Top Cannabis Content Compliance Risks and How to Avoid Them

It’s true that the cannabis industry is a patchwork of different state regulations that can vary from medical-only to adult use, with wildly variable legislative language. But the essential components of most states’ cannabis marketing regulations are quite similar, like not promising miracle cures or appealing to minors.

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Many cannabis compliance rules in emerging markets are patterned on those of states that legalized first, or on compliance metrics for other highly regulated industries like gambling or alcohol. Still other regulations are based on those of federal regulatory bodies like the FCC, FDA or USDA that don’t directly apply to cannabis—yet—but do control broadcast, banking and consumer safety channels that affect businesses in almost every sector. 

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Although some states have unique quirks (like Michigan’s insistence on calling cannabis “marihuana” in all of its legislation), the commonalities between different regulatory environments mean cannabis companies are often making the same mistakes. Here are six of the top cannabis content compliance mistakes, and how to avoid them.

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Top Cannabis Content Compliance Risks

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1. Giveaways. Giving away free product is one of the oldest marketing tools in the book. But there’s a big difference between a brand sharing samples of its latest meal kit at the grocery and offering BOGOs on flower at the dispensary. Giveaways are one of the biggest sources of risk exposure for cannabis brands. While the practice is legal in some states, others explicitly forbid giveaways as part of a cannabis marketing strategy.
   
   

The state of Washington, for example, not only bans giveaways but also “coupons and distribution of branded merchandise.” But even if cannabis giveaways are compliant by state standards, advertising promotions on social media could violate those platforms’ terms of service, and result in other consequences like shadowbanning. 

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2. Calls to Action. A well-crafted call to action can be essential to making owned and earned media truly work for a brand. Statistics show that a personalized call to action can result in up to 202% better conversion rates than more generic CTAs. But tailoring a CTA in the cannabis industry takes a little more care. Worded the wrong way, a call to action can violate marketing regulations that disallow “calls to sale.” 

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Asking people to come to your retail location, for example, can count as a call to a sale. Urging the audience to “visit our website” or “swipe up to read” a blog post can also be construed as call to sale if that website or blog shares digital space with online retail. Instead, brands should point their CTA statements to a separate domain without sales content, or to a landing page hosted within a CRM. 

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3. Promoting over-consumption. It’s a ringing endorsement if your target audience can’t get enough of the good product you produced. But overconsumption can have real consequences—and not just for the over-enthusiastic fan who “ate the whole thing.” While stunts like massive shatter slabs and foot-long dabs make for compelling clickbait, they go directly against advertising regulations designed to keep consumers safe. That’s why the Highlyte algorithm is designed to flag copy or visual imagery featuring gratuitous consumption.
   
   
4. Competitions. Like giveaways, competitions can present compliance risks. Some states fully prohibit the practice—like Alaska, which stipulates in Form MJ-03 that “A retail marijuana store may not use giveaway coupons as promotional materials, or conduct promotional activities such as games or competitions to encourage sale of marijuana or marijuana products.” Even in regulatory environments that haven’t explicitly banned competitions, the way such promotions are structured must be very strategic. 

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For example, asking a brand’s Instagram followers to tag a friend can quickly run afoul of regulations designed to age-gate cannabis content and protect minors. Offering a bong or other paraphernalia as a prize might trigger a red flag from the platform’s algorithm. But asking the audience to vote on different designs for a new sweatshirt or to comment on a post about the band they would most like to see at a music festival with a pair of tickets as a prize would be more likely ruled compliant. 

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5. Appealing to Minors. It bears repeating—appealing to minors is one of the most significant risks to cannabis companies. Just look at what happened to tobacco company Juul after years of giveaways, freebies and utilizing models who appeared to be under 30 in their advertisements. It’s unclear if the iconic brand will survive the millions in settlements it was ordered to pay, but few cannabis companies have a balance sheet to withstand the same. 

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From a compliance perspective, it doesn’t matter if an anime-style drawing on a brand’s merch was designed with adults in mind. Even if a meme of, say, Sesame Street’s Elmo or the Simpsons’ Bart smoking a blunt has been shared far and wide hundreds of times, that doesn’t make it any less problematic from a copyright and compliance perspective. 

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The No. 1 thing cannabis companies can do to protect themselves from marketing missteps is to read the fine print on state regulations. While some states are relatively lax, others like Massachusetts have surprisingly stringent standards that extend even to font choices and neon colors.

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