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Committee Blog: Do’s and Don’ts of Cannabis Influencer Marketing on Social Media

By NCIA’s Marketing and Advertising Committee,
Helen Mac Murray, Mac Murray & Shuster LLP, and Dan Serard, Cannabis Creative Group

The requirements and restrictions surrounding paid advertising on social media are hardly a secret. Cannabis businesses have to tread carefully to avoid getting shut down or banned completely from online platforms.

However, there is one popular way to leverage the power of social media without risking your account: Influencer Marketing

An influencer is any public figure, celebrity, creator, or individual that has the power to affect the purchasing decisions of others because of their authority, knowledge, position, or relationship with the audience. Influencers are typically content creators that actively engage in a select niche online, such as Lifestyle, Fashion, and even Cannabis.

Influencer marketing is a fantastic way for cannabis brands and dispensaries to leverage the power of social media without getting tangled up in the mess of rules and regulations. However, that doesn’t mean there are no rules and regulations for influencer marketing. 

Here are some do’s and don’ts of cannabis influencer marketing on social media:

DO select your influencer partners carefully.

Marketers and business owners can be quick to forget that influencers are not just marketing tools, but rather, people as well. In that regard, influencers are their own brand. Their entire digital presence is curated carefully to align with their unique values and interests.

This means that when cannabis brands are interested in working with influencers, they have to be extremely careful who they choose. Not only does their character reflect on your brand, but also because it’s going to cost you a pretty penny.

Therefore, focus on building meaningful relationships with influencers and popular creators. Add value to their community and don’t view them as a tool in the toolkit. When you manage these relationships the right way, you turn one-time influencers into long-time brand ambassadors.

If you are partnering with someone who will be making claims about your brand or promoting your product in any way, be sure to:

  • Examine their credentials
  • Make sure they actually use and love your product
  • Evaluate whether their values align with your brand’s values
  • Check that their engaged audience is your target audience

One of the biggest benefits of influencer marketing across industries is that it is a relatable way to sell products. If your influencer partners or brand ambassadors do not actually use and love your product, the partnership will lose its value. Both your brand and the influencer will lose credibility.

When selecting influencers to partner with on campaigns, take time to do your research. Observe their regular social media activity as a follower, be patient during the agreement phase, and understand that this is a long-term partnership. 

DON’T run or re-run any paid influencer ads without consent.

After the Borat debacle in Massachusetts, cannabis brands have (rightfully) become paranoid about using influencers or celebrities in their marketing campaigns. 

While memes on social media are perfectly fair game, a disclaimer or two never hurt anybody if you want to cover your tracks. However, paid ads are a completely different ball game.

For those who are wondering what you can and can’t do when it comes to using a celebrity or cannabis influencer’s image or likeness, here’s a general rule to keep in mind: Do not run or re-run any paid advertising with a public figure without express legal consent. 

When it comes to influencers, this means you need to be very specific on the terms of your engagement. For instance, if you are simply looking for a one-time product endorsement on their own channels, you can share these assets from their account to yours. However, you are not allowed to take those assets and use them in future campaigns, especially paid ones, unless you have explicit permission from the influencer. 

In other words, if you want to be able to run any cannabis advertising campaigns with partner content, be sure to let the influencer know during the agreement phase, and prepare your budget accordingly.

DO make sure your influencer partners disclose your relationship with their audience.

Disclaimers are extremely important on social media and other marketing platforms when working with influencers. They provide your audience with transparency and protect all parties from any legal backlash. 

If you have any relationship with a cannabis influencer of any kind (celebrities, bloggers, etc.), make sure they disclose that to their own audience when engaging in formal partner campaigns with your brand. 

These disclosures should be clear and unambiguous and made directly within the endorsement content. Some ways they can do this are by:

  • Using a descriptor in the caption or image, like #ad
  • Disclosing any paid travel, stay, or product exchanges
  • Add disclaimers in both the text and the media

Disclosing material connections with a brand is an important requirement for influencers, but brands are also liable for influencer posts that violate the law. You never want your cannabis brand to be associated with anyone that might find themselves in hot water, so be sure to make these terms clear when partnering with influencers.

DON’T run ads without proving your product claims.   

This may go without saying, but when it comes to paid advertising in cannabis, throwing spaghetti at the wall and seeing what sticks isn’t really a good idea. When you’re running ads – whether it is on a traditional medium, like a billboard, or a digital medium, such as pay-per-click ads – it is important to do your due diligence.

Don’t wait to prove your product claims until after the ads have run. Not only will this get you in trouble with the FTC, but you will appear deceitful to your customers and quickly lose their trust. 

Instead, ensure you have third-party lab testing, credible experts (like cannabis doctors or budtenders) able to speak to your specific product, and/or the receipts to back up your claims if challenged. 

DO be cautious when using consumer testimonials about your product.

Existing customers are the best marketers for your brand. Using reviews to show social proof of your product is a great idea. In fact, any cannabis marketing professional will tell you that it is encouraged to show off testimonials on social media, websites, email lists, and more.

However, do be cautious when using these testimonials to sell your product.

Only use the words of your customers if you have express permission to use them on other channels, or if they are already posted in public forums, such as Google Reviews. 

It is also highly recommended that you only use testimonials if they reflect the results of most of your customers. You can’t use consumer testimonials if you do not have substantiation that the endorser’s experience is representative of what consumers will generally achieve unless the advertisement clearly and conspicuously discloses the generally expected performance in the depicted circumstances, and the advertiser must possess and rely on adequate substantiation for that representation.

While it’s always helpful to highlight benefits that real people have experienced, disclaimers should always be made if anything sounds too close to a health claim. For instance, if a customer comments on an Instagram post that your product has made their anxiety disappear, you’ll want to gain express permission from them to use their words as a testimonial, and you should add a note when posting that such claims one customer’s unique experience and can’t be interpreted as medical advice. 

DON’T bring on a marketing company only for damage control.

Cannabis marketing agencies are a powerful tool for a brand or dispensary. From social media and email marketing to search engine optimization, branding, website design and development, and more, these companies are experts at crafting a digital presence for your business.

However, good marketing only goes so far. Even the best cannabis marketing professional or influencer can’t cover up for false information, a bad product, poor customer service, or just bad business overall. 

Additionally, even when marketing companies have industry-specific expertise, they are not lawyers. As a brand, ​​you can’t rely on your agency to know the exact letter of the law. 

Instead of using social media or your marketing efforts as damage control, be intentional about building a high-value brand and bringing on a marketing agency that can make you stand out from the crowd in good conscience. 

That means, start from the ground up, provide accurate information, and protect yourself and your brand from any liability by being cautious of any cannabis advertising and marketing rules and regulations.

Using cannabis influencers for your social media marketing campaigns

Developing a strong presence on social media isn’t just impressive, it’s important for your audience and potential customers to buy into your brand. Whether it’s paid or organic, influencer marketing is a great workaround to some of the more harsh realities of social media rules and regulations for cannabis brands and dispensaries. 

When you harness the power of these public figures and their engaged communities online, you can take your brand to new heights.

Member Blog: The Hidden Gem of Licensing and Endorsement Deals in Cannabis 

By Dan Shapiro, Greenlane Holdings

Sitting here on July 14, 2021, the Senate Majority Leader of the United States Chuck Schumer just introduced legislation to (among other things) federally legalize cannabis. Yet, despite the Senate’s official entrance into the path to legalization, many states, businesses, and importantly here, athletes and celebrities, or “talent,” continue to behave as if legalization has already occurred. Side note – it has in many states!

Talent throughout the country have engaged in a variety of licensing and endorsement deals within the cannabis industry, ranging from Martha Stewart, Keith Haring, Bob Marley, Seth Rogan, Berner, Travis Scott, Rick Ross, “Sugar” Sean O’Malley, Jonathan Adler, to Gary Payton. A common theme among talent newly entering the space seems to be a default to the plant itself, i.e., partnering with cannabis producers to either endorse or license intellectual property (“IP”) to create cannabis strains and products. Here, I would like to first describe what licensing and endorsement deals are and then discuss a hidden gem of the cannabis licensing and endorsement space. That is, talent partnering with cannabis ancillary businesses, meaning, businesses that sell cannabis accessories and products but do NOT ‘touch the plant.’

Before I dive into a discussion of cannabis accessories, it is important to quickly outline “licensing and endorsement deals.” At a high level, a licensing deal is the process of an individual granting another party the right to use his or her name, image, and likeness, for a particular purpose, in exchange for certain consideration (payment). For example, publicly-traded cannabis accessory distributor Greenlane (NASDAQ: GNLN), where I serve as the Associate General Counsel, has remitted consideration to the owner of the artist Keith Haring’s IP, to use images of his artwork on a line of smoking accessories. A licensing deal allows an owner of IP to capitalize on its value by finding the right partner who can harness the IP in a way to create a profitable outcome. It allows an IP owner to find a partner with the production and distribution capacity and operational know-how that an IP owner likely does not possess. In a licensing deal, the end consumer is often under the impression that the end product is coming directly from the IP owner, which can add huge value to the talent’s brand; whether the talent is alive or deceased. This perception for the end consumer can be different with endorsement deals where there is usually a clear delineation between the talent and brand.

An endorsement deal is where talent is used to create awareness for a particular product or service; this can be seen in commercials, Instagram or Twitter posts, and public appearances. Unlike a pure licensing deal, an endorsement deal will commonly make it clear that the product being endorsed is not coming from the talent directly, but that he or she is merely promoting the underlying product in exchange for consideration. Nevertheless, despite the distinction,  licensing deals and endorsement deals often merge into one and the same. For instance, Greenlane’s cannabis accessory house brand and retail arm Higher Standards did a licensing and endorsement deal with UFC MMA fighter “Sugar” Sean O’Malley. In this deal, Higher Standards secured a license to use Sugar Sean’s IP to create a limited-edition water pipe and promote this water pipe using his IP on all of its promotional mediums. As part of the deal, Greenlane also caused Sugar Sean to promote the Higher Standards brand on his social media platforms through a select number of posts and mentions. This is a prime example where talent and brands will often dip their toes into a deal that incorporates both a licensing and endorsement component.

So, now that I have established what a licensing and endorsement deal looks like, I want to shift to a discussion of the benefits of working with cannabis accessories. For clarity, cannabis accessories can include rolling trays, roach clips, rolling papers, vaporizers, water pipes, jars,  grinders, lighters, packaging, and in certain cases, clothing. So, why should talent focus on licensing and endorsement deals with cannabis accessories?

Cannabis accessories can allow for a unique form of creative control for talent. Talent can create a product from scratch, like an ashtray, jar, or water pipe, and have a direct impact on the structural design. Additionally, accessories can be sold in a plethora of different locations. Unlike cannabis products, accessories can be found in department stores, headshops, smoke shops, convenience stores, clothing stores, and upscale interior design boutiques. In addition to the broad array of available doors, accessories can also allow certain talent to enter the cannabis space in a way that more closely aligns with their primary non-cannabis-focused brand. A great example of this is Greenlane’s licensing deal with iconic designer Jonathan Adler. It would be impossible for Jonathan Adler to partner with a plant-touching product and still be able to sell those products in his stores throughout the world. By partnering with Greenlane, Jonathan Adler is able to enter the cannabis space while maintaining his traditional brand and his ability to sell these products in his interior design boutiques.

An additional appeal of the cannabis accessory space is timing, flexibility, and speed. While talent could quickly endorse an already developed and cultivated cannabis strain or other plant-touching product, the process could be timely. In contrast, to go back to the Sugar Sean example, Greenlane and Sugar Sean were able to move swiftly and nimbly to promote a line of water pipes for a launch in direct correlation to an upcoming fight. The deal moved quickly and highlighted the maneuverability and flexibility of working with accessories. Often, a template or mold for a product is already developed, with the talent’s unique branding and direction the last piece of the puzzle. For plant-touching products, talent may want to be a part of the cultivation process; focused on taste and effect on consumers. This process will usually take a bit more time and can present far more variables and regulatory concerns and limitations.

Ultimately, there are fascinating and innovative deals to be made for both plant-touching and non-plant-touching products, but moving forward, I believe the hidden gem of cannabis endorsement and licensing deals is with the non-plant-touching cannabis accessories.


Dan Shapiro is the Associate General Counsel at Greenlane Holdings, Inc. (NASDAQ: GNLN), one of the largest global sellers of premium cannabis accessories and CBD products. Prior to joining Greenlane, Dan worked at CAA in the Sports Business & Legal Affairs division. Dan is the Founder and Inaugural Chair of the Cannabis Division of the American Bar Association Forum on Entertainment and Sports Industries and a member of the National Cannabis Industry Association’s States Regulations Committee. Dan is a member of the New York Bar and Authorized House Counsel in Florida, and holds a JD from Cardozo Law School where he served as the President of the Cardozo Sports Law Society, and a BA from The George Washington University.

 

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