Recreational Marijuana could soon be legal in New Jersey. This news has all millennials in the state pumping their fists like Pauly D from the Jersey Shore. Entrepreneurs, however, have already begun applying for licenses so they can be one of the first to open a New Jersey dispensary.
The possibility of legal marijuana in New Jersey has investors, and most college students very excited (for different reasons). And rightfully so; a report done by New Jersey Policy Perspective projects the recreational market could be worth over $1 Billion dollars in its first year alone.
Does that surprise you? I mean, if you’ve spent anytime at all in New Jersey, one thing is very clear: The people here are eccentric (read: crazy) and we’re all just trying to have a good time.
In all seriousness, if you’re considering opening a New Jersey dispensary, you are probably wondering how to develop a marketing strategy that effectively promotes your business while complying with the numerous regulations in the industry.
Advertising regulations on cannabis vary by state, and there is a lot of ambiguity due to the unprecedented nature of the industry and the fact that marijuana remains a Schedule I drug at the federal level. Here’s everything our advertising agency think you should know.
Potential Advertising Restrictions on a Recreational New Jersey Dispensary
First things first. Let’s talk about the current situation on the ground. On the recreational front, things are very much up in the air. New Jersey lawmakers are currently debating three separate marijuana legalization bills that all differ slightly.
Here’s a quick overview of all three and the advertising regulations that would affect a New Jersey dispensary. Keep in mind that while there are a lot of restrictions, there is still a lot of opportunity for a knowledgeable business person to navigate around them and effectively promote their dispensary. We’ll cover that at the end of this post.
This bill would legalize marijuana use for New Jersey residents over the age of 21. They would be allowed to possess up to one ounce of cannabis, 16 ounces of solid marijuana products (edibles) and 72 ounces of marijuana in liquid form.
On the dispensary front, the bill would establish a Division of Marijuana within the state government to oversee the legal industry. The bill would establish a licensing model for retailers, wholesalers, producers, processors and transporters of marijuana.
All 21 counties in New Jersey would be mandated to have a dispensary, with no limit to how many could open throughout the state. Business owners applying for a New Jersey Dispensary license would be subject to a strict application process, residency requirements, and a criminal background check.
The advertising regulations outlined in the bill are as follows:
Restrictions on the advertising and display of marijuana items and marijuana paraphernalia, including, but not limited to, requirements that:
(a) Restrict advertising of marijuana items and marijuana paraphernalia in ways that target or are designed to appeal to individuals under the legal age to purchase marijuana items, including, but not limited to depictions of a person under 21 years of age consuming marijuana, or, includes objects, such as toys, characters, or cartoon characters suggesting the presence of a person under 21 years of age, or any other depiction designed in any manner to be especially appealing to a person under 21 years of age;
(b) Marijuana retailers shall not display any signage in a window, on a door, or on the outside of the premises of a marijuana retailer that is visible to the general public from a public right-of-way, other than a single sign no larger than one thousand six hundred square inches identifying the retail outlet by the licensee’s business trade name;
(c) No licensed marijuana establishment shall advertise any marijuana items or marijuana paraphernalia on television, radio or internet between the hours of 6:00 am and 10:00 pm.
(d) No licensed marijuana establishment shall engage in advertising unless it has reliable evidence that no more than 20 percent of the audience for the advertisement is reasonably expected to be under the legal age to purchase marijuana items.
(e) No licensed marijuana establishment may engage in advertising or marketing directed towards location-based devices, including but not limited to cellular phones, unless the marketing is a mobile device application installed on the device by the owner of the device who is 21 years of age or older and includes a permanent and easy opt-out feature;
(f) No licensed marijuana establishment may sponsor a charitable, sports, musical, artistic, cultural, social, or other similar event or engage in advertising at or in connection with such an event unless it has reliable evidence that no more than 20 percent of the audience at the event is reasonably expected to be under the legal age to purchase marijuana items;
(g) All advertisements must contain warnings, including but not limited to one or more of the following:
(i) “This product contains marijuana;”
(ii) “Marijuana can impair concentration, coordination, and judgment. Do not operate a vehicle or machinery under the influence of this drug;”
(iii) “There may be health risks associated with the consumption of this product;”
(iv) “For use only by adults 21 years of age and older. Keep out of the reach of children.”
(v) “This product was produced without regulatory oversight for health, safety or efficacy.”
(vi) “The intoxicating effects of this product may be delayed by two or more hours.”
(vii) “There may be health risks associated with the consumption of this product, including for women who are pregnant, breastfeeding, or planning on becoming pregnant.”
(viii) No licensed marijuana establishment shall place or maintain, or cause to be placed or maintained an advertisement of marijuana items or marijuana paraphernalia in any form or through any medium whatsoever within 200 feet of an elementary or secondary school grounds, recreation center or facility, arcade, child care center, public park, playground, public swimming pool or library; on or in a public transit vehicle or public transit shelter; on or in publicly owned or operated property. For the purposes of this section, a noncommercial message shall not be considered an advertisement. This section also shall not apply to advertisements within the premises of a marijuana retailer.
This bill is very similar to Assembly Bill 830. In fact, the advertising regulations are identical. However, the taxes placed on cannabis would be lower and New Jersey residents would be able to grow their own marijuana at home. Win-Win, right?
This bill would also set a limit to the number of dispensaries able to be opened in New Jersey. Only one dispensary would be able to operate in each of the 40 legislative districts during the first two years. That number would grow to three per district in the third year of the program.
This differs significantly from the previous two bills, as it would not allow for a legal cannabis market. Instead, it would legalize small amounts of possession and expunge criminal records for marijuana previous marijuana possession.
Basically, the bill would place New Jersey in a weird state of marijuana purgatory. It wouldn’t be illegal anymore, but unless you know someone, it would be very hard to get.
Overview of Current Regulations for a Medical New Jersey Dispensary
Recreational marijuana is not legal in New Jersey at the moment, but the state has a medical marijuana program that was recently expanded. Short of a terminal illness, there were historically very few conditions for which you could partake of the wacky weed.
Here are the advertising regulations currently in place on medical dispensaries in New Jersey:
(a) Alternative treatment centers shall restrict signage to black text on a white background on external signage, labeling and brochures for the alternative treatment center.
(b) Alternative treatment center signage shall not be illuminated at any time.
(c) Alternative treatment centers shall not display on the exterior of the facility advertisements for medicinal marijuana or a brand name except for purposes of identifying the building by the permitted name.
- d) Alternative treatment centers shall not advertise the price of marijuana, except that:
- An ATC can provide a catalog or a printed list of the prices and strains of medicinal marijuana available at the alternative treatment center to registered qualifying patients and primary caregivers.
(e) Marijuana and paraphernalia shall not be displayed or clearly visible to a person from the exterior of an alternative treatment center.
(f) Alternative treatment centers shall not produce any items for sale or promotional gifts, such as T-shirts or novelty items, bearing a symbol or references to marijuana. This prohibition shall not pertain to paraphernalia sold to registered qualifying patients or their primary caregivers.
Consult the final rules on medical marijuana in NJ for more information.
Federal Restrictions on New Jersey Dispensary Advertising
Even though a flurry of states have legalized marijuana – producing many positive results – it still remains illegal at the federal level. That’s a shame. If only the political leaders in Washington could pass a joint – across the aisle – maybe we’d finally find common ground in politics.
Anyways, this has created immense uncertainty in the industry, forcing cannabis entrepreneurs to deal with both state and federal regulations that often directly contradict one another.
Below are the relevant marketing channels affected by federal regulations:
- Television: While not expressly illegal to advertise on television, the FCC can still levy fines on broadcasters for airing the ad. David Oxenford, a lawyer specializing in FCC regulatory laws says that “Because it’s still a Schedule 1 drug, a broadcaster holding an FCC license running an ad for illegal substance presents potential for risk.” Because of this, it is unlikely to see cannabis ads on TV anytime soon because the risk far outweighs the reward for broadcasters.
- Print: The US Post Office has come out and said that it is a felony to distribute marijuana – even in states where it is legal. Post Office workers will not deliver any cannabis related marketing material. You would think a federal agency that lost $2.7 billion dollars in 2017 would want all the business it could get, but apparently not.
- Radio: While it is legal in a few of the states that have legalized cannabis, it’s still illegal at the federal level. Even in the states where it is legal, it is still subject to a bevy of restrictions and radio advertisers are unlikely to accept your ad due to the liability involved.
Also, due to federal law, you won’t be able to write off any marijuana advertisement expenses come tax season. Because in the eyes of the federal government, you’re technically a felon.
Overall, many industry insiders predict that eventually, marijuana advertising will follow very similar guidelines to the ones the alcohol industry has voluntarily subjected themselves to. Those regulations include not promoting illegal/irresponsible behavior and only advertising in spaces where it is reasonably assured that 71.6% of users are legally able to consume cannabis.
There are also restrictions placed on digital advertising. The major online advertising platforms have self-regulated and taken the following stances on marijuana advertisements:
- Facebook: Facebook does not allow any advertising of cannabis-based products on their platform. It’s ad policy states that “Ads must not constitute, facilitate, or promote illegal products, services or activities.” Further, ads cannot promote the sale/use of any drugs (illegal, prescription, and recreational) and any images of drug paraphernalia are prohibited. The same rules apply to Instagram, also owned by Facebook.
- Twitter: Twitter also prohibits the promotion of drugs and related paraphernalia. However, this policy does not apply to content such as news and information about drugs.
- Google: Google does not allow any marijuana or drug-related ads on it’s Adwords platform. Their policy states that the “promotion of substances that alter mental state for the purpose of recreation” and “products or services marketed as facilitating recreational drug use” are not allowed.
- Email: Using digital marketing channels to promote cannabis is still illegal but very hard to shut down due to the decentralized nature of the internet. Still, email marketing for your dispensary will be challenging because many email marketing platforms do not allow it. For example, the state of Rhode Island has gone as far as making email advertisements of cannabis illegal.
On top of these restrictions, many dispensaries that have leveraged social media in some way have found their business pages shut down without warning. Overall, even though the cannabis industry is growing at an incredible rate, it is unlikely these companies change their policies until it is legal at the federal level.
Okay, So What Can You Do?
Alright, so marketing your dispensary is going to be tricky. But this whole industry is tricky and that hasn’t stopped you from thinking about entering it. The truth is, if you’re willing to think differently, there are still plenty of opportunities to market your dispensary.
Blogging is a key component of content marketing and is essential if you want to establish yourself as a leader in your industry. It also allows you to provide helpful content to your target demographic. People are more likely to do business with you if they see you being helpful and providing value instead of trying to constantly sell them something.
Plus, blogging is one of the few marketing channels that isn’t restricted by the government – so go puff, puff, pass that information over to your potential customers. Now, put yourself in the shoes of your consumer.
Some of your customers may have little to no experience with marijuana due to its prior criminalization and stigma. This right here is your opportunity to provide value. Think about all the questions they likely have right now:
- What are the differences between hybrid, Sativa and Indica strains?
- THC vs CBD: Which one is right for you?
- Cannabis-inspired gift ideas for your friends
- How is marijuana used to treat anxiety?
- What are the potential side effects of marijuana use?
And so on and so forth. There are so many different topics you could write a blog on regarding legal marijuana, and there is a huge audience ready to read it.
Want some stats on video that will blow your mind? Here you go:
All of this is to say that video content is extremely popular with consumers, and savvy marketers like Gary Vaynerchuk have used it to effectively promote their personal brand and business.
So, how does this all relate to your dispensary? Well, the legal cannabis industry is one of the most fascinating new industries out there. Even people who have never smoked marijuana are curious to know what it’s like behind the scenes.
Let’s be real, people are looking to see if the legal cannabis industry is a professional operation or just a ragtag group of stoned teenagers. And guess what? Vlogging is your chance to show them!
Hire an independent camera crew or simply document your whole day with your phone showing people what a typical day looks like as the CEO of a New Jersey dispensary.
Take viewers behind the scenes and show them how you manage your dispensary, how you provide value to customers, and how you grow the product. We’re talking about a vlog on marijuana after all, so it’s okay to have fun with it and have it be entertaining.
When a vlog is executed correctly, people feel a personal connection with you and your brand before they even meet you. Once this personal connection is established, they’re not even going to think about visiting another dispensary.
Event marketing is a terrific way to increase your standing within the industry and to raise your brand’s awareness amongst consumers. Events will allow you to establish yourself as a thought leader within the local cannabis industry, increasing your authority and your network which will allow you to attract more customers, investors and business partners.
Here’s an idea: rent out a back room of a popular restaurant in town and invite potential investors, established industry insiders, vendors, budtenders, growers, cannabis cooks (yes that’s a thing) and if you have the room, the general public. You can invite them all to a single event or create a networking series out of it, each event focusing on a specific niche within the New Jersey cannabis industry.
At the event, give a brief presentation outlining your background and the current state of the cannabis industry in your area. Give people a genuine behind the scenes look at what it’s like to operate a New Jersey dispensary. After that, invite the rest of your speakers up so they can educate the audience about their niche.
Home cultivation is going to be a big thing, even though it is a bit complicated, that’s where the grower comes in so he can show the audience how to do it and answer their questions.
A budtender (an expert in weed strains) is a must at an event like this so they can give people an overview of all the different strains and answer people’s questions so they can figure out what’s best for them.
Vendors and investors are also crucial to an event like this. You will be able to establish a relationship with them so you can secure product and funding more easily and hopefully negotiate deals that benefit all parties involved. In an unknown and nascent industry, those groups are going to want to work with you just as much as you want to work with them.
Lastly, those cannabis cooks. If you have visited a legal state, you know that edibles are really popular. People are going to want to know how the cook edibles from the comfort of their own home.
But it’s not as simple as throwing some bud into a baking mix and calling it a day. In fact, all that would do is make your pastry taste really gross.
You definitely need to know what you’re doing, which is why you bring in the cook to explain to people how it’s done. The more you educate consumers, the more they’ll want to do business with you.
Lastly, make sure to keep the atmosphere relaxed and upbeat. You don’t want it to be super formal. Play music you think your audience would appreciate and make sure everyone is able to get a good amount of food. The presentations are important but also make sure you leave a lot of time for socializing and networking.
This event is a great way to get your brand’s name out there, so we definitely recommend handing out branded items like rolling papers, lighters, frisbees, towels and anything else you think your target market would appreciate.
Marketing in 2018 is all about establishing yourself as a thought leader. Events like this are one of the best ways to do this. Content on the internet is a great start and we would argue essential, but nothing will ever top face to face interactions.
Future Outlook on Legal Marijuana in New Jersey
Overall, with the election of Phil Murphy as Governor of New Jersey legal marijuana seems to be a matter of “when” not “if”. Murphy aggressively campaigned on the issue last fall and will need the tax revenue NJ dispensaries would yield to support his other initiatives.
However, the bills discussed previously have hit a roadblock in Trenton. There is reason to believe there could be major developments in June when the state budget must be finalized. Either way, we will likely have to wait until sometime in 2019 at the earliest for the legal marketplace to open up.