How cannabis retailers and dispensaries stay in compliance with text messaging

9 minute read
How cannabis retailers and dispensaries stay in compliance with text messaging

For cannabis retailers and dispensaries, text messaging (SMS) is one of the primary ways they communicate offers, deals and updates to their customers. And staying in compliance is not only important, it’s the law. This guide provides helpful information about text marketing rules and keep within compliance for text messages.

Please note, This guide is for informational purposes only. We recommend contacting an attorney to seek additional advice pertaining to the TCPA (Telephone Consumer Protection Act) and SMS marketing.

Cannabis marketers love SMS marketing

SMS marketing is a channel of communication available to upwards of 98 percent of consumers. And, according to research conducted for the Cellular Telecommunications and Internet Association (CTIA), the average response time for text messages is 90 seconds.

For cannabis marketers, text message marketing is a powerful tool they can use to reach their customers. But cannabis retailers are also held to very specific regulations for how they market and communicate to their customers. But this also mean SMS marketing works well for cannabis and CBD businesses because the laws and regulations are clearly defined by each state.

This makes it imperative that laws and best practices are followed when it comes to text message marketing. And, that cannabis marketers need to stay in compliance with the law.

SMS marketing laws and compliance

In the United States, cannabis is not federally legal. And, it is listed as a Schedule 1 substance by the Drug Enforcement Agency (DEA). Both the CITA and individual states heavily regulate SMS marketing for SHAFT (sex, hate, alcohol, firearms and tobacco) content. This includes cannabis, CBD and other related products.

U.S. Governing Agencies and Acts

In the United States, Cannabis SMS marketing is directly governed by:

The FCC may fine businesses $500 to $1,500 per unlawful message, not including any damages or other legal fees.

Unfortunately the TCPA rules and regulations are confusing. And, this is especially concerning for cannabis and CBD marketers.

Canadian Governing Agencies and Acts

In Canada, SMS marketing is governed by:

Examples of what can be considered illegal within your SMS marketing includes:

  • Use transactional language, e.g. “buy now”
  • Promote sales or offers, e.g. “20% off”
  • Imply health benefits, e.g. “lose weight”
  • Promotes recreational use
  • Marketing cannabis in states where it is not legal

However, TCPA does outline specific requirements for how to be compliant. For example, the TCPA requires that businesses use a double opt-in method prior to sending text messages. A double opt-in, or double-consent, requires the recipient to give direct consent prior to receiving the text message.

This means that unless you have received consent to send someone text messages, you are not in compliance with regulations.

Note, while this post is not meant to convey legal advice, we do recommend our customers follow these best practices and seek legal advice regarding cannabis text message compliance.

For more best practices, see our Text Message Marketing Best Practices for Cannabis.

The good news is you can use text messaging / SMS marketing as part of your cannabis and CBD related marketing efforts as long as you stay in compliance and follow best practices. But you need an SMS marketing platform built to enforce compliance.

Frequently Asked Questions

Below are some frequently asked questions you may have as it relates to the various laws and agencies:

What is the TCPA and why should I care?

The “Telephone Consumer Protection Act” (TCPA) is a law passed in 1991. It limits the use of robot dialing systems, artificial / prerecorded voice messages, SMS text messages, and fax machines sent to consumers.

What happens if I violate the terms of the TCPA?

The FCC may fine businesses $500 to $1,500 per unlawful message, not including any damages or other legal fees.

What is the CTIA and why should I care?

The Cellular Telecommunications and Internet Association (CTIA) is an organization that represents the U.S. wireless communications industry in the United States. The CTIA outlines best-practices and recommendations that telecommunications companies require.

What is the enforcement for CTIA?

CTIA is not a federal law. However, choosing not to follow the guidelines defined by CTIA may impact how your SMS marketing is delivered.

What are the best practices for compliance?

The best practices for text message compliance are outlined below and are built-in to the DailyStory SMS marketing tools.

DailyStory and cannabis SMS marketing campaign compliance

These text message marketing rules are “on by default” in DailyStory. They are in-place to help ensure your SMS marketing is compliant, but it is your responsibility to enforce it.

1. Double-opt in text message recipients

As noted above, the FCC requires opt-ins from consumers prior to sending text messages. There are multiple ways you can opt your customers into receiving SMS marketing:

  • When shopping online and signing up for a loyalty program
  • When checking out in the store, opt-in for text messages
  • As part of your point of sale system, e.g. during “checkout”
  • Texting a keyword, such as “START” or “JOIN” to your text message number

Depending upon how a customer has signed up SMS marketing, we always recommend running a double opt-in campaign. Double opt-in is available to any DailyStory customer within their automation templates.

There are 2 types of double opt-in campaigns you can run:

Reply-back double opt-in

A reply-back double opt-in sends a text message to the opted-in number and asks the recipient to confirm that they wish to receive text messages. This is especially important when you opt a user in on your website – you need to verify that mobile number used to sign up is agreeing to receive SMS marketing.

A reply-back double opt-in is simple and efficient.

Form-Based Opt-in

A form-based opt-in texts back a link to the opted in number asking them to complete a form with additional details. While form-based opt-ins are more comprehensive in what is “captured”, they can be overly burdensome for the recipient.

2. Always include “STOP” to opt-out

Recipients should be able to easily opt-out of your text message campaigns, too. Replying with STOP, QUIT, REMOVE or other keywords should opt the recipient out of text messages.

Always include “Reply STOP to opt-out” in all of your messages. While not required, it is strongly recommended.

DailyStory automatically inserts this language with a single click while building a text message. Additionally, you will receive a warning from DailyStory’s deliverability scoring tools if this text is not included.

3. Update your website’s terms of service

Your dispensary or product website should already have terms of service. We advise all DailyStory’s customers to update their website’s terms of service to include additional terms of service for their SMS marketing campaigns.

We’ve put together an example  terms of service for text message marketing. However, you should consult with your attorney to ensure this terms of service is right for your business.

Additionally, we recommend include the following at the bottom of all website pages:

Standard message & data rates may apply. For help, text “HELP”. To opt-out of any [dispensary name] SMS marketing, text “STOP” or contact Support.

4. Monitor your text message replies

Text messaging is a two-way conversation, and you should always monitor the replies to the text messages you send out. Occasionally, you will need to manually opt-out a recipient.

If you receive messages such as these, you may be sending to a non-opted-in number:

  • “Who is this”
  • “Who sent this”
  • “I didn’t sign up for these”

If you receive these types of replies to any of your cannabis text messages, your compliance might be at risk. In these cases it is best to both reply back and confirm the recipient wishes to receive SMS marketing from you.

You can manually opt out a contact from receive text messages.

In addition, DailyStory will monitor for certain known phrases and keywords that indicate a text message recipient no longer wishes to receive your messages. Examples include, “STOP”, “QUIT”, “UNSUBSCRIBE ME”.

Note, DailyStory is not case sensitive for these keywords.

5. SMS marketing audit log

DailyStory maintains an audit log of all opt-in and opt-outs. Including those done by users within DailyStory. This ensures that you have a documented audit trail of all opt-in and opt-out actions performed on your contacts.

The exception to this is when contact records are imported and come into the system as “opted-in” no audit log entries are created.

When importing data into DailyStory you can additionally specify the opt-in status.

6. Maintain a do not send list

When the time comes and you change from one marketing platform to another, such as moving to DailyStory, ensure that your opt-out settings are honored.

Honoring customer opt-outs is critical to staying in compliance with federal regulations. This is one of the reasons why, when a record is created in DailyStory, it can be soft-deleted by not permanently deleted. It is important to maintain the opt-in/opt-out status of the contact along with any audit logs associated to the contact.

7. DailyStory deliverability scoring

DailyStory includes a deliverability scoring tool for text messages. It can help catch messages that include objectionable or illegal text.

While the deliverability score of your text message doesn’t guarantee compliance, it can help and prevent carrier violations, too.

What to avoid when running a cannabis SMS marketing campaign

When sending text messages to cannabis customers, there are some important text message marketing rules you should follow to stay in legal compliance.

1. Never purchase lists of mobile phone numbers

Do not purchase or share lists of mobile phone numbers. None of these recipients have opted in to receive your text messages. This is illegal, and you will be directly out of compliance with FCC regulations.

2. Don’t send text messages to numbers that are not opted-in

Same rules apply, even if you have a mobile number for a customer: If you do not have a customer opted-in to receive text messages, you cannot send them text messages.

3. Don’t send messages to numbers that have opted out

Once a recipient opts out of text messages, you cannot send them any text messages until they opt-in again.

DailyStory tracks the opt-in status for every recipient automatically. Recipients that have opted-out cannot receive text messages.

4. Don’t market in states where cannabis is not legal

For many cannabis retailers, this is a difficult problem to solve. As an example, a dispensary in Colorado may receive out-of-state visitors. If those out-of-state visitors live in states where cannabis is not legal, you should not be sending them text messages.

DailyStory solves this by allowing customer segmentation by geographic location. This allows you to only market to customers within a given distance of your store or within your state.

Not only will this keep you in compliance, but it can also save you money.

In conclusion, focus on compliance

Focusing on the compliance of your cannabis SMS marketing ensures that customers who want and expect your messages receive them. Text messaging is a powerful tool for cannabis marketers and following the guidelines in this article will help you run successful campaigns.

For more best practices, see Text Message Marketing Best Practices for Cannabis.

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