BUSINESS
08/30/2013 07:30 am ET Updated Aug 30, 2013

Marijuana Doesn't Just Sell Itself, As Marketers Face Resistance From Google, Media Companies

In spite of what you may think, legal pot doesn't just sell itself, marijuana's marketers are finding.

Small advertising agencies that focus on marijuana retailers say they expect demand for their work to pick up next year, when Colorado and Washington state begin allowing recreational pot sales. But even the shifting public attitude toward marijuana won't make pitching pot easy.

The marketers said they're finding much of the media industry remains hostile to pot businesses. Online search giant Google wants nothing to do with them, as do many newspaper publishers. Billboard operators are reluctant to offer them space. Even some pro-marijuana activists said they worry that an out-and-proud embrace of marijuana advertising could spark a reactionary backlash.

The ad agencies also face the legal challenge that federal law considers their work abetting a criminal conspiracy to distribute narcotics. Marijuana remains illegal under federal law, even though the Justice Department said Thursday it would not interfere with licensed recreational sales in Colorado and Washington.

"To specialize in this, you really have to know your shit," Jared Mirsky, owner of Seattle-based Mirsky Media, told The Huffington Post, "Nobody really jumped on it before because there were so many risks involved. But what kind of entrepreneur doesn’t want to take a crack at a lucrative opportunity?"

Mirsky, whose company has worked for several medical marijuana dispensaries, is starting a new company specifically focused on advertising cannabis. He said he'll offer search engine optimization, Web page design, and marketing consulting, including advice on how to get good feedback on the reviews website Yelp.

Noel Abbott, founder of Denver-based THC Media Group, is also jumping into marijuana's so-called "green rush." Abbott said his business began the day after Colorado voters decided to legalize weed for recreational use. Gambling on the future, he bought dozens of domain names that he thought marijuana retailers would want. MainlyMarijuana.com and MarijuanaDaddy.com are two. He's hoping to sell those brands to clients, while also offering Web page design and other marketing services.

Abbott noted that his business model has some unusual challenges. The Internet's most popular advertising platform, Google AdWords, does not allow ads to appear when users search for drug-related terms.

"It’s clearly a very touchy social and political issue," Abbott said.

Pot marketing faces roadblocks in other media as well. Newspaper publishers have shied away from accepting dispensary advertisements, which are technically illegal under federal law, pushing the ads into alternative weekly newspapers. City ordinances, even in weed-friendly places like Denver, have banned outdoor advertising for pot.

An unusual wrinkle in the federal tax code classifies marijuana dispensary operators as narco traffickers, making marketers accomplices in a criminal conspiracy. More immediately, the provision prohibits dispensaries from deducting advertising expenses on their tax returns, according to tax expert Pat Oglesby. In tax terms, businesses involved in the marijuana trade “are treated worse right now than ordinary criminals,” Oglesby said.

Overcoming that stigma may be the ultimate business challenge for marijuana marketers.

"There’s a lot more opportunity to market, but until it's legal at the federal level, it’s just gotta grow on people, I guess,” Mirsky, the Seattle marketer, said.

Mason Tvert, a vocal advocate for the cannabis industry, said medical marijuana retailers have found ways to market themselves that don't involve billboards, Google postings or ads in local newspapers. Pot dispensaries, for example, have been able to sponsor charity walks and sports tournaments. In states where medical marijuana is legal, shops have worked with concert promoters to brand live shows.

But cannabis still has a way to go before it's seen as mainstream by established advertising platforms, Tvert said.

“Ultimately, the biggest frustration is dealing with these antiquated beliefs about marijuana and the knee-jerk reaction to it,” Tvert said.

ALSO ON HUFFPOST:

PHOTO GALLERY
HuffPost
BEFORE YOU GO
Legal Marijuana Across The U.S.
PHOTO GALLERY
Legal Marijuana Across The U.S.

CONVERSATIONS