Thanks to the federal prohibition against cannabis and strict state regulations, marketing cannabis often means getting creative. Cannabis marketing in the real world can be a challenge, with traditional avenues of advertisement like billboards, radio, and television unavailable in many markets. Even social media promotion can land brands in hot water and lead to account suspensions or deletion, depending on each platform’s terms and conditions.
As a result of this challenging cannabis marketing environment, entrepreneurs are starting to leverage some highly creative options, including a foray into the new digital world known as “the Metaverse.” where they can set up shops, promote their products, and sell real-world merchandise and non-fungible tokens (NFT) to promote their brands. But is the Metaverse a worthwhile marketing investment or just a fad propped up by hype?
Cannabis marketing in the metaverse
Since many rules of the Metaverse remain unwritten, cannabis businesses — both plant-touching and ancillary — might be able to talk up their products more freely in the digital space. From digital dispensaries to NFTs, cannabis companies are lighting up the Metaverse with new advertising and marketing tactics. While you cannot purchase cannabis items directly inside the virtual universe, customers can enter virtual dispensaries and access digital sales registers to visit the websites of the actual dispensaries.
For example, Higher Life CBD Dispensary LLC became one of the first cannabis brands to open a Metaverse store in December, in the digital world known as Voxels. Higher Life CEO Brandon Howard says the store is visited by about 1,000 people daily. Though virtual visitors cannot purchase CBD products directly in the virtual store, they can buy them via a link to Higher Life’s website.
Another cannabis brand, Cannaland, has begun building a digital metaverse store where customers can pick up objects and get a 360-degree view of them. Cannaland founder Matthew Morgan told The Drum that the store will aim to feel just like an existing dispensary – featuring digitized buds to “[give] the consumer confidence in what they’re getting [and] what’s going to be sent to their house.”
And it’s not just cannabis businesses flocking to the Metaverse to experiment with new marketing tactics. Other major companies like Miller Light and Wendy’s have already begun promoting themselves in these digital spaces as well. In June, Wendy’s announced that they would be opening an online virtual restaurant where users can “earn reward points and virtual currency which may be used to purchase food and beverages in the real or virtual world.”
Key considerations for cannabis marketing in the Metaverse
As envisioned, Web3 – shorthand for the third generation of internet services — will function as a decentralized online ecosystem based on blockchain, where platforms and apps are owned by users rather than a central gatekeeper. But that doesn’t mean there are no rules whatsoever.
For third-party cannabis companies operating in legal states, hosting a product menu in digital Web3 universes such as the Metaverse is likely no problem, just as maintaining a menu on a website is generally permitted. Difficulties may arise, however, for brands attempting to sell cannabis products directly or gather sensitive personal information from a customer in the Metaverse. Meta’s current advertising policies say that companies “must not promote the sale or use of illicit or recreational drugs,” which could further complicate the fine line brands must walk.
It’s too soon to know exactly what will fly and what won’t in the Metaverse. While the emerging world of Web3 opens up some doors for experimentation, marketing in the Metaverse is risky as there is no precedent on how the rules will be enforced. While the weather balloons these pioneering brands are floating up will help us determine what to expect, it is vital to acknowledge the risks associated with unchartered territory.
“Like many other areas of cannabis marketing that were front-runners to compliance boards’ awareness and regulation, the best move is to be prudent about complying with the likely spirit of the eventual law,” noted Principle of alternative marketing group ALTER Strategies Wes McQuillen. “Anything owned by Meta is going to be operating within the Community Standards that already exist for Facebook and Instagram. Other platforms vary widely, so you need to do your homework and read.”
Aside from blurred lines regarding legal compliance and platforms’ terms of service, cannabis companies in the Metaverse may run into trouble reaching their target markets. While the metaverse is large and growing, it’s unclear exactly how many cannabis consumers are using the platforms and where. If most of your target audience isn’t engaged with the Metaverse, you could just be shouting into the void.
While the metaverse userbase is currently skewing young, McQuillen said it’s important to note that 74% of internet users say they would “join or consider joining the metaverse.
“There are 400 million unique monthly users of the metaverse, on track to be around 2 billion within 10 years,” he said. “The metaverse is vast, green fields for building brand early, securing first-mover advantage which has always been the biggest factor in building huge audiences on new social platforms.”
Although McQuillen does not recommend cannabis companies allocate a huge portion of their marketing budget to this, certain tactics can help. “Doing specific events in the metaverse on platforms that are equally accessible on laptops and phones as on virtual reality headsets and using it as an opportunity to co-brand or collab with partners. [That] has been the most effective thing I’ve seen done so far,” McQuillen explained.
What About NFTs?
The digital commodities known as non-fungible tokens (NFT) have been controversial, especially in the art world. But could they help cannabis companies spread brand awareness as more Metaverse users seek clothes and accessories for their avatars?
NFTs represent digital art, skins in an online game, real estate in the virtual world, and physical objects in the real world. Clever use of these novel assets might offer new cannabis marketing opportunities, something certain brands are already experimenting with.
For example, Kandy Girl, a company that sells THC-infused gummies, has been selling and gifting virtual wearables in Decentraland, including cannabis-themed NFTs. So far, the brand’s NFT sales on Decentraland total around $30,000, opening up a new, albeit small, revenue stream for the company. Another company, Califari, recently sold cannabis-related NFT artwork to support the criminal justice nonprofit The Last Prisoner Project.
Other companies like The Crypto Cannabis Club and CampNova have partnered to integrate NFTs into the cannabis space. By merging the NFTs with cannabis, the brands will provide blockchain investors an opportunity to own digital cannabis art that represent real-life cannabis strains. According to Kevin Fitzpatrick, CEO of The Crypto Cannabis Club, attaching the physical products in the latest NFT partnership makes the NFTs “redeemable” outside of the Metaverse and allows the owner of the NFT to shop CCC’s brand through CampNovaonline.com. However, it is unclear whether this constitutes a direct sale of cannabis products; time will tell if redeemable NFTs constitute a violation of terms of service that ban direct sales.
While wearable NFTs may be a safe bet as they are not tied to real-world cannabis sales, the varying terms and conditions between platforms make it difficult to pinpoint the exact penalties for violators. Cannabis companies who decide to market on any Metaverse platform should consider possible risks before diving in head first, including banishment from Metaverse platforms or even legal repercussions.
You don’t need the Metaverse for effective cannabis marketing
While the Metaverse offers interesting and exciting opportunities for cannabis marketing, the uncertainty and risks are considerable and the lack of precedent means it’s hard to know exactly what the future holds. Luckily, you don’t need to resort to the Metaverse to conduct effective, compliant cannabis marketing.
At CannaContent, our team of experienced marketers offers comprehensive cannabis marketing services that deliver a unified strategy that’s compliant with existing regulations across all your digital properties. By bringing web development, branding, content marketing, and social media marketing together under one roof, our team makes it easy for you to execute your vision, generate new leads, and drive sales the right way.
If you’re looking for new cannabis marketing opportunities, don’t hesitate — contact CannaContent today.