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Facing red tape online, marijuana companies are inventing a totally new breed of advertising

Reuters/Lucy Nicholson
There has to be a better way.
Published Last updated This article is more than 2 years old.

What do you do when the advertising world shuts you out? You slip through the backdoor.

That’s what marijuana companies are doing to circumvent strict pot-ad bans by companies such as Google and Facebook. Ad exchanges, marketplaces where digital ad space is traded in bulk, also tend to steer clear from anything cannabis-related.

Earlier this week, a company named Bang Holdings launched a service that will use social media personalities to market weed-related products. Mantis, another company specializing in pot advertising, places online marijuana ads through its own network of cannabis-friendly publications and other tech tools.

Pot may be legal in some form or another in almost half of US jurisdictions, but the industry is having trouble shaking off its shady roots.  The federal government has provided some guidance on how state rules should interface with federal law, but the Obama administration has said little about advertising aside from clarifying that it’s illegal to do so through the mail.

That makes the mainstream advertising industry reluctant to get involved in anything cannabis-related, marijuana-ad companies say. Advertising marijuana, for example, could be construed as aiding and abetting drug trafficking, they add. Google, Yahoo, Facebook and Twitter all have policies that prohibit the promotion of illegal drugs.

Marijuana revenues topped $3 billion last year, and are expected to be more than double that by 2020, according to trade publication Marijuana Business Daily. Those companies want to build national brands.

“You’re pretty much cut out,” of mainstream advertising, said Paris Holley, chief technology officer at Mantis. The business started out as a publication, Medical Jane, then branched into advertising after it didn’t have enough ad space.  Now it places ads in more than 250 mostly pot-related sites which received more than 12 million unique visitors over the past month, Mantis said.

The company has also developed a url-shortener, a tool anyone can use to divert followers who click on a link shared on social media to an ad page before taking them to the final destination. It has also created a video-hosting platform similar to YouTube that allows marijuana ads.

Bang is more subversive. The company was started by Steve Berke, a pot activist and YouTuber known for parody videos such as the one below:

Bang’s plan is to bypass online ad bans by publicizing brands in posts by affiliated “influencers,” which Berke says have more than 10 million followers. While the ban on pot promotion also applies to product placement and sponsored videos on sites such as YouTube, Berke says Bang has developed ways for the influencers “to tease their fans and use the trust of their audience to re-direct them onto one of our proprietary sites.” He declined to name the network’s members for fear that they might lose sponsorships if they’re associated with a marijuana enterprise.

The company, which started trading over-the-counter last month (stock symbol: BXNG), is also avoiding connections with companies that sell drugs to the public directly. Berke says he wants to have “some peace of mind at night that the federal government is not going to break down my door and arrest me.”

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