What happens when you combine an industry that’s prohibited from advertising the usual way — TV, billboards, online banner ads — but has a product people gravitate to, with an industry that puts fun business logos and messages on just about anything? You get a spike in sales of promotional products in Colorado, that’s what.
Marijuana dispensaries, legalized for recreational use in the state in 2014, face strict regulations for advertising on TV, radio, or the internet, as well as outdoors. So, if you’re a budding ganjapreneur, how do you help your customers remember where they purchased that primo batch of buds or tasty brownie? You put your logo, address, phone number, etc. on a hat, visor, lighter, pen, T-shirt, sticker, or anything else you can think of.
That’s exactly what has happened, according to research conducted by the Advertising Specialty Institute (ASI). The organization says promo product sales are higher in Colorado than any other state and growing at a strong clip, up 10% in 2015. The state does have a business-friendly climate and has been experiencing growth in several sectors, but ASI’s director of research chalks the high numbers up to the pot industry inhaling more than $1 billion in business in just two years — what’s often referred to as the green rush. One local promotional products distributor has said there’s opportunity in the “tens of millions of dollars” over the next few years. There are also several brands seeking to build a national reputation by sponsoring industry trade shows and other events visited by tourists who might remember the brand when, and if, it becomes legal at home.
Industry sources do caution that marijuana has so far been regulated similar to alcohol and tobacco. Since federal law prohibits tobacco advertising on T-shirts and other apparel, the freedom may be fleeting. And because advertising regulations in Colorado and other places with legal marijuana focus on not targeting minors, industry experts also caution retailers to be mindful of not passing out T-shirts and hats to just anyone anywhere. Safe places would be in the shop or at the increasing number of trade shows, where all attendees are required to be 21.
Industry Impact: Marijuana dispensaries must adhere to strict advertising rules but can find some freedom using promotional products like T-shirts, hats, and other items to promote their brands. Promotional product companies have an opportunity to court dispensary business by showing they understand the regulations and are open to working with the new industry.
Lynett Oliver is an Industry Specialist with D&B’s First Research, where she covers the oil, agriculture, and mining industries, mostly. Prior to that, she covered companies in a variety of industries for D&B’s Hoover’s. She’s also written for local publications, created training materials for Walt Disney World, and played a lot of board games. You can read her shorter musings on Twitter.