Why Aren’t Cannabis and Augmented Reality Best Buds?
By: Jason Steinberg
Tags: Digital Marketing, Marijuana, Cannabis, Augmented Reality, Marketing

A recent tweet from 8th Wall’s Andrew Woodberry sparked an internal conversation at Pretty Big Monster: Where are the XR activations for the marijuana industry?

Cannabis and AR, Where’s the Love?

I’ve thought the same thing for years now. After all, it’s proven incredibly successful for marketing spirits and alcoholic drinks. Diageo, 19 Crimes, Miller Lite and others have successfully driven awareness, engagement and sales with XR.

As an upstart product, full of challenger brands, creative communication should be natural for the cannabis category. Ever since California allowed for recreational use of marijuana, I was certain that the $17 billion industry would embrace the full range of digital marketing techniques, including Augmented Reality.

I’ve spoken with dozens of potential advertisers in the Cannabis vertical, from dispensaries to cultivators, and all expressed interest yet not one has pulled the trigger. Why ?

Selling Weed is Expensive

To an outsider, the economics of marijuana sound great; it has an enthusiastic audience and seems to be gaining ground in cultural acceptance every week. But in reality the overhead is high, the competition is fierce (there’s still an uncontrolled black market), and one of the most powerful tools for advertisers is off the table, tax write-offs for ad expenditures.

For most businesses, 100% of adverting expenditures is tax deductible. Not so for cannabis. It’s just one more way that high taxes are squeezing margins on the marijuana businesses.

This has the effect that any marketing investment is generally performance driven and focused on driving customers to retail environments for purchase.

Outside of a few notable exceptions, brand building, driving consideration, creating engagement and other activities that AR excels at is simply a bridge too far for most cannabis advertisers.

High Expectations, But No Uptake

Over the past few years, we’ve pitched to a fair share of brands and dispensaries and even became a founding member of the CannaTech Network.

We’ve pitched Social AR and augmented artwork to a high-traffic hash bar. Proposed advanced image recognition and augmented reality quality seals to an upstart disposable pen maker. Even discussed marker-based video explainers with a former basketball star who was rolling out his own line of cannabis products.

Most prospects clearly understood the value AR brings to the table, while some were simply interested in the new and the next. But none bought in, even with generous incentives.

What makes cannabis so averse to immersive digital marketing techniques?

Digital Advertising is Harsh for Cannabis

An obvious impediment is restrictive policies by the major publishers. It’s hard enough not to get kicked off of social networks entirely let alone undertake an ad campaign.

Google’s ad policy clearly states that “ads for substances that alter mental state for the purpose of recreation or otherwise include ‘highs’” are not allowed.” That means no Paid Search, which is the bedrock of digital marketing.

Paid social is the same. Cannabis companies are free to maintain a social media presence to engage their customers, but it is still against Facebook’s advertising policy to promote cannabis through Instagram and Facebook advertisements.

What about programmatic display? Sure, there are niche ad networks that allow for marijuana messaging, but they don’t have the reach of Google’s network and programmatic is notoriously challenging for small advertisers.

Even then, the creative restrictions are daunting. No people, no talking about consumption, no health claims, no using terms like “weed,” “cannabis,” and “marijuana.” If you can’t talk about the product in terms the consumer will understand and respond to, what’s the point?

This leaves organic and direct communications — SEO, traditional social, SMS and similar channels — not the most exciting and it’s driven by consumer interest.

Because most of the advertising must be allocated to directly drive sales, the brand building (if any) is left to print and out of home. Digital loses out.

I suspect the inhospitable nature of digital marketing has soured many potential marketers on the channel as a whole.

The Possibilities for AR Are Ready to Light Up

Eventually, cannabis marketers will find their way to the opportunities in digital. The same successful tactics that traditional brands, products and retailers rely on will be adopted by cannabis.

For example:

Social AR including Snapchat and Instagram lenses will allow fans to become the brand and evangelize it on behalf of advertisers as a reference point for their own personalities.

Immersive 360 environments and portals will bring to life the provenance and visualize the care that goes into the product and the benefits it offers.

3D representations of the product will be able jump off of packages allowing the product to speak for itself and differentiate it while in aisle.

It will all happen… one day.

If I missed some exceptional cannabis marketing activations, share the examples below.