Ad agencies prepare for the legal marijuana market

Employee David Marlow, right, helps a customer, who smells a strain of marijuana before buying it, at the crowded sales counter inside Medicine Man marijuana retail store, which opened as a legal recreational retail outlet in Denver Jan. 1, 2014. AP Photo

The slogan, “This Bud's for You” may already be claimed, but that isn't stopping advertising executives from dreaming about getting in on the burgeoning sales of legal medical and recreational marijuana – an industry estimated to already be generating revenues in the billions of dollars.

With medical marijuana sales legal in 20 states and the District of Columbia, and with Colorado and Washington legalizing recreational cannabis use for adults as of this year, many advertisers and marketers are honing their skills and preparing for a universally legal pot market.

Indeed, some industry observers say “stoner”-focused advertising is already here. Fast-food chain Taco Bell, a division of restaurant giant Yum! Brands (YUM), advertises its “fourth meal”menu to young consumers with the slogan, “you're out, you're hungry.” It also has a jingle that sings the praises of tending to your “late night munchies.”

Some marijuana entrepreneurs, like former Microsoft (MSFT) executive Jamen Shively are even establishing their own brands of cannabis in hopes of cashing on the growing business.

Mass-culture advertising of cannabis products “is going to happen quicker than you think,” said Greg Wagner, a former long-time ad executive who is now a lecturer and internship director in the marketing department at the University of Denver's Daniels College of Business.

Wagner believes the ad agencies are already working on how to counter the negative “Reefer Madness” and “Cheech & Chong” stereotypes of cannabis and its users.

“There is baggage there,” he said. “But if you think about it, there was probably baggage back in the Prohibition days, when [alcohol] became legal again.”

The key for ad companies and marketers, Wagner noted, will be to come up with the right image for mass-marketed cannabis. Their goal is to make it not only acceptable, but hip, perhaps by creating a spokesperson equivalent to Dos Equis beer's popular “most interesting man in the world” ads.

Big corporations – especially the big brewing companies, which have decades of experience marketing a somewhat controversial product to adults – also may be ready to jump in if and when marijuana becomes a legitimate, nationwide business.

“And once they get in there, you are going to see some major branding going on,” Wagner said. "I can see Anheuser-Busch getting involved in this. I heard rumors of this over a year ago -- that they would probably get in there.”

Wager believes “Big Marijuana” companies will also come up with a half-dozen or so different brands of cannabis, targeted specifically to different groups of consumers like young adults, smokers who want a high-end, premium experience and perhaps even specialty markets.

And then there are potential movie and entertainment tie-ins in which characters and films are designed to appeal to a new generation of marijuana users.

“Instead of 'Rocky Mountain High, Colorado' we could have 'Rocky Mountain High... and a Taco!'” Wagner laughed.

If the trend toward legalizing marijuana remains successful and gathers momentum – and if the right advertisers and sponsors become involved – cannabis ads could become commonplace.

“I wouldn't doubt in five years we're going to see a Super Bowl commercial,” Wagner said. “I think it's coming, and maybe I'm wrong, or maybe it will be two years! But I could see a 60-second commercial featuring marijuana.”

  • Bruce Kennedy

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