisers face hurdles with Twitter’s newest ad policies
Twitter might have further eased its rules for cannabis advertising, but the changes don’t seem to have made it any easier for marijuana businesses to take advantage of the social media platform’s wide reach.
Regulatory red tape, Twitter’s unfamiliarity with the cannabis industry and cost are among the continued stumbling blocks.
For example, Twitter requires advertisers to be a Twitter Blue or Verified Organization subscriber, which enables them to add blue or gold check marks to their accounts, respectively.
It costs $7 a month to get the blue check mark or $1,000 a month for a gold check mark – the latter being an expense many smaller marijuana businesses can’t afford, particularly when companies are struggling financially because of low wholesale and retail prices and fierce competition from the illicit market.
“As a smaller company, we’re very cognizant of our costs, and the cannabis market isn’t what it used to be,” said Nikki Stanley, director of marketing for multistate operator Battle Green, whose retail brands include UpTop in Massachusetts and Terrasana Cannabis Co. in Ohio.
The company’s Neighborgoods brand is available in Massachusetts and will soon launch in Ohio.
Stanley said that aside from being cost-prohibitive, the platform doesn’t necessarily reach the audience Battle Green is trying to capture.
Instead of advertising on Twitter, Battle Green works with the marketing technology firm Surfside to place programmatic advertising throughout ad networks that targets customers who have shopped in its stores – and the company hopes to entice them back.
“Twitter seems to be more about people interested in the business side of cannabis versus the consumer,” she said.
“You see consumers engaging more on Instagram and Reddit, not on Twitter.”
Twitter pivots
The privately held social media platform opened the door to U.S. marijuana advertising in February.
But cannabis companies reported mixed results as they started experimenting with marketing on Twitter.
“We have gathered meaningful feedback from the cannabis industry which we have taken into consideration to create even more opportunity,” Alexa Alianiello, Twitter’s head of sales and partnerships, wrote in an April blog post announcing the latest changes.
Under the newly revised rules, cannabis advertisers are allowed to promote branding and product-specific content.
The ads can only feature products in their packaging.
And the ads cannot include pricing, offer promotions or discounts or promote giveaways, sweepstakes or contests.
In addition, Twitter is permitting ads in new marijuana markets, although its publicly posted policy for advertising drugs doesn’t spell out those medical and recreational markets.
According to Rosie Mattio, CEO of New York-based cannabis industry marketing firm Mattio Communications, Twitter is permitting medical cannabis ads targeting users in Alabama, Arkansas, Florida, Minnesota, Mississippi, Missouri, Oklahoma, Pennsylvania, Puerto Rico, Rhode Island, South Dakota and West Virginia.
Adult-use marijuana ads also are permitted in Missouri’s new adult-use market.
At the same time, cannabis companies advertising on Twitter must sign an attestation form indicating they are licensed to do business in the states their ads will appear.
They can target only customers 21 and older in jurisdictions where they are licensed.
Potential benefits
Cannabis businesses that choose to use the platform will see benefits in terms of being able to educate consumers about their products, Mattio said.
“Now they can promote their products with great content in the ad copy,” she noted. “Now you can have photos.”
The advantage of advertising on Twitter versus the ways cannabis companies have been able to reach their audience up until now is that they can talk about their specific products rather than educate consumers with broad brushstrokes.
“You can be more thoughtful about demographics,” Mattio said.
“You can target consumer profiles instead of just throwing it out into the ether.
“You can create copy that resonates with that consumer and be very targeted with the message about what products go to what markets and what consumer profile.”
Hemp stumbling block
CBDistillery, a Denver-based manufacturer of hemp-derived CBD, was the first CBD company to launch ads on Twitter, company President and CEO Chase Terwilliger said.
Although the company sells its products in all 50 states, it’s succeeded in getting Twitter ads in only 20 – even though hemp was legalized federally in the 2018 Farm Bill.
“(Twitter is) new to this, too, and they’re obviously going through a lot of changes,” he said. “We have to walk them through the process.”
Terwilliger suggests companies that want to try the platform determine which states they want to start advertising in, ensure they have the correct licenses and labels, and then contact Twitter.
Although CBDistillery hasn’t yet seen a return on its investment, Terwilliger said the ads have led to sales.
“We’re being patient with it,” he said. “With digital advertising, it takes some time to get the right formula.
“We’re still in the testing phase, but we’re confident it will produce a meaningful ROI in the future.”
Red tape, paperwork
It’s been more difficult for some other cannabis companies.
Chicago-based PharmaCann, a multistate operator that is one of the largest vertically integrated marijuana companies in the U.S., has been trying to advertise on Twitter for more than a month.
The privately held company has been adjusting to Twitter’s regulations and restrictions by building new creative and defining new audiences in its network.
PharmaCann couldn’t use existing campaigns on Twitter, which delayed its launch on the platform.
The company also had to figure out how to accurately track conversions.
“We wanted to be live for 4/20,” said Bryan Benavides, PharmaCann’s director of digital marketing, referring to the unofficial April 20 cannabis holiday.
“We had to fill out forms and prove we have licenses in certain states and markets.”
But even for a large company such as PharmaCann, the $1,000-per-month fee to get the blue check mark is off-putting.
“I haven’t committed to that quite yet,” Benavides said. “I’m already spending money.
“Why do I have to spend more just to get the check mark?”
Lack of understanding
Before announcing it would allow marijuana ads on its platform, Twitter contacted Boulder, Colorado-based edibles maker Wana Brands.
After reviewing the rules, Wana Chief Marketing Officer Joe Hodas said he determined that the social media company didn’t understand the cannabis industry and how the pieces fit together.
Hodas and his team suggested ways to rewrite the rules to make them less onerous, but Twitter refused to revise them.
“We are a cannabis company, so we have to sign all this additional stuff saying we’re not responsible for anything,” Hodas said.
“It’s inconvenient, but it’s not a deal-killer.”
Hodas’ first idea was to run specials on Wana products with specific dispensaries, but Twitter’s rules prohibit it.
He’d also like the ability to insert the company into conversations on the platform to start a dialog with potential customers about conditions its products can address.
“Twitter offers us access to folks who aren’t thinking of cannabis as a solution,” he said.
“I like what Twitter can potentially do for us, but if we’re not allowed to hyper-locally target, it probably doesn’t hold as much value for me.
“I could geotarget with their sophisticated targeting capabilities. I need something that helps me target and convert and drive sales so I can measure it.”
Other social media platforms, including Facebook, are starting to consider allowing cannabis ads but may be too late to the party if Twitter grabs a big portion of the market.
“The advertising dollars will be spoken for by the time they get there,” Hodas said.
Source: https://mjbizdaily.com/marijuana-advertisers-face-hurdles-with-new-twitter-ad-policies/
Business
New Mexico cannabis operator fined, loses license for alleged BioTrack fraud
New Mexico regulators fined a cannabis operator nearly $300,000 and revoked its license after the company allegedly created fake reports in the state’s traceability software.
The New Mexico Cannabis Control Division (CCD) accused marijuana manufacturer and retailer Golden Roots of 11 violations, according to Albuquerque Business First.
Golden Roots operates the The Cannabis Revolution Dispensary.
The majority of the violations are related to the Albuquerque company’s improper use of BioTrack, which has been New Mexico’s track-and-trace vendor since 2015.
The CCD alleges Golden Roots reported marijuana production only two months after it had received its vertically integrated license, according to Albuquerque Business First.
Because cannabis takes longer than two months to be cultivated, the CCD was suspicious of the report.
After inspecting the company’s premises, the CCD alleged Golden Roots reported cultivation, transportation and sales in BioTrack but wasn’t able to provide officers who inspected the site evidence that the operator was cultivating cannabis.
In April, the CCD revoked Golden Roots’ license and issued a $10,000 fine, according to the news outlet.
The company requested a hearing, which the regulator scheduled for Sept. 1.
At the hearing, the CCD testified that the company’s dried-cannabis weights in BioTrack were suspicious because they didn’t seem to accurately reflect how much weight marijuana loses as it dries.
Company employees also poorly accounted for why they were making adjustments in the system of up to 24 pounds of cannabis, making comments such as “bad” or “mistake” in the software, Albuquerque Business First reported.
Golden Roots was fined $298,972.05 – the amount regulators allege the company made selling products that weren’t properly accounted for in BioTrack.
The CCD has been cracking down on cannabis operators accused of selling products procured from out-of-state or not grown legally:
- Regulators alleged in August that Albuquerque dispensary Sawmill Sweet Leaf sold out-of-state products and didn’t have a license for extraction.
- Paradise Exotics Distro lost its license in July after regulators alleged the company sold products made in California.
Golden Roots was the first alleged rulebreaker in New Mexico to be asked to pay a large fine.
Source: https://mjbizdaily.com/new-mexico-cannabis-operator-fined-loses-license-for-alleged-biotrack-fraud/
Business
Marijuana companies suing US attorney general in federal prohibition challenge
Four marijuana companies, including a multistate operator, have filed a lawsuit against U.S. Attorney General Merrick Garland in which they allege the federal MJ prohibition under the Controlled Substances Act is no longer constitutional.
According to the complaint, filed Thursday in U.S. District Court in Massachusetts, retailer Canna Provisions, Treevit delivery service CEO Gyasi Sellers, cultivator Wiseacre Farm and MSO Verano Holdings Corp. are all harmed by “the federal government’s unconstitutional ban on cultivating, manufacturing, distributing, or possessing intrastate marijuana.”
Verano is headquartered in Chicago but has operations in Massachusetts; the other three operators are based in Massachusetts.
The lawsuit seeks a ruling that the “Controlled Substances Act is unconstitutional as applied to the intrastate cultivation, manufacture, possession, and distribution of marijuana pursuant to state law.”
The companies want the case to go before the U.S. Supreme Court.
They hired prominent law firm Boies Schiller Flexner to represent them.
The New York-based firm’s principal is David Boies, whose former clients include Microsoft, former presidential candidate Al Gore and Elizabeth Holmes’ disgraced startup Theranos.
Similar challenges to the federal Controlled Substances Act (CSA) have failed.
One such challenge led to a landmark Supreme Court decision in 2005.
In Gonzalez vs. Raich, the highest court in the United States ruled in a 6-3 decision that the commerce clause of the U.S. Constitution gave Congress the power to outlaw marijuana federally, even though state laws allow the cultivation and sale of cannabis.
In the 18 years since that ruling, 23 states and the District of Columbia have legalized adult-use marijuana and the federal government has allowed a multibillion-dollar cannabis industry to thrive.
Since both Congress and the U.S. Department of Justice, currently headed by Garland, have declined to intervene in state-licensed marijuana markets, the key facts that led to the Supreme Court’s 2005 ruling “no longer apply,” Boies said in a statement Thursday.
“The Supreme Court has since made clear that the federal government lacks the authority to regulate purely intrastate commerce,” Boies said.
“Moreover, the facts on which those precedents are based are no longer true.”
Verano President Darren Weiss said in a statement the company is “prepared to bring this case all the way to the Supreme Court in order to align federal law with how Congress has acted for years.”
While the Biden administration’s push to reschedule marijuana would help solve marijuana operators’ federal tax woes, neither rescheduling nor modest Congressional reforms such as the SAFER Banking Act “solve the fundamental issue,” Weiss added.
“The application of the CSA to lawful state-run cannabis business is an unconstitutional overreach on state sovereignty that has led to decades of harm, failed businesses, lost jobs, and unsafe working conditions.”
Business
Alabama to make another attempt Dec. 1 to award medical cannabis licenses
Alabama regulators are targeting Dec. 1 to award the first batch of medical cannabis business licenses after the agency’s first two attempts were scrapped because of scoring errors and litigation.
The first licenses will be awarded to individual cultivators, delivery providers, processors, dispensaries and state testing labs, according to the Alabama Medical Cannabis Commission (AMCC).
Then, on Dec. 12, the AMCC will award licenses for vertically integrated operations, a designation set primarily for multistate operators.
Licenses are expected to be handed out 28 days after they have been awarded, so MMJ production could begin in early January, according to the Alabama Daily News.
That means MMJ products could be available for patients around early March, an AMCC spokesperson told the media outlet.
Regulators initially awarded 21 business licenses in June, only to void them after applicants alleged inconsistencies with how the applications were scored.
Then, in August, the state awarded 24 different licenses – 19 went to June recipients – only to reverse themselves again and scratch those licenses after spurned applicants filed lawsuits.
A state judge dismissed a lawsuit filed by Chicago-based MSO Verano Holdings Corp., but another lawsuit is pending.
Source: https://mjbizdaily.com/alabama-plans-to-award-medical-cannabis-licenses-dec-1/
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