Cannabis startups have to navigate some rough waters: They can’t access federal funds or work with traditional banks, and they have to find customers across a fragmented market while adhering to local laws. But at least on the advertising front, a new Twitter update might signal smooth sailing ahead.
Twitter updated its advertising rules to allow cannabis companies — including those selling products containing THC and CBD, in addition to related accessories — to advertise on the platform under a strict set of guidelines in states where those products are legal. Twitter is the first major social media company to allow these companies to advertise.
Twitter’s advertising business has been hit hard since Elon Musk took over last year. It’s no surprise, then, that the company is trying to diversify its revenue funnels. Multiple cannabis companies told TechCrunch that this could be huge for the industry that has until now been locked out of the top advertising channels.
Ashley Fields, senior vice president of marketing and communications at Cann — a venture-backed startup that sells beverages with low levels of cannabis — said that to be able to access the same customer acquisition streams that have helped numerous other small businesses and startups grow is transformational.
“It’s such a massive step for all of us in the industry because it is access — finally — to a mainstream media platform,” Fields said. “This is the opportunity to get our message in front of way more people than ever before.”
Until now, cannabis startups had very few ways to advertise that weren’t on cannabis-specific platforms. They couldn’t tap Google’s sprawling ad operation — or any of the other top five digital ad companies — and instead could only pick from a mix of single website ads or physical posters and billboards.
Aaron Rivadeneyra, the director of e-commerce at Kiva Brands, said that being able to advertise on Twitter will be most useful for the cannabis and CBD edibles company as it expands into new markets.
He said the company, which will launch in New York later this year, gets a ton of traffic from states where cannabis is legal. But Kiva products aren’t available yet, and he thinks Twitter will be a much more effective way to let customers know when they can start looking to buy.
Chase Terwilliger agreed that Twitter allowing ads is a big step for the cannabis industry. Terwilliger, the CEO at CBD company Balanced Health Botanicals, one of the first companies to jump on the new opportunity, said that it also makes a huge difference to be able to use the platforms to educate potential customers about a product’s benefits, something they weren’t allowed to do before.
“For younger companies and startups, it could be kind of lifesaving to their business right now,” Terwilliger said. “I don’t know of a CBD company that is thriving from a financial perspective. The market is highly fragmented right now, and all companies are really struggling to get in front of the user and demonstrate what their products do and how customers can benefit.”
Fields said that the new guidelines themselves are a boon to the industry. Because advertising rules weren’t transparent, attempts to advertise would get taken down. She said that Instagram has shut down the company’s account — sometimes for up to two weeks — in the middle of rolling out a campaign.
“You can spend so much of your time and resources in building out campaigns, and for all you know you’ll put teaser content and you will be immediately shut down,” Fields said. “When one of the biggest platforms shuts [you] down before massive campaigns, there is really no other outlet in terms of how we get the message out there.”
The benefits for cannabis startups span further than just getting their products in front of potential customers, too.
The tools on Twitter’s back end give a more holistic view of how different ads perform and what types of content customers are engaging with. Rivadeneyra said that prior to this, they could only really track how their ads on cannabis-specific websites were doing, but they couldn’t get a good picture of how they were performing with an audience not actively seeking them out.
These cannabis companies hope that Twitter is just the first of the social platforms to open its advertising gates. “As long as we are compliant and legal, there is no reason why we shouldn’t be able to advertise on these platforms or these other social media companies,” Terwilliger said.
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