Colorado and Washington state residents can pick up their pot stash from their local stores. But those stores cannot — yet — advertise on three of the most popular sites online: Google, Facebook, and Twitter.
Pot, which became legal for recreational use in the two U.S. states, remains a sore subject for the two Silicon Valley social giants, as their policies restrict the promotion of drugs or drug-related activities on their advertising platform.
According to GigaOm, trade group The Cannabis Industry tried to pay Facebook to promote certain pot-related stories that linked to reputable news organizations, like The New York Times, but were shot down by the social network.
Exactly what the subjects of those stories were remains unknown.
There is, at least for these companies, a fine line between promoting pot legislation (whether for or against) and encouraging pot consumption.
There is a sense of irony here, in that Google and Facebook both promote themselves as freedom-of-speech loving and liberal (for the most part) companies. In not keeping with the times, even if it is just two U.S. states, it's indicative of a wider reluctance to embrace a widely untapped and emerging ad market segment.
Money or morals?
Pot alone is worth millions in the two U.S. states. One report suggested pot sales hit $1 million across Colorado on the first day alone.
Widen that figure out and pot could soon be a greater market than smartphones.
Researchers recently estimated that as much as $2.34 billion worth of pot could be sold in 2014, an increase of 64 percent a year earlier. Comparatively, the smartphone market expanded by just 46 percent between 2012 and 2013.
It's one of the fastest growing "legitimate" industries on the planet, even if it remains illegal in many states and countries.
And pot could be an even bigger business online. The trouble is nobody's going for it. Even the Denver, Colorado-based CBS affiliate doesn't accept dispensary advertising, according to AdAge, because the law prohibits it. (CBS is the parent company of ZDNet and CNET.)
Advertising online, however, remains legal but a moral dilemma for many companies. And there are conditions: the directed ads must be targeted at those who are legally allowed to smoke pot. For Colorado or Washington residents, that's age 21 whether you like it or not — even if the legal age (for now) to smoke regular cigarettes is aged 18.
And, across borders, things can get even trickier. The U.S. Justice Dept. in 2011 fined Google a total of $500 million in ad proceeds for selling ads from Canadian pharmacies pointed at U.S. residents.
Facebook, Google, and Twitter all refuse to allow ads on their sites that contravene their policies on pot. And it's not as clear cut as "pot equals no." There are conditions, such as in Google's case, that allow the promotion and sale of accessories that reference drugs, but disallow selling of paraphernalia that can be used to smoke with.
What the companies are saying
Because the legality around the sale or use of pot greatly varies around the world, Facebook says it is part of the reason why it strictly prohibits the promotion the sale or use of the drug.
The social network attempts to maintain the balance, as it states in its advertising guidelines, by allowing ads to "promote advocacy or the legalization of marijuana," as a political outlet to its more-than 1 billion users, but after that is where the line is drawn. "Ads may not promote or facilitate the sale or consumption of illegal or recreational drugs," a Facebook spokesperson told ZDNet.
"The risk of attempting to allow ads promoting the drug in certain states or countries where it is legal is too high (no pun intended) for us to consider at this time," he said.
"The risk of attempting to allow ads promoting the drug in certain states or countries where it is legal is too high (no pun intended) for us to consider at this time." — Facebook spokesperson
But, Facebook still tries to differentiate between the two: the promotion of pot in a political sense, and one that might result in you getting completely baked. And if Facebook has to err on the side of caution, it will.
Google takes a similar moral approach, and also sets out the deal in a more refined way for advertisers to clearly see what they can and cannot do, a spokesperson said in an email. While the search giant hasn't made any changes to the policy as it stands today, the keywords use in its AdWords advertising platform are regularly reviewed and updated.
Meanwhile, a Twitter spokesperson said in an email that first and foremost, the microblogging giant sees the platform as a way for users to "share and receive a wide range of ideas and content, and we value and defend our users' ability to express themselves."
But, she said, advertisers have to be treated differently — partly due to the ability to promote tweets that contain ideas and values beyond their followers and demographics (unlike the significantly greater granular controls that Google and Facebook give their advertisers). She said there are "limitations on the type of content that can be promoted."
And the door isn't closed to the current policy either. Twitter is willing to budge if the laws and user values change: "We are constantly reviewing and updating our policies which are informed by a number of factors — including the unique nature of the Twitter platform, the evolving legal landscape, and our immediate concern for our user safety."
How do we hash this thing out?
The advertisers hinted that although things likely won't change until the laws change beyond the two pot-consuming states, the rules are the rules for now.
Facebook, Google, and Twitter may be missing out on a key part of the vastly untapped ad market, particularly as the views of the world are changing around it, but there have to be limits. Guns, pornography, alcohol, and tobacco products are all legal in the U.S., but self-prohibited from numerous ad companies and platforms.
For the three advertising supergiants, it may be promoting free speech in what the users can say and do, but it doesn't apply to what the users should be forced to see in return for a free service.