Cannabidiol is big business. Since the federal government reclassified the Cannabis extract, thousands of businesses across the country have capitalized on the substance’s medicinal properties.
And it’s not only companies that are willing to wade into waters that were, up until recently, murky from a legal perspective. According to a study conducted by Royal CBD, 65 million Americans have used CBD as of January 2020.
This is an astonishing figure and one that illustrates the size of the CBD market. Especially considering that it’s only going to grow as the substance inevitably gains more mainstream appeal. How much growth? Well, the New York-based investment bank Cowen & Co reports that the industry is expected to be worth $16b by 2025. So yeah… big business.
The Role of Advertising Platforms
However, it’s in growing the market that most CBD companies are experiencing a major obstacle: digital advertising regulation.
Facebook has been especially uncompromising in the application of their policies preventing the paid promotion CBD products. The social media giant’s advertising policies prevent the advertising of “illegal products or services,” “drugs & drug-related products,” and “unsafe supplements”.
Whether CBD products deserve to be in any of these three categories is highly debatable. Firstly, CBD is perfectly legal. Secondly, it contains none of the psychoactive properties found in Cannabis. Lastly, there is very little evidence to suggest that CBD is “unsafe”.
It’s in the last point that Facebook appears to find its main foothold in pushing back against CBD advertisers. The term “unsafe” is quite ambiguous and broad. What does “safe” mean”? And who determines whether one product is safe or not? Well, somewhat problematically, when it comes to the content advertised on their platform, it’s Facebook themselves.
The Impact on Small Businesses
This has resulted in a huge amount of issues for numerous CBD companies and digital marketing agencies. Many have found their business accounts disabled after running ads promoting CBD products. In most cases, these accounts weren’t retrievable. Shut down without warning. Simply for mentioning the product in the adverts or on the landing pages they are linked to.
Understandably, this has resulted in huge losses for small businesses that rely on Facebook marketing. An instant ban with no way to recover the page is a massively disproportionate punishment. One that some small businesses won’t be able to recover from.
Despite the massive outcry from affected businesses, not to mention a lawsuit over how this ban was applied, Facebook has been disturbingly unwilling to speak out about the situation. Until recently, however, when a company spokesperson finally provided some clarity.
A Shift in Policy?
According to Digiday, an unnamed source at Facebook has advised that the company has lifted its uncompromising ban on any advertisement for CBD products. While the new policy seems arbitrary and is still relatively difficult to make sense of. But at least its progress.
Here are the details of the new policy.
- Pages may run ads that feature topical CBD products only. This refers to products that are applied to the skin and specifically excludes those that are ingested.
- Adverts may never feature the actual product itself, regardless of how it is applied.
- Adverts can direct the user to landing pages that feature both topical and ingested CBD products.
The most critical take-way from this change is that the most common forms of CBD products: those that are eaten or inhaled, have been omitted. This will no doubt be a massive blow to CBD companies hoping for a more extensive change in policy. Essentially, only creams, lotions, and patches will be affected by this shift.
It also bears pointing out that the second point above may need additional clarification. How does one go about advertising a product without “featuring” it. Indeed, what is the definition of “featuring” the product? Can it be named in the advert copy? Can an image of it be used?
With the rise of product review websites, the question also becomes: is one allowed to advertise posts that feature CBD products, without explicitly advertising them? We asked Johnny Green of Weed News for his opinion.
“Again, these seem to be aspects of the policies that Facebook themselves want to be the sole judges of. Which is a worrying notion, given the hundreds of thousands of businesses that rely on it. As well as the harsh penalties.” said Green.
Is Facebook Doing Enough?
The source continued, saying: “Our policy remains the same. We don’t allow people to promote CBD or ingestible hemp on Facebook. The update to non-ingestible hemp was made months ago.”
The fact that the policy change had been made months earlier without any official word from the company is somewhat troubling. Given the amount of issues it has caused to numerous businesses, it would be ethically sound for them to be more upfront about such a crucial (albeit minor) shift in policy.
Could their reluctance to create transparency speak to a larger, hidden agenda? Or is the company simply trying to protect themselves against fallout from promoting medicinal products with mostly anecdotal effectiveness? Is the slope really as slippery as they think?
Or is this simply a case of carelessness? Given the size of the CBD industry, this seems unlikely. Facebook stand to lose quite bit of money in opportunity cost if they continue to prevent the advertising of these products.
Their motivation for remaining nebulous about this topic is a mystery to industry experts. As is the company’s reluctance to simply open the floodgates for all types of CBD products. Regardless, these are the cards that CBD companies shave been dealt.
Potential Issues with the New Policy
No doubt some of the more creative marketers will find innovative ways to push the boundaries of what will be permitted. Unfortunately the penalties for falling foul of these poorly defined policies are so strict that many will be reluctant to do so.
Whether Facebook’s notoriously dodgy AI will be able to accurately distinguish between digestible and topical CBD remains to be seen. There may well be legitimate adverts that use imagery or language that gets incorrectly flagged. This could be result in another huge headache for advertisers.
As it stands, despite the omission of digestible, it appears as if many CBD companies and their marketing agencies have been thrown a significant lifeline. It remains to be seen how well this can be taken advantage of and if Facebook will simply be using this as a test prior to relaxing their draconian policies entirely.