The thing I love about marketing is that it is always different. Sure, we’re always thinking about conversion ratios, our sales funnel, cost per lead, and other common metrics, but each industry and company will present unique challenges and opportunities that you will continue to test you as a marketer and entrepreneur. That’s why I was particularly excited to talk to Andrew Havens of Nganic this week. Nganic is an organic CBD oil manufacturer based in Reno, Nevada.
The hemp industry is uniquely challenging for marketers because of the peculiar restrictions and cultural issues associated with it. Those selling CBD oil know that, despite changing cultural norms, there is still quite a bit of resistance to anything that has any association at all with THC in America. For this reason, ads for hemp products will sometimes be turned down where other, unrelated products would be accepted without a second thought. Not only this, but the FDA strictly monitors and regulates the advertising of products derived from hemp. Any company that makes medical claims is held to a much higher degree of scrutiny and often faces consequences.
“You can’t say ‘buy CBD Oil’ on the Radio”
Andrew and I first discussed the media issues around advertising hemp. Many avenues are closed off to you that would otherwise be open. For instance, ads cannot be placed for hemp products on Google Adwords, Bing, Facebook, Instagram, and most other major platforms that advertisers take for granted. These companies refuse to carry ads for hemp for one reason or another, most often because they do not want to create any kind of tenuous association between THC and their brand.
Because of this, you have to be creative when advertising hemp products. Some mass media techniques are available, but by and large these are closed off as well. There will be the occasional radio or television program willing to air an ad, but this is the exception, and usually entails are large advertising budget. Consider also the costs of producing a high quality ad for a medium in which you may only be able to use it a few times. The fixed costs of doing this mean that for most companies in this industry it quite simply is not worth it. Many CBD oil companies then turn to less formal advertising techniques such as influencer marketing, SEO, email, and content. These methods allow hemp companies to get their message out there past gatekeepers that refuse to air it.
Problems with the DSHEA
As if these challenges weren’t enough, companies selling hemp products also have to deal with extreme FDA regulations. The FDA carefully controls what these companies can and can’t say about their products. When advertising to consumers looking to buy CBD oil, marketers have to be acutely aware of the Dietary Supplement Health and Education Act of 1994, or DSHEA. This law effectively means that companies selling CBD oil and hemp cannot make health related claims about their products. Although up to 69% of Americans say that low back pain affects their day-to-day lives, manufacturers cannot make health claims. The FDA has been very strict in enforcing these rules. Everyone in the industry is aware of what happened to Charlotte’s Web. For those outside the industry, Charlotte’s Web is the largest CBD oil distributor in the country. In 2017, they were sanctioned by the FDA and told to cease making health related claims in their advertising and threatened with further action if they refused.
All of this adds a further layer of complication to advertising hemp oil products. Advertisers in many industries are used to being given a wide berth in terms of what they are able to say about their products. However, anyone making claims about the efficacy of their product in the hemp oil industry is likely to face regulatory action. While some of these regulations may be loosening up because of certain language in the 2018 Farm Bill, things are not there yet. Ever since the Marihuana Tax Act of 1937, hemp products have been grouped in with Marijuana and strictly regulated. The 2018 Farm Bill finally removed hemp from the Controlled Substances Act. Despite all this, what advertisers can and can’t say about their hemp products is still heavily regulated. It’s hard for advertisers to imagine not being able to make efficacy claims about their own products, but this is simply the reality in this industry.
Because of this, the focus has to be on building brand loyalty and emphasizing customer service and other advantages. You can still differentiate your brand, you just can’t do it by making efficacy claims about your product. This is a unique challenge that a marketer is unlikely to see in any other industry. The good news is that everyone in the industry faces these restrictions, so while it may be frustrating, it is still a level playing field.
Those marketing hemp have most of the normal slate of options closed off to them and they cannot make the normal claims about their products that they could if there were in another industry. It is challenging, but those like Andrew Havens make it work. In some ways, operating in this environment makes you a better marketer because it forces you to be creative. To actually get in front of and build brand equity with your audience you have to always be searching out the newest techniques. If you can stay a step ahead of everyone else, you will succeed. I certainly respect Andrew as a marketer and an entrepreneur. After operating in such a challenging environment, he ought to be able to sell anything!