Publishers, Ads, and Cannabis: Some Basics

We had a publishers-only call a number of weeks back to talk about cannabis and advertising. Our thanks go out to those who joined and contributed. We wanted to share the findings that came out of the call for others who might be interested. 

First off, do you have a cannabis site or are you interested in running cannabis advertising? There may seem to be an obvious distinction, but it wasn’t clear to me walking into the call.

If you have a cannabis site…

• Many people want to target a cannabis audience, so you may have an opportunity to leverage your audience and make revenue offsite. Fyllo and Rebel & Thorn are being used.
• You need to have a way to target by age group, there were a couple of ways discussed:
  • Have an age-gate that asks the user for their age as they access the site. 
  • Utilize third-party data for age data.
• Fill
  • Programmatic fill did not typically appear to be an issue.
  • One very popular cannabis site said they have not seen non-cannabis campaigns perform well to date, but contextual advertising did very well.
  • No one on the call had done an analysis of cannabis vs non-cannabis CPMs. 
  • Some notes about demand, this is not meant as an all-inclusive list, but just a place to start.
    • There is one ad tech partner that was called out as providing programmatic cannabis advertising at scale, Mantis, offering both an SSP and Audience Extension; but it sounds like they may have minimums.
    • Index Exchange provides demand in Canada.
    • AdX is cannabis tolerant; just make sure you declare properly in setup.
    • ShareThrough is cannabis tolerant.
    • Centro is worth a look.
    • No issues using GAM for ad serving.

If you want to run cannabis advertising…

• Legal
  • Laws are tailored by state. 
  • From a legislative perspective, there is a big distinction between THC-infused or non-THC-infused products. 
  • To further complicate things, there are also legal differences in the interpretation of non-THC products. For example, some novel cannabinoids which are considered low or legal THC even in some non-legal states, such as Delta-8, are banned in some other states. Delta-8 is not allowed in NY, NV, and MN for example, even though other states allow it. 
• Targeting
  • Geo
    • Non-THC infused products can run nationally. 
    • Low-THC or novel cannbinoids vary wildly by state and advertising laws.
    • The state laws for THC-infused products change all the time, so you have to have a way to monitor what is currently allowed and in what states. For example, Massachusetts currently requires a disclaimer, and there are a few others that do not allow cannabis advertising at all. For those sites on ourcall, running national campaigns meant setting up a national campaign with state exclusions.
    • Otherwise, local campaigns are typically ZIP code-targeted.
    • If you have Canadian traffic you can target there, but the rules vary by provinces, so keep in mind the same considerations as targeting in the US. Specifically, Quebec does not allow any cannabis advertising today.
  • Age - You should ensure you are targeting cannabis ads to those 21 years or older.
    • You can use your own site-collected age data; or
    • Purchase third-party data.
• Billing
  • For smaller advertisers, it is recommended to bill upfront. Larger advertisers typically are not an issue to bill in arrears.
  • While cannabis sales may be a cash business, cannabis advertising is not. It is sold the same as other vertical types. 
• Advertisers
  • There are big brands that own a lot of the local dispensaries, so you can sell to and work with them for advertising for both THC-infused and non-infused.
  • Note for those independent dispensaries, having sales call on them and leveraging a self-serve platform had been successful for one site.
  • Larger advertisers tend to have sophisticated ads and various sales goals while smaller advertisers i.e., local dispensaries, and small CBD brands, don’t tend to have a creative department and only care about moving product. Sales attribution is the most important, and sometimes only metric, that they care about.  Also, sales attribution is very difficult in a primarily cash business.
• Platform
  • Apple - iOS is very sensitive about cannabis and will often deny updates to apps if they are not happy what appears to be an unrelated issue.  

You should know about…

• The Cannabis Media Council.

Written by: Melissa S Chapman

Contributions by: Melissa LaCaille

1/11/2023 - published

11/16/2022 - Pubs-Only call