Tag Archives: text

Digital Marketing Tips to Help Grow Your Cannabis Business

By Steven Clayton
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The cannabis industry is quickly growing with the chance of sales tripling to $30 billion by 2023. With many rules and regulations that business owners must follow, marketing your cannabis business can be a challenge. While many may not know where to start with marketing, there are organic and simple tactics that owners can implement that can help drive more traffic to your website, resulting in more leads and sales.

Digital marketing is the most effective way to improve your brand’s online presence, reach your target audiences, rank higher on Google searches and ultimately drive more sales. Today, 81% of people turn to the internet before making a purchasing decision, but determining what digital marketing efforts are most valuable can be a daunting task for business owners. When looking to implement digital marketing strategies, businesses should leverage the 80/20 rule—focusing efforts on the 20% of the digital marketing tactics that yield 80% of the most impactful results. With this in mind, some of the key digital marketing tactics to implement today include:

Keep up with Reputation Management

This dispensary ad appeared on Variety.com

Having positive reviews for your company is key to having customers come back, and for new customers to try your business out. With 72% of customers not making a buying decision until they’ve read reviews, companies should prioritize soliciting for reviews from customers and stay up to date on the reviews that are coming in. Businesses should respond to all reviews, whether good or bad, as this shows to customers that the brand cares and values the customers opinion and feedback and wants to continue creating a positive experience for everyone. Reviews should be shown prominently on the business’s website for customers to clearly read and can also be used in emails or social media posts.

Make Search Engine Optimization (SEO) Top of Mind

Focusing on developing a solid SEO strategy ensures that customers can find your company on Google when they are searching. In оrdеr to rank well in search engine results, websites need search engine optimization (SEO), which is a powerful tool and a must if your company wants to be found online by customers. With Google processing 12.18 billion search queries in July 2020 alone and 93% of all online experiences beginning with a search engine, making sure your business can be clearly found and seen online is imperative for your cannabis business’ success. Keeping your website and basic information—such as hours, contact information and prices—up to date will keep your SEO high. 

Incorporate Customer Relationship Management (CRM)

PlugPlay, a California cannabis brand, stays relevant with creative posts like these.

Gathering customer emails is KEY and your business should have a solid plan on how to capture them, whether that’s an incentive for providing an email when they enter the site or one at checkout in the retail shop. Businesses should have the customer’s name, phone and email as a baseline to use to email or text blast out the latest promotions. From there, companies can also create a loyalty program for customers in order to give them an incentive to keep purchasing from your business. By creating targeted and personal messaging to customers with the help of CRM tools, loyalty is created to the brand, which can increase purchasing power and the amount spent.

Embrace Social Media

Social media is a part of almost everyone’s life and it’s the perfect opportunity to give customers an inside view into your company, the products you sell and any promotions or specials going on. Utilizing Facebook, Instagram and Twitter is essential for directly reaching your customer base with visually appealing and timely content. Social media is an opportunity to get personal with your brand and build relationships with your customers for them to see what kind of brand you are. Social pages should remain up to date and should be keeping up with the comments that followers are saying.

As more dispensaries and cannabis businesses pop up across the country, marketing your business may seem like a challenge for business owners, but simple and useful digital marketing tools can be incorporated into the business plan to create more quality leads and sales. Ensuring you have a strong digital presence for customers to find you and learn about your business online is the key to success.

FAQs: How Cannabis Businesses Can Avoid TCPA Liability

By Artin Betpera
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As the cannabis industry continues to experience growth in markets across the country, cannabis businesses are becoming an ever-increasing target of plaintiff’s lawyers in Telephone Consumer Protection Act (TCPA) lawsuits. Text messaging provides a potent channel of customer engagement, but at the same time is subject to strict regulations under the TCPA, with violators subject to steep statutory penalties of $500-$1,500 per message. While one-off cases won’t typically break the bank, that’s far from the case when many thousands of texts are bundled together in a class action. And this potential for big paydays means plaintiff’s lawyers have a financial incentive to file cases as class actions whenever they can.

Some well-known names in cannabis have been the target of TCPA class action. Cannabis delivery service Eaze has battled some fairly well-publicized TCPA class actions in the past couple of years. There has also been an assortment of dispensaries across several western states that have been the targets of similar lawsuits. Notably, these lawsuits share a common thread: they are based on marketing or promotional text messages sent to consumers.

In this landscape, firing off texts without the proper compliance safeguards is a game of roulette. At some point in time, one or more messages will invariably land in the wrong hands, sparking an expensive, high-stakes class action. In this competitive space, there are far more productive things any cannabis business can be doing than spending the time and resources on this type of lawsuit.

So how can your business avoid being caught in a TCPA trap? The following Q&A will walk you through some of the questions you should be asking if you are currently texting, or planning to text your customer base for marketing purposes. One quick note before starting: the TCPA has different rules for different types of messages (such as informational versus marketing messages). This Q&A will cover the distinction between these types of messages, but focuses on the rules around marketing messages since these are rules cannabis businesses get tripped up in most frequently when sued for TCPA violations.

Question: How do I know if the TCPA applies to me?

Answer: Are you texting your customers? If so, are you using some kind of platform that lets you send multiple texts at once? If you answered yes to both, then the TCPA most likely applies to you.

In short, the TCPA prohibits calling or sending texts to cell phones using an Automatic Telephone Dialing System (ATDS). Without getting into the many nuances of how courts have interpreted the legal definition of that term (and risk boring you to death), you can assume that unless you’re hitting send on each and every single text that goes to your customers, that you’re using an ATDS, and your texts are subject to the TCPA.

Q: So it looks like the TCPA applies to me. What now?

A: If you don’t have a compliance plan in place, now’s the time to implement one. To start, take stock of (a) how you’re sending texts; (b) who you’re texting; (c) where you obtained their phone number; and (d) whether you have their prior express written consent. That last part is key: under the TCPA, if you’re sending any text messages to your customers for “telemarketing” purposes, you’ll need what the TCPA calls “prior express written consent”.

Q: But I’m a cannabis business, not a telemarketer. Why should I worry about the TCPA again?

A: The TCPA’s rules requiring prior express written consent apply when the text is sent for “telemarketing” purposes, defined as “the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person.” Put simply, if you are sending texts to market or promote something you sell, then it’s likely the message will be considered “telemarketing” under the law. In contrast, if you’re sending a text for purely information purposes, such as sending a receipt for a transaction, or advising on the status of a delivery, then those message are still regulated by the TCPA, but subject to a more relaxed consent standard (a topic for another article).

Q: What do I need to do to get prior express written consent from my customers?

A: It’s important to know that prior express written consent is a technical, legally defined term that requires the caller be provided a written disclosure containing certain information and disclosures, which they “sign.” There are three key components to prior express written consent:

First, the consent agreement has to be in a signed writing. The law affords some flexibility here, allowing callers to obtain consent digitally through a number of mediums including web-based and electronic forms. If structured properly, consent may even be obtained through a text message flow.

Second, the consent agreement has to say certain things. It must authorize the caller to deliver advertisements or marketing messages using an ATDS, it must specify the phone number to which messages are being authorized, and it must say that the consumer doesn’t have to provide their consent as a condition to receiving goods or services.

Third, the disclosures must be “clear and conspicuous”. There’s no real rocket science here, but this is a very important part of the rule. It’s challenging to enforce an agreement that’s hard for a consumer to find or see, meaning the consent disclosures can’t be hidden away, in imperceptible font, or baked into another legal document (such as terms and conditions).

Q: I have a great customer contact database, but I don’t think I check all the boxes for prior express written consent. Can I still text them with specials and promotions?

A: No. At least not with your usual automated or mass-texting platform. But with some legwork, you can leverage your existing database and obtain consent. It’s not ideal, but it’s better than taking the risk of texting in this situation.

Let’s start with the fact that people like to get deals and specials on cannabis products, so there will likely be interest across your customer base for signing up. And with the flexibility afforded by the E-SIGN Act, businesses can try multiple avenues in obtaining prior express written consent from existing customers. This could include a call-to-action campaign, where consumers can initiate a text message consent flow by texting a keyword to a short code. The TCPA does not regulate e-mails, so businesses can consider an e-mail campaign that encourages their customers to follow a link that takes them to a web-based consent form. For businesses with storefronts, customers can be encouraged to sign up for texts on-site by filling out and submitting a form on a tablet device. Bottom line, there’s room for some creativity in designing campaigns to enrich your existing customer database with the necessary consent to send marketing texts.

Q: What happens when a consumer opts out of receiving texts?

A: You should stop all texts to their phone number unless and until they opt back in to receiving texts. Under the TCPA, a consumer has the right to revoke their consent, and any text message sent after an opt-out will violate the TCPA. This means it’s important to have clear opt-out instructions in every message you send (i.e. text stop to stop), and to ensure you have the proper systems in place to automatically suppress any further texts to the consumer’s phone number following an opt out.

Q: If I don’t follow these rules, what are the odds of getting sued for a violation?

A: Pretty high in my opinion. As mentioned, the TCPA is a very lucrative statute for Plaintiff’s lawyers. There are several thousand TCPA cases filed in federal courts each year, and lately cannabis businesses are becoming an increasing share of the defendants named in those suits. Additionally, the TCPA has a four-year statute of limitations, meaning exposure for non-compliant practices has a really long tail. It’s far easier to develop and execute a compliance plan up front, than to take on the risk that comes without one.

Q: Is there anything else I can be doing to protect my business?

Absolutely. Your TCPA compliance policy should be one layer of a holistic approach to legal compliance. Businesses have other tools at their disposal, such as arbitration provisions and class action waivers, that they can build into their consent-gathering process to further protect themselves in the event of a legal dispute.

Q: Any other tips to help keep my business out of the TCPA fracas?

A: Yes. Lots. More than I could fit into just this one article. But my goal here was to get you to think in the right direction when it comes to the TCPA, if you aren’t already. While I tried to make the basics of this as straightforward as possible, there are plenty of grey areas and nuance when it comes to compliance (especially when you inject the real world into the situation). This is where having lawyer experienced in this arena can come in really handy to vet your disclosures, review your compliance processes, and help you implement other risk mitigation strategies.

TCPA claims have become the cost of doing business when contacting consumers on their cell phones. But by being proactive, businesses have ample opportunity to mitigate their risk, and protect themselves in the event the legality of their text message campaigns is challenged.

It’s High Time for the Cannabis Industry to Pay Attention to Contact Compliance

By Daniel Blynn
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Communicating with consumers through the telephone—either by text messages or by calls—is a great way to engage with them. Indeed, a recent analysis of text messaging trends reveals that most consumers check their cell phones more than 20 times a day, with almost 20% saying they check it more than 50 times.1 Text messages have a nearly five-times higher open rate than email, and the average consumer has 96 unread emails in his inbox compared to about one unread text message at any given time.2 In short, used properly, text messaging is an effective medium to reach consumers. And cannabis companies have embraced texting with open arms, especially given that other forms of advertising currently are off limits to the industry.

But with the utility of text messaging consumers comes substantial risk. Cannabis companies are frequent targets of private litigation arising out of their texting practices. Over the past two years, dozens of class action lawsuits alleging unlawful text messages have been filed against cannabis companies, including well-known multistate operators and less recognizable ones. Most of these cases are ongoing and may rightfully be considered “bet the company” litigations. For example, a pending case against cannabis delivery company Eaze Solutions, Inc. alleges that unsolicited text messages were sent to 52,104 individuals.3 Assuming each putative class member received just one text from Eaze, the statutory damages exposure ranges between $26 million and $78 million. The court twice has rejected proposed class settlements of $1.75 million and, later, $3.5 million as being too low. Given the potential exposure, before cannabis companies click the send button on a text message, they need to ensure that they’re abiding by the law.

At the federal level, the Telephone Consumer Protection Act (TCPA) regulates all types of text messages, telemarketing and transactional/informational alike. Generally speaking, the TCPA governs how text messages are sent (i.e., manually versus automatically dialed), and how calls are conducted and voicemail messages delivered (live representative versus “artificial or prerecorded voice”).4 The TCPA also contains do not call rules applicable to marketing messages. The TCPA is enforced by the Federal Communications Commission (FCC) and, notably, through private lawsuits, including class actions. Under the TCPA, a private plaintiff can seek statutory damages of $500 for each unsolicited autodialed text message (or unsolicited call that utilizes an artificial or prerecorded voice or delivers a prerecorded message). If a solicitation text is sent to a telephone number registered on the National Do Not Call Registry or the cannabis seller’s own internal do not call list, the statutory damages are “up to” $500 per call or text. In all cases, statutory damages may be trebled to $1,500 if the TCPA violation was committed either knowingly or willfully.

These rules fit atop myriad state telemarketing and do-not-call laws, which may be more restrictive than the TCPA.

While I could fill up this entire website with the various calling and texting issues with which sellers generally struggle under the TCPA—such as the use of artificial or prerecorded voices and prerecorded messages, how to handle reassigned numbers, revocation of consent issues, etc.—this article focuses on the basic rules governing how cannabis companies can text consumers, and what types of consent they need to do so under the Act.

Overview of TCPA’s Consent Rules

Under the TCPA, a seller is required to have a consumer’s “prior express consent” in order to send an autodialed non-marketing text message to a cell phone; The consent rule for autodialed marketing text messages to cell phones are different in that they require “prior express written consent” (EWC). No consent is needed in order to manually send a text message (and note that “manually” does not necessarily mean that an individual must dial all ten digits and click send from a standard smartphone).

“Prior express consent” is a lower level form of consent and generally exists where a consumer voluntarily has provided her telephone number to the seller.

“Prior express written consent,” on the other hand, is a heightened consent standard requiring a written agreement bearing (1) the signature of the person called (either traditional “wet” signature or an electronic/digital one) that clearly authorizes the seller to deliver or cause to be delivered to the consumer telemarketing messages; and (2) the telephone number to which the signatory authorizes such telemarketing messages to be delivered. If the seller utilizes an autodialer to send a marketing text message to a cell phone, then the written agreement with the consumer must also clearly and conspicuously disclose both that (a) the text may be sent using an autodialer, and (b) the consumer is not required to provide his consent as a condition of purchasing any goods or services. This EWC to be contacted must have been provided by the consumer before the text is sent. Unlike the lower standard for prior express consent, the mere provision of a cell phone number to the seller does not constitute the required EWC to be contacted at that number via an autodialer marketing purposes.

Confusing enough? Don’t worry, a table summarizing the current TCPA consent rules is below:

What Type of Text Are You Sending?

Generally, the type of consumer consent that is needed to send a text message is a function of the type of text and how it is being sent. “Telephone solicitations” are subject to more restrictions than purely informational or transactional text messages. The TCPA defines “telephone solicitation” to be “the initiation of a [text] message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services.”

On the other end of the spectrum lie pure informational or transactional text messages. These are communications designed to provide information, rather than promote products and services (in the case of informational calls), and to “facilitate, complete, or confirm a commercial transaction that the recipient has previously agreed to enter into” (in the case of transactional calls). For example, customer satisfaction survey texts and texts to confirm orders and deliveries are informational and transactional, respectively.

Finally, the TCPA also covers a third category of text messages—“dual purpose” texts. These are texts with either a customer service or informational component as well as a marketing one. Because courts and the FCC take an expansive view of what constitutes telemarketing, dual purpose texts are treated as pure marketing messages and subject to the more rigorous standards to obtain the requisite level of consumer consent.

Common examples of texts that cannabis companies send and the corresponding level of consent needed are as follows: 

  • Autodialed Text Messages: Under the TCPA, an autodialer is defined to be equipment, which has the capacity to store or produce telephone numbers to be called using a random or sequential number generator, and to dial such numbers without a requisite level of human involvement. However, there currently is a “significant fog of uncertainty” as to what is and is not an autodialer, with different courts reaching conflicting decisions as to, for example, whether simply dialing from a curated list of targeted telephone numbers constitutes autodialing, or whether the numbers on that list must have been randomly or sequentially generated in order for a platform to constitute an autodialer.
  • While proceedings are ongoing at the FCC to clarify the autodialer definition, the Supreme Court recently agreed to decide the autodialer issue during its next term in a TCPA case filed against Facebook; a decision is expected by May or June 2021. Notably, in mid-September 2020, the Department of Justice filed a “friend of the court” brief taking the industry-favorable position that a platform itself must randomly or sequentially generate the telephone numbers that it texts to be considered an autodialer under the statute.
  • Texts sent by autodialer (whether the autodialing functionality is actually used to send the text or not) require consent from the recipient. Note that this rule generally applies to both individual and business cell phone numbers. As long as the text is not a solicitation message, then consent may be obtained orally. Alternatively, if a consumer provides his cellular telephone number to you via an online lead form or during the checkout process, then this should be sufficient to constitute “prior express consent” to receive autodialed non-solicitation texts, such as order confirmations or delivery updates. The key to obtaining prior express consent, however, is that the consumer provide you with his telephone number voluntarily.
  • However, EWC is required to send a text for marketing purposes using an autodialer. The EWC requirements are described above and examples of EWC are below.
  • Note that, under the TCPA, the seller has the burden of demonstrating that it had the requisite level of consent to send the text in question. Thus, cannabis companies should maintain records evidencing such consent. A good rule of thumb is to maintain such records for a period of five years from the date of text, which covers the TCPA’s statute of limitations and the limitations periods under most state telemarketing laws.
  • Manually-Dialed Text Messages: If a cannabis company manually sends text messages—e., using a device that does not have the capacity to autodial—then no special consent is needed. However, even for manually-dialed texts, applicable do not call lists must be checked.
  • Texts to Numbers on Do Not Call Lists: The TCPA also prohibits companies from sending marketing texts to consumers whose telephone numbers are registered on either the National Do Not Call Registry or the seller’s own internal do not call list, unless an exemption applies, such as calls with the consumer’s EWC or to consumers with whom the seller has an “established business relationship.”5 The TCPA’s do not call rules are agnostic to how a telephone number is dialed, whether it be manually or by automated means. Be sure to scrub against relevant do not call lists.

Best Practices for Obtaining Proper Consent

As noted above, for autodialed non-marketing text messages to cell phones, the lower level of simple “prior express consent” is required. Prior express consent is deemed to exist by virtue of a consumer having provided his telephone number to a cannabis company, either orally or in writing.

EWC for autodialed solicitation text messages, however, requires more. First, specific disclosures must be made “clearly and conspicuously” to the consumer. Specifically, a consumer should be advised and agree that, by providing his telephone number to the cannabis company, he is agreeing (1) to receive potentially autodialed (2) marketing text messages, and (3) that he is not required to provide his consent as a condition of making a purchase. This disclosure should not be placed beneath a submission button on a lead form or checkout page (unless an unchecked check box is utilized to demonstrate that the consumer has reviewed and accepted the disclosure); it needs to be unavoidable. The disclosure should be presented in readable, crisp font, both in size and in color, that contrasts against its background. For example, the following disclosures likely would pass muster to demonstrate EWC:

As you may now appreciate, the TCPA is a minefield (and this article just scratches the surface). However, with planning and a good compliance program, the law can be navigated to minimize risk while, at the same time, allowing for communications with cannabis consumers. Remember, an ounce of compliance now can lead to a pound of litigation prevention later.


Disclaimer: Using, distributing, possessing, and/or selling marijuana is illegal under existing federal law. Compliance with state law does not guarantee or constitute compliance with federal law. This informational overview is not intended to provide any legal advice or any guidance or assistance in violating federal law.


References

  1. Zipwhip, 2020 State of Texting, at 4 (2020).
  2. Id. at 11.
  3. See Lloyd v. Eaze Solutions, Inc., No. 3:18-cv-05176 (N.D. Cal.).
  4. Although the TCPA utilizes the term “calls,” courts have found the statute applies with the same force to text messages. This article focuses on text messaging but most of the principles extend to calls as well.
  5. There are two types of “established business relationships” (EBRs) under the TCPA: (1) inquiry EBRs and (2) transactional EBRs. Pursuant to a transactional EBR, a seller may text a consumer whose telephone number is listed on the National Do Not Call Registry for up to 18 months after the consumer’s last purchase, delivery, or payment—i.e., from the date of the seller’s last transaction with the former customer—unless the consumer asks the seller to stop calling him. In that case, the seller must honor the do not call request by placing the consumer’s telephone number on its own internal do not call list. Under an inquiry EBR, the seller may text a consumer who has inquired about its products or services, but only for up to three months. Again, if the consumer asks the seller to stop calling within that three-month timeframe, it must honor the request and add the consumer’s telephone number to its internal do not call list. Telephone numbers on the seller’s internal do not call list should remain on that list indefinitely or until the consumer subsequently provides her prior express written consent (or explicitly asks to be removed from the internal do not call list); a new EBR will not override an internal do not call request. Indeed, as to the latter, the Federal Trade Commission and several state attorneys general made this point clear in their briefing in a recent TCPA and Telemarketing Sales Rule litigation then-pending in Illinois federal court; the practical reason for the rule is that a consumer may wish to do business with a seller yet not receive telemarketing calls.

Practical Advice on How to Avoid a TCPA Suit

By Paul Gipson
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Texting consumers is a very effective means to drive engagement and ultimately sales. Text messages have outpaced emails when looking at conversion and click-thru rates. In fact, 95% of texts are read in ninety seconds or less! While text messages can be a great way to engage with prospects and customers, the FCC’s Telephone Consumer Protection Act (TCPA) is a regulation you need to be mindful of. In fact, the average cost of a TCPA settlement is over $6m dollars, which doesn’t include legal fees or reputational damage.

Over the past few years, there have been about 4,000 TCPA cases filed annually. Take a look at the growth:

Companies are being targeted for various reasons, but there are a few that I’ll cover below along with some advice on how to avoid TCPA suits.

See if you can spot the trend in these cases:

  • Papa Johns: $16.5m settlement due to texting pizza specials to consumers without their consent.
  • Abercrombie & Fitch: $10m settlement due to texting store promotions to consumers without their consent.
  • Rack Room Shoes: $26m settlement for texting their reward program members with various sales without their consent.

Do any of these campaigns sound like something your company is engaged in?

So, you’ve got someone who has signed up for a rewards program, wants to receive deals, or has provided their number to your company for other purposes, but you are concerned about the TCPA (hopefully). Based on my experience working with hundreds of clients at CompliancePoint, here’s where I think you should start. But first…

Quick assumption: Your company is using an automated system to send both informational and promotional texts. Examples include “blast campaigns” (upcoming sale) or “triggered campaigns” (signed up for rewards).

Quick point: Just because the text message says your store is having a sale but doesn’t ask the consumer to buy anything on the message, you may think it’s not considered “telemarketing”. This is wrong. Any plan to sell now or in the future through direct marketing is telemarketing and subject to the TCPA.

Here are my top 5 things to consider:

  1. Obtain consent. This is not achieved by simply having a number provided by the consumer. Instead, the consumer must affirmatively agree to receive promotional calls/texts by automated means. This is done through a clear disclosure and often accompanied by an unchecked checkbox.
  2. Honor opt-outs. This seems obvious right? Provide instructions on how to opt-out and look for other phrases like “stop/quit/cancel”. Opt-outs should occur immediately with most common texting platforms.
  3. Keep records. If you receive a complaint, you want to be able to respond confidently and records help you do that. The key records to maintain are your texting records (the phone numbers you texted, the date/time of the text, and the content of the text), your consent opt-in forms, and opt-out requests from consumers with dates. Ask yourself: what records do you need to prove you had consent, and what records prove you didn’t text a consumer after they opted out.
  4. Only text consumers between the hours of 8AM and 9PM according to their time zone. I always recommend going off address and not phone number due to cellphone mobility. If you text a California number at 8PM, but the phone owner lives in New York, you might get a few complaints.
  5. Monitor compliance with these items. Another one that seems obvious, yet most companies fail to do so, and you see above what happens. I guarantee you’ll find issues with most audits.

Bonus – here is a more comprehensive checklist on how to achieve a Safe-Harbor defense.

This article is not intended to be a scare tactic. The TCPA legal landscape is rampant and consumers are more aware now than ever of their rights. A quick Google search of “Cannabis TCPA” helps to illustrate the fact that this industry, like most, is not immune. However, with proper compliance parameters in place, your company can enjoy the benefits of texting with consumers with peace of mind.