Do We Really Need to Market Weed?

What's This?

By Fran Berkman2013-10-11 15:17:25 UTC

Businesses ranging from mom-and-pop shops to large corporations are online, but one emerging industry is so new, you won't find its merchants in your Google search results yet — recreational marijuana.

Despite the fact that it's still against federal law, Colorado and Washington have legalized recreational marijuana. Neither state has permitted vendors to sell it yet, but that hasn't stopped Washington-based digital marketing startup THC Media Group from trying to peddle domain names, web development and consulting services to prospective cannabis businesses.

See also: Man Asks for Weed Delivery on Twitter, Gets Fired

"People see it as a business opportunity, and they want to get involved early," Noel Abbott, founder of THC Media Group, told Mashable. "I think to a lot of people, they believe it's worth the risk."

The company, which began its operation in February, offers "gangapreneurs" more than 300 marijuana-themed domain names such as "BudWatcher.com" and "420Biz.com." There are also region-specific names such as "GetPotColorado.com" and "Buy420Washington.com." Though the business is still in "startup mode," Abbott said he recently brokered domain name sale for several thousand dollars.

More than dealing digital real estate, Abbott said his business' main function is providing professional marketing services to customers.

"I believe that the cannabis industry is going to be very chaotic over the next few years," he said. "The companies who have responsible branding and advertising are the ones who will ultimately succeed."

Legalization of recreational marijuana nationally would result in annual savings of $8.7 billion from law enforcement costs and annual tax revenue of $8.7 billion, according to a 2010 report conducted by Jeffrey Miron, a Harvard economics professor. For the first time in more than 40 years polling on the issue, the Pew Research Center found in April that the majority of Americans support legalizing the drug.

The Marijuana Policy Project advocacy group aims to pass laws in 10 other states to "regulate marijuana like alcohol" by 2017. The organization will focus on Hawaii, Maryland, New Hampshire, Rhode Island, Vermont, Alaska, Arizona, California, Maine and Nevada.

However, even in Colorado and Washington where state law allows for it, recreational marijuana business ventures remain risky because selling the drug is against U.S. law. Though, it does seems the government isn't going to be too strict when it comes to enforcement. U.S. Deputy Attorney General James Cole issued a memorandum in August instructing federal prosecutors to, for the most part, let states regulate the sale of marijuana.

Neither of the trailblazing states in this effort have opened up the market recreational cannabis market quite yet. For Colorado, it's expected to happen on Jan. 1, 2014. Washington will begin accepting applications for licenses in November, and vendors could be open for business in May or June of 2014, according to the state's Liquor Control Board Communications Director Brian Smith.

Both states restrict the sale of marijuana through a website, but neither explicitly states that vendors can't maintain a website for marketing purposes. There are regulations in place to prevent vendors from advertising to minors or making false claims about their products. For that reason, vendors might not want to tempt fate by putting themselves out there.

"If we have a business that is licensed and is under our license, and they were doing something on their website that violated our restrictions, there are things that we can do including writing violations that could lead to them ultimately losing their license," Smith said. "They have to act responsibly."

As for THC Media Group, Abbott agrees that marijuana vendors need to proceed with caution.

"There's a huge risk of people not putting very much thought into it and having the industry be seen as an unsavory or a detriment to society of people are marketing their products irresponsibly," he said. "Cannabis is still a drug and you have to treat it like one if you're going to be promoting your business."

To do so, Abbott researched how the tobacco and alcohol industries attempts to self-regulate and put together a short marketing ethics guide for marijuana vendors.

Though the success or failure of his business may ultimately depend on lawmakers, Abbott said he's not currently involved in any lobbying ventures. He's betting that the tide of the law goes his way and positioning himself to profit if it does.

"The majority of these businesses aren't to the point yet where they're going to be advertising online," Abbott said. "It's a ways off, we're just sort of laying the groundwork at the moment."

Image: Christopher Furlong/Getty Images

Topics: colorado, drugs, marijuana, Marketing, Startups, U.S., US & World, Washington