Wednesday June 29, 2016
According to The ArcView Group, the cannabis industry will grow from a $7.1 billion market to an estimated $22.8 billion by 2020. With this extreme projection in growth, it's no wonder that larger corporations are eyeing these very green opportunities -- and there sure are a lot of them.
Just this summer, Microsoft quietly made history with a partnership that could inspire more large businesses to get into the cannabis space. In June, the software giant partnered with a cloud computing company that makes it easier to track marijuana plants. The tracking software opens the door for smaller companies to prove the quality and safety of their products, as well as analyze industry trends. But what makes this partnership so historic?
Challenging Federal Obstacles
Of course, the past decade has been filled with headlines that push the bar of progress forward for cannabis lovers. After Washington and Colorado voters legalized recreational marijuana in 2012, many other states followed their lead with laws that loosened or removed criminal restrictions on possession. Many forecasters and industry insiders assume that history will continue to push forward, making recreational marijuana as legal as alcohol throughout the United States. However, this recent headline is perhaps the most significant because of one major barrier that still stands in the way: federal prohibition.
Despite the fact that half of the United States have legalized medical marijuana, the federal government doesn't recognize its medicinal value and continues to classify it as a Schedule I drug with "high potential for abuse". That means selling marijuana is still a federal crime, even in states with legal marijuana sales.
Many companies see this as a barrier to cannabis transactions. However, Microsoft actually saw an opportunity to help companies deal with this discrepancy between state and federal laws. Because the new software will make it easier to track each plant "from seed to sale", legal marijuana sales will be easier to analyze as well.
Will History Repeat Itself?
Millions of Americans are adapting to a world in which recreational marijuana is suddenly, finally legal. The comparisons to prohibition – and its eventual repeal – are obvious, but alcohol has been legal for much longer than weed, so it's difficult for some brands to embrace it as the next regulated, recreational substance.
Beer companies may still provide a useful model for companies that want to pursue marijuana. Though the alcohol industry may actually have a vested interest in preventing legalized marijuana – some argue the competition would be too hot – it's helpful to look back at the evolution of beer and liquor campaign strategies. Big brands like Budweiser are able to market alcohol's recreational benefits while encouraging safe consumption, and cannabis could be the next commodity to fill that marketing niche.
Of course, marijuana has medicinal benefits that alcohol does not. In fact, some strands have few if any recreational benefits. That's why most publicly traded marijuana companies are pharmaceutical corporations and startups; these companies offer medical treatment options and conduct research while developing products for future consumer products.
Branding Marijuana as a Mainstream Product
When any new product emerges on the market, marketers are always sure to hone in on its potential. Though cannabis isn't necessarily new to most modern consumers, legalized transactions are still new and limited to a handful of states, so legitimate marijuana businesses are exploring the world of cannabis branding for the first time.
Of course, branding and marketing are crucial components of any company's success, and they're especially important to corporations, which often spend decades building associations between their names and certain qualities or demographics. The biggest, most established brands will only want to take on marijuana if it fits their carefully crafted images. And with the federal government still classifying it as an illegal and harmful drug, that may be prove difficult.
That's where marketing comes in. Today's technology provides infinite marketing opportunities, and cannabis is such a new and promising commodity that some marketing agencies are already focusing exclusively on it. Facebook and Google still don't allow marijuana advertisements, but these agencies and their clients may pave the way for future companies by legitimizing marijuana as a consumer product, countering myths and stigmas with positive and useful benefits.
HighBridge Creative and Cannabrand are the first of these marketing pioneers. Operating out of Denver and offering a variety of marketing services to cannabis growers, dispensaries, and other vendors and brands that cater to marijuana consumers, these agencies are mostly in the business of boosting up small businesses. Colorado's legalized dispensaries, farms, and trade shows rely on agencies like HighBridge Creative and Cannabrand to handle everything from their storefront signs to their social media campaigns and Cannabis Cup booths. And as these businesses continue to build a foundation of consumers and develop positive, marketable brands in states like Colorado and Denver, more national brands may take note and dive into the industry too.