S2
Episode 7
How to Cultivate Thriving Cannabis Marketing Campaigns
About This Episode
We look at how advertisers can create winning campaigns in sensitive industries, like cannabis marketing.
Peter Reitano | Founder, Abacus Agency
Amika Evans | Sales Director, StackAdapt
Transcript
Episode Introduction (00:00:00)
Cannabis is no longer just cannabis. It’s genuinely a lifestyle product in the same way that any other lifestyle product people want to showcase their personal identities through. And so that consumer-oriented approach demands a bit more sophisticated communications and marketing strategy and plan. So find those demographics, build that long-term loyalty, and build out the brand growth.
How Agencies Thrive Introduction (00:00:31)
Curious to know what industry-leading marketers are looking to achieve and the ever-evolving digital landscape. The How Agencies Thrive podcast by StackAdapt is dedicated to helping the new breed of forward-thinking savvy, lean and mean marketers win in the rapidly evolving digital landscape. Time to thrive.
Matt (00:00:59)
While cannabis is a highly regulated industry, in 2020, sales grew by 67%. In this episode, we’re joined by Peter Reitano from Abacus Agency and Amika Evans from StackAdapt. To learn how using compliant tactics and leveraging emerging technology can help advertisers thrive, even when working in sensitive verticals like cannabis. Hey, everyone, welcome to today’s episode. My name is Matt Everett. I’m the host of the How Agencies Thrive podcast. And I’m also the Education Development Manager at StackAdapt. Today, I’m joined by Peter Reitano from Abacus Agency and Amika Evans from StackAdapt. To talk about all things related to sensitive verticals, Peter and Amika, it’s great to have both of you on to kick things off. What I’m going to do here is pass it over to the two of you to tell us a little bit about yourself, including how long you’ve been in the industry and what you consider to be your areas of expertise.
Peter (00:01:51)
So my name is Peter Reitano. I’ve been building products and brands for the better part of 15 years, either through my agency work or through companies that I’ve started external to that a lot of kind of nutraceuticals functional health products. Most recently, say over the last five years, I’ve done a lot of work in cannabis. My agency Abacus was lucky enough to get involved with cannabis pre-legalization here in Canada. And we work with all of the major LPs. And then we span out a company called High Noon, which was a cannabis CPG company, you know, producing a variety of different skews all in the Canadian market. I’m also part of a company called Dodi, which is a US California-based brand with Marshawn Lynch, we sell blunts in the state. And then I’m also a part of a company called Gwella. And you can find that through meetgwella.com. And that is a company that’s producing consumer brands in the psychedelic space. So I do a lot of work in the, you know, heavily regulated emerging markets world, which creates a lot of interesting challenges given you can’t market and brand in the same way that you can if you were just, you know, if you had another standard CPE, CPG, or DTC product that you’re advertising on Facebook. So my career has definitely gone in my background is marketing branding, kind of acquisition for, you know, all sorts of brands, e-commerce, but I’ve got a particular kind of specialty in heavily regulated, kind of quote-unquote advice industries like cannabis and psychedelics.
Matt (00:03:40)
Yeah. Thanks so much, Peter. Amika, a little bit about you.
Amika (00:03:45)
My name is Amika Evans. I have been working in the programmatic space for about 10 years now. It found me, I did not find it. But I love it. I love programmatic. Keeps me definitely on my toes here. So, of course, I work at StackAdapt. I’ve been a StackAdapt for three and a half plus years. So I hold an area of expertise in a few verticals. One of them, of course, being cannabis. Otherwise, I would not be on this call today, I would think. But you know, I’m a fully-faceted type of individual. I would like to pride myself on just having expertise in several different verticals. And yeah, so that’s basically who I am in a nutshell.
Matt (00:04:30)
Thanks so much for Amika. To kick things off. Peter, I want to pass the torch over to you because back in 2020 pre-pandemic, almost like a month before everything happened, you and I had a chance to sit down at StackDay in Florida, and we were talking about the present and the future of the cannabis industry and one thing that you mentioned to me at the time was that the industry was sort of going through this slump as cannabis companies were closing or being bought out. So kind of in hindsight Looking at February 2022, even in that first year of the pandemic, how did you see that cannabis companies and the cannabis industry as a whole was reacting to these changes? And did the slump continue? Or did a lot of these companies have to adapt with the pandemic?
Peter (00:05:17)
Yeah, I mean, at the time, it was, and there are two parts of this, looking at the industry, right, there’s the kind of public markets, which is where the vast majority of capital was raised in Canada, and then there’s, you know, just private businesses, and you know, what’s going on in both and what’s going on in the consumers mind, you know, so I think that common was largely around the public markets, we’d seen a huge kind of hype cycle, these kind of enormous valuations and tons of money being raised. And then, you know, massive consolidation, and frankly, the rubber hit the road where these businesses had to start making money and making brands and they couldn’t just, you know, build out enormous fields of cannabis and kind of promised future revenue, they actually had start making it, which is, you know, where, where we saw the kind of the some somewhat of a backlash in the public markets, but I think it was, it was enormously healthy, and for the businesses that were, you know, producing brands and doing things that consumers liked, you know, that only got better. We’re seeing great brands, and, you know, a lot of interesting moves, you know, some brands, for example, Canopy has been busy buying out a lot of the top brands, so they just got bought out Ace Valley, which, you know, is was a pretty big brand, that they bought it up for a lot of money in it, you know, essentially signaling the Canopy as a big bank balance that can’t build their own brand. So they’re, you know, buying, buying people’s brands, who can build brands like Ace Valley. So there’s still a lot of kind of room for growth. And a lot of interesting kind of moves being made a lot of a lot of great brands that have actually have intrinsic value, like an Ace Valley, you know, there’ll be a bunch more purchases and consolidations like that, and there’s still a bunch of great people in this space, I would say as well, like, you know, over the last couple of years, focus certainly on the public market side is switched away from Canada into the US now we’re seeing more and more kind of liberalization, we’ve seen more states come online, New York. And so tremendous amount of excitement, and, you know, kind of new businesses popping up and all of these states, so tons of growth potential, south of the border, and that’s, you know, we’re talking 10x opportunity, just from population size. So tons of growth, tons of opportunity, we’re seeing kind of Europe come online, more and more, the European market is largely medical, but it will shift to wreck some of the continent, Portugal, places like that. So we’re really still in the first innings of cannabis, you know, cannabis kind of had its hype cycle, but there’s just an enormous amount of growth to be had, as the rest of the world comes online, and we start to see like real quality brands being established.
Matt (00:08:14)
Peter, another point that I wanted to ask you about is, you know, again, in that conversation that we had, almost two years ago, you mentioned that a big play for a lot of these brands was focusing on awareness, and you know, really just building the brands getting in front of consumers as much as they can, rather than focusing on driving conversions. Has this changed at all in the last two years? Or is it still sort of the same case, in your opinion?
Peter (00:08:38)
It’s just hard to drive for conversions when you’ve got it certainly in Canada, because you’re either buying through the OCS or in-store. So there’s limited ways you can track all the way through to purchase, you know, we do a bunch of stuff, we you know, we obviously run ads on StackAdapt native networks, we do a lot of Snapchat, you know, which allows for cannabis advertising. There’s a boat. So there’s a bunch of stuff within those platforms, but it is largely kind of consumer awareness building kind of content marketing style advertising versus, you know, driving to a location and, you know, tracking a conversion all the way through to the end. It’s just, it’s just very difficult in the space to do that.
Matt (00:09:27)
And, Amika, I’m also really interested to hear from you. And, you know, I’m wondering what kind of changes did you notice in the industry from the beginning of the pandemic to now and how well do you think some of these brands that you’ve worked with have adapted over the last two years?
Amika (00:09:43)
Yeah, so from my point of view, as you know, being a part of a DSP, what I’ve noticed was that at the beginning of the pandemic, the change was real. And, basically, what I mean there is that as a result of the consumer habits shifting in the industry, the industry itself had no choice but to react. And they did such, I think, pretty well. And pretty smoothly. So what I’ve observed in the last year just being you know, on this side of the pole, as part of a DSP was that SSPs were rapidly increasing their supply, to be able to yield and just garner some more of that, you know, that budget, and just have a play in the cannabis industry. You know, with the stay-at-home order. Let’s be really frank, people were gravitating to things that were, you know, just recreational at this point, if it was not medicinal, it was recreational. So it was really cool to see such a rapid shift and a really impactful pivot.
Peter (00:10:48)
Yeah, I’d echo that. I mean, we, I think the, the sales statistics speak for themselves during the pandemic. I mean, we definitely saw growth from the, from the consumers, people consuming more, more recreationally people consuming different types of skews. So, you know, I think that was the general trend anyway with kind of cultural normalization, there’s, you know, high consumption, but certainly being locked at home, we saw vice purchases, kind of go through the roof alcohol, as well, obviously. But you know, cannabis definitely, definitely benefited from that.
Matt (00:11:22)
You know, I was gonna actually ask both of you next about some of these biggest areas of growth that you’ve noticed in the industry, but I think both of you kind of hit the nail on the head there. So I think what we could do is shift a little bit and talk more about really what this podcast is about is advertising trends. And I’m interested to know from both of you, what advertising trends you’ve observed with some of these brands in the cannabis industry over the last two years as it’s continued to boom, so yeah, Peter, I’ll start with you about some of these trends, then a Amika, I’m interested to hear your thoughts as well.
Peter (00:11:55)
Yeah, I mean, you know, aside from the the stuff that I think we talked about last time, there’s some really interesting plays going on that I like, there’s a cool platform in Ontario, I think it’s expanding out called toke text that leverages SMS. So basically, the value prop is, by the way, used to by, you know, off your dealer. And so you can you get a text, you want to try this product, it’s, it’s synced up with your local store, you can say, yes, you can go and pick it up. It’s kind of it’s very seamless. So there’s lots of little platforms coming up like that, you know, aside from this, there’s in-store stuff going on where, you know, you can walk into a store, and you know, on those kind of informational panels, you can buy sponsored posts on there, things like that. But you know, it’s, we’re not seeing any traction on Facebook, still a Google, these are all still completely off limits. So in terms of digital platforms, our spend is largely kind of native programmatic, Snapchat, some Twitter, but you have to be an LP to be able to get on Twitter. And then some kind of cool, we’ve seen a lot of brands do some cool, interesting, organic plays on TikTok, because their organic reach is so high there. So you don’t need to advertise. You obviously need to be careful about what you’re doing the type of content or the regulations still apply. Your tick tock you even see like fully Green Market operators on there, which is interesting. There’s kind of a little bit, there’s a little bit of a gray zone, which I think is probably going to shut down. But, certainly, from a reach perspective, if you can get the content, right, TikTok seems to be a pretty decent platform for people within the regs. So yeah, that’s generally what I’m what I’m seeing in terms of channel mixes.
Amika (00:13:54)
So it goes without even saying that the shift in consumption as a consumer was also something that, you know, cannabis retailers and brands also have to consider. So, you know, just moving away from those traditional means, such as, like, out of home and print, some linear TV for that matter, and going up just to echo what Peter just said, you know, more into digital programmatic, and some social channels as well. This is exactly what we’ve observed. And some of the trends that you know, the in the vertical itself is taking on as well. What’s really interesting is that I also to echo what Peter was saying just about some of the other, you know, just little niche companies popping up. I find that, you know, they’re trying to make it as such that cannabis users are not kind of blacklisted anymore, but instead kind of embracing you know, the consumption that is King Cannabis and coming up with, you know, products and services to support that. And, you know, it’s funny that we’re having this conversation today because my cousin, he actually has a blog called blunt talks. And, apparently, there’s a company called IX experience high b&b. And what this company is, is effectively an Airbnb is a company that sources Airbnb that are cannabis friendly. So it’s very interesting and how the shift has been taken on, you know, of course, from our perspective in what is advertising, but also from a larger perspective, to just kind of, you know, except and make, you know, cannabis a lot more acceptable.
Matt (00:15:41)
That’s a good point, and Amika that, you know, kind of the the feeling around cannabis and cannabis advertising. It’s definitely lightened up a lot. Especially since legalization in Canada. You know, it’s not as he said this blacklisted things like a lot of businesses are starting to adapt to it. And people are a lot more friendly to it as well. And one other question I did want to ask kind of on the on the advertising note is something, especially StackAdapt, Amika, I’m sure you’ve you’ve been in the loop on a lot of this as well as is this notion of emerging technologies and contextual advertising, especially with its use case in sensitive verticals like cannabis, it’s much more comprehensive and, and safer for advertisers to utilize this technology. So I’m interested to know, from both of you what role you think that these new solutions that are coming out, have in the future success of advertising in a sensitive vertical like cannabis, and does technology help us navigate compliance better?
Amika (00:16:44)
That’s a great question. So with regards to, you know, the emerging technology, and some of the solutions and how we can help navigate compliance, you know, I think anyone in the industry, you know, when it comes to online market and such, everyone just wants reassurance, whether it’s the brand, the DSP, this the SSP, what have you. So what I’ve observed is that, you know, compliance packages are, you know, the most clutch thing right now. And I think that’s one thing that, you know, us as a DSPS stack that we do very well in ensuring that we have these preset packages for verticals, sensitive verticals such as cannabis. But Further to that, you know, people love the idea of a private marketplace deal because, you know, prior premium inventory, be you know, it’s the placement of the ads the N-word again, were reassured that you know, the ad is placed on a placement that is acceptable for the output to the consumer. So, these are some of the ways in which I see the emerging tech and for, you know, a sensitive verticals such as cannabis.
Peter (00:17:57)
Yeah, I love the use of the word clutch. And, you know, I echo the same thing. I mean, it’s, you know, it’s all about risk mitigation, especially in a vertical like this. I mean, if you’re advertising a new, you know, advertising to the wrong age group, etc, etc, if you do get pulled up, there are quite serious ramifications to it in, in cannabis. You know, forget about fines, you can lose your use, if you’re an LP, you can lose your license. So, you know, the ability to target age groups and all of that kind of stuff. And, you know, look, locate all of it helps, you know, mitigate the risk of running ads, which you know, there are a bunch in cannabis.
Matt (00:18:40)
Perfect. If you know what, I think with that in mind, this is the perfect time to take a quick break. And when we come back, I think it would make sense for us to look at the future of advertising for sensitive verticals like cannabis and really uncover new strategies that advertisers can use to win in this industry. So to both of our guests, thank you again, and we’ll take a quick break and when we come back, we’ll speak to the future of cannabis advertising.
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Matt (00:19:43)
Welcome back, everyone. In the second half of the episode, I’d really love to provide our listeners with tactical strategy that they can apply to their upcoming campaigns. cannabis sales are increasing legalization movement is growing stronger. So Peter and Amika, what are some tips and best practices that you can recommend for advertisers in this space, whether we’re looking at things like audience strategy, creative optimizations?
Amika (00:20:08)
What have you, when it comes to audience strategies, especially in the realm of cannabis, and you know, being that is such a competitive vertical? I think, you know, we have to have an informed them to build a really strong awareness strategy, right? Get the consumer to connect with the brand, build brand recognition and affinity. That way, word of mouth, of course, I’m guilty. And yeah, and really just build that upper funnel very well, further down the funnel, you know, getting into consideration, you know, getting people to understand different product types, what’s available out there, what can help. And then, of course, you know, we want to convert, get them to the store, capture them, attract them to make an online sale to get into the store, build foot traffic, and what have you there to really kind of tie in the full funnel strategy when it comes to this vertical.
Peter (00:21:03)
Yeah, I mean, I like all of those tactical kind of recommendations. I mean, really, the way I think about cannabis, now I’m trying to be much, you know, like, there are limitations in cannabis. But, you know, generally, it’s a CPG product, and you need to kind of think about it in a CPG way, you need to build something that consumers, you know, love and speak their language, find them in the places where they, where they exist. And, you know, of course, there’s kind of platform restrictions, and all of that kind of stuff and things we need to think about from a regulatory standpoint, but I think people get a little bit carried away sometimes with you know, the hacks rather than just building quality, you know, I can think of a few examples off the top of my head of quality brands that you know, have been building for like three years and now they’re reaping returns because they’ve stuck with specific they’ve identified a consumer they’re built something that they love and they’ve kind of built out content around that consistently. Like there’s a retail chain in BC called Burb, amazing branding, amazing partnerships, amazing collaborations, all with the consumer in mind, that’s, you know, somewhat lifestyle artsy music in Toronto. Superette, I think, stands out from a retail standpoint, incredible visuals, they know who their consumer is, they speak their language, you know, they kind of talking on Twitter, in memes. I mean, it’s, it’s, it’s just quality is quality marketing, you know, quality, visuals, quality content, working out how the consumer is, and you know, building that relationship over a long period of time. And then you kind of you take that thinking, and you then deploy it through the channels and the kind of tactics that, that you that you’re able to which, you know, America did a good job speaking about that kind of, you know, cannabis is no longer just cannabis, it’s not like just weed, it’s genuinely a lifestyle product, you know, that, you know, in the same way that any other lifestyle product, people want to showcase their personal identities through it. And so that consumer-orientated approach demands kind of a bit more of a sophisticated communications and marketing strategy and plan. You know, so find those demographics, build that long-term loyalty, build out the brand, growth, all of that kind of stuff is really, you know, we’ll see influence we’re seeing influencers more and more come online in cannabis. Now. I mean, that was somewhat impossible. And people didn’t really do that before in the influencer world, but now you can, you can partner with influencers, you can do brand new collaborations. So we’re seeing all of these kinds of opportunities, open up in a more in a more meaningful way. So, you know, a lot more kind of, of the, I don’t want to just word traditional, but a lot more of those tactics are kind of coming online. To your point before, it’s, you know, a lot less in the shadows a lot more mainstream. And so that comes with it, this kind of, you know, this consumer orientated approach that works in every other category.
Amika (00:24:14)
And to touch on that point, Peter, I love that you kind of lightly touched on creatives because we have to call out, you know, what is acceptable and what is not acceptable and we’ve observed in the last couple of years in the space, right, so what I find is that it’s such a complicated behind the scenes cannabis is so complicated, you know, just the regulations, the sanctions, etc. But the creatives are just so simple, you know, for that matter, because that’s what regulation deems, you know, to create an environment when we are promoting cannabis are digitally that it is a very simple imagery and copy, you know, delivery available same day, you know, we’re not, you know, a record store, stuff like that very simple and stuff to avoid, you know, attempting to influence adults are not consumers to try it, having the product in there having people in the imagery, all of these things, you know, are deemed as unacceptable in the realm of creatives when it comes to, you know, the cannabis.
Peter (00:25:23)
They are, I would say, though, as well, you know, they are, but they like there’s a gray zone there. And it’s sometimes it’s kind of Who Dares Wins. And obviously, I’m not encouraging people to kind of break any rules. But, you know, there’s some people on Instagram that have a man, you know, obviously not going to call anybody out, but there’s some amazing Instagram handles that definitely have lifestyle pictures, even though you’re not meant to, and they’re verified, so they kind of get away with it. But some of the profiles that get blacklisted for for, you know, seemingly no reason. So there’s, there’s still this kind of weird shifting territory, with cannabis where rules, like certainly on the platform side, you know, aren’t very evenly applied, and some people can take risks and get away with it, some people don’t. So there’s a kind of like, you know, risk appetite assessment that every brand wants to take, and some people will want to be completely by the books, and some people will have a bit of flexibility there. I remember one campaign we did a year and a half ago, where we, you know, obviously we can’t ship we, you know, we were not allowed to do kind of lifestyle, people. So, but we want to kind of look to hint at it. And so we we did a campaign with a brand that was talking about people’s experiences with cannabis, and we kind of blurred them out we pixelated the person and made them these big kind of pixels instead of a person. But you had the audio coming through kind of also talking about this weird stigma, kind of highlighting that stigma but, you know, getting it through in a clever, but within the regulations way. So stuff like that. There’s a bunch of there’s a bunch of people out there kind of thinking in interesting ways to push push the creative envelope without kind of breaking any rules.
Matt (00:27:13)
Yeah, thanks. Thanks so much. I think that Amika, you brought up this point that, especially on the creative side, there are a lot of things for these advertisers to navigate. And I was actually speaking with somebody else within the industry. But last week, they were talking about this notion of driving the first click and piquing curiosity for your consumers. And I think a lot of cannabis advertising, it’s truly about that is just piquing the interest and having something that it’s so subtle, and yet it could, you know, it’s going to drive them to that landing page, and it’s going to get them interested in that product, because they want to know what it’s about. Because the language, you have to be so careful with it, you have to be so careful with the imagery, you put in those ads, that it will, you know, inevitably drive people and drive awareness for your brand.
Matt (00:28:06)
So I think, you know, based on where we’re at in the episode, I am interested to know, as we close this out, you don’t how as the industry continues to grow in the coming years, I mean, we’re still at the very early stages of this booming industry. What do each of you think the future looks like for advertisers navigating in this space? And are there any key takeaways that you can offer to our listeners and things that they should be paying attention to, as we head into 2022 and subsequent years as this industry grows?
Peter (00:28:41)
I mean, I kind of alluded to it before, I think we’ll see less and less kinds of restrictions, and more and more acceptance. Now. You know, in the meantime, you have to think very kind of, you know, within this tactical kind of box, but, you know, we’ll see more and more states come online, eventually, we’re going to see complete federal legalization in the US and that that’ll be the signal to, you know, every platform, Facebook, Instagram, whatever, you know, allowing these types of ads. And so, you know, over time, I just think we’ll see more and more liberalization and more and more options, and this treated like it should be treated, which is like any other consumer, recreational slash medical wellness product. You know, we’re now seeing sports stars talk more openly about it. I mean, the one we’re working on with Marshawn Lynch that, you know, is one of the first athletes to openly talk about cannabis and launch a brand and so we’ll see more and more of this type of stuff. You know, come online, more and more acceptance and more and more, more and more options.
Amika (00:29:44)
Yeah, Peter basically took the words right out of my mouth. I couldn’t agree more. I think that, you know, we’re gonna get a little bit more lacks as an industry. It’s booming. I think the recognition that people read Can I didn’t see that. But from a technical standpoint, it’d be really interesting to see, you know, some of the brands and marketers and agencies alike leaning more into their CRM list. Because a lot of these sites are deemed for people to sign up, log in, what have you. So leaning into that a little bit more and doing audience look alike expansion for that, for that type of tactic. So this is how I see it going in the future from a technical standpoint, but totally agree with everything Peter said, he nailed it.
Matt (00:30:32)
That pretty much puts us at time for our episode. So I wanted to thank both Peter and Amika for your inputs over the last 30 minutes and 20 marketers who are working in this space or looking to test out on this highly regulated vertical. I hope that you also learned a lot today and will take this strategy into your future campaigns. So until then, thanks for listening.
Outro (00:30:56)
Thank you so much for tuning in. This has been the How Agencies Thrive podcast. If you like what you heard, then there’s three things that you can do to support the show. Number one, subscribe. Number two, leave us a review. And number three, share our podcast on social media or with anyone who might find value in this content. If you have questions or feedback, we’d love to learn how agencies or brands work with StackAdapt, find us at www.stackadapt.com. Thanks for listening, and I’ll see you next time.
