Banned by Facebook, Cannabis Companies Turn to Pot-Friendly Social Media
On a Friday morning in early February, Joe Hodas awoke to find the Facebook page he’d carefully cultivated for Denver-based Dixie Elixirs—as well as the company’s 11,000 Facebook followers—had vanished. Facebook administrators offered little in the way of explanation. A notification stated that content posted to Dixie Elixirs’ Facebook page violated the social network’s community standards. “We remove any promotion or encouragement of drug use,” it read.
Dixie Elixirs, a producer of legal cannabis products for Colorado’s state-sanctioned medical and recreational marijuana market, is one of dozens—and perhaps hundreds—of legal cannabis-related companies that have seen their social media accounts threatened or taken offline in recent months. Dixie Elixirs’ Instagram account was suspended under equally vague terms in January. Dozens—and by some estimates, hundreds—of cannabis-related companies operating legally within their respective states have suffered similar account suspensions in recent months, instantly losing social media followings that in some cases took years to develop.
“Facebook and Instagram were critical for us from a marketing perspective and for keeping in touch with our customers,” said Hodas, director of marketing at Dixie Elixirs. “It really cuts off an arm, so to speak.”
Industry representatives say Facebook and Instagram have been particularly aggressive in suspending the social media accounts of cannabis-related companies, and Apple has suspended certain cannabis-related apps from its App Store as well. The uneven and seemingly random account suspensions have created an uneven playing field within the industry and stripped legitimate cannabis-related businesses—and some that don’t actually sell cannabis products at all—of an important advertising and marketing tools, business owners and industry advocates argue.
It’s also spawning a new and growing strain of social networks tailored specifically to cannabis culture—a culture that is expected to generate $6.7 billion in legal U.S. sales this year alone and could potentially grow into a $21.8 billion industry by 2020.
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That revenue potential isn’t lost on Silicon Valley. In January, Peter Thiel’s Founders Fund joined a $75 million funding round for cannabis-centric private equity firm Privateer Holdings, signaling to many in the legal cannabis industry that pragmatic and progressive Silicon Valley stood in the cannabis industry’s corner. (Thiel was an early investor in Facebook, which acquired Instagram in 2012.) But faced with the legal gray area in which the legal cannabis industry operates, Silicon Valley has thus far chosen to play it safe given that U.S. federal law still technically deems the sale of cannabis products illegal.
As such, Facebook’s community guidelines prohibit content that promotes the sale of marijuana regardless of state or country. “In order to maintain a safe environment on Facebook, we have Community Standards that describe what is and is not allowed on the service,” a Facebook spokesperson told Fortune via email. “Anyone can report content to us if they think it violates our standards. Our teams review these reports rapidly and will remove the content if there is a violation.”
For Hodas and Dixie Elixirs—which produces everything from candy bars to beverages to topical creams, all infused with cannabis—the case might seem open-and-shut. But Hodas insists the company’s Facebook and Instagram pages have not violated community guidelines for either social network. Dixie Elixirs used its social media pages to engage customers with its brand, but strictly avoided any promotion of the sale of cannabis products or imagery that would run afoul of community guidelines. It also placed an age restriction on its page, Hodas says.
The lack of clarity surrounding why one account is suspended while another is not has become a common complaint around the cannabis industry. “We feel like we’re following the guidelines,” said Andrew Boyens, the owner of Natural Remedies, a cannabis dispensary operating legally in Denver. “But they’re pretty broad.”
Natural Remedies’ Instagram account was suspended in October. The company set up a new account and tried to rebuild its following, only to be shut down again two weeks ago. Its Facebook page was also suspended in January. Boyens said Natural Remedies’ Facebook page was age-restricted and the company never advertised or promoted the sale of cannabis on its profile.
“Brand awareness is where it’s killing everyone,” said Olivia Alexander, founder and CEO of The Crystal Cult, a vendor of fashion and lifestyle accessories that dovetail with cannabis culture. The Crystal Cult more or less started with an Instagram post, Alexander said, and now boasts 109,000 followers on the platform. “Anyone who says Instagram isn’t the number one platform right now is a liar, and what Instagram has done to our industry feels like a war on legal cannabis.”
Along with running her own company, Alexander handles marketing and social media accounts for a number of cannabis-related brands. For the most part, she’s able to keep those brands and a network of her own Instagram pages—accounts with names like @Buddfeed, @TheKushQueens, @EatWeedLove, and @Weed.bae—out of trouble. “But every post is something of a dice roll,” she said. “My brands that I rep, I make sure they have two or three accounts. And you’re just ready to be deleted anytime.”
This uneasy relationship between the legal cannabis industry and traditional social media has pushed companies like Dixie Elixirs toward a new breed of industry-specific social networks tailored to cannabis users and the companies vying for their business. Founded in 2013, MassRoots (MSRT) is like a cannabis-centric Facebook, allowing users and companies to create profiles, following trending news, share images and other media, and—perhaps most critically—advertise.
MassRoots now has a $44 million market cap and more than 725,000 users. Founder and CEO Isaac Dietrich said the company has fulfilled most of the requirements for listing on the NASDAQ, and he hopes to be listed later this year as its user base tops one million. “That’s when mainstream advertisers start to take you seriously, at one million users,” he said. “We’re hoping this year will be the year major national brands start advertising in the cannabis space.”
Though MassRoots was first to market with a cannabis-centric social network, it’s not alone. Social app Duby operates like an Instagram for cannabis culture, allowing users to circulate image-based posts referred to as “dubys” (pass the duby—get it?). Startup Social High launched late last year marketing itself as “Facebook for the Cannabis Community,” and it has amassed a small but growing community of users in 50 states and 65 countries, according to CEO and co-founder Scott Bettano. Powered by a third-party cannabis database known as Leafly, users can converse over and compare various marijuana strains much as wine connoisseurs might talk grapes, terroir, and vintages.
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In a kind of meta-drama, these cannabis-centric social networks have had their own troubles dealing with their mainstream counterparts. Social High’s app was rejected from the Apple App Store over its logo (the logo has since been changed and the app accepted to the App Store). MassRoots’ app was also briefly banned from the App Store last year before being reinstated. Last month, Instagram deleted MassRoots’ profile on the photo sharing network, costing the company some 390,000 followers. It has also received warnings from Facebook regarding its profile on that network.
For Hodas and Dixie Elixirs, the constant threat of account banishment and the persistent challenge of rebuilding its social media followings—only to likely lose them again—has pushed the company to re-evaluate how it prioritizes its social media marketing in the future. Dixie Elixirs plans to focus its energy on its MassRoots presence, Hodas said, despite the fact that MassRoots can’t provide the same vast reach as Facebook or Instagram. “On MassRoots we’re talking to people that are already aware,” he said. “It’s different, and we will miss some of that [Facebook and Instagram] audience.”
Others in the industry see this is as a critical moment for U.S. legal cannabis companies to demand that the broader technology industry take them seriously, both as legitimate businesses and as a collective multi-billion dollar market.
“I think we have to unify, we have to use our voice, and we have to continue to try to operate like a normal business,” The Crystal Cult’s Alexander said. “I can only speak for myself and my brands, but we will never stop. If they delete us, we will keep coming back.”