Amir Cohen/ Reuters
- French ad holding network Havas is launching Havas ECS, a consulting arm centered on cannabis and cannabinoids.
- Its aim is to help pharmaceutical, health and wellness companies navigate cannabinoid medicine through research, training, education, and advisory services.
- While Havas ECS wants to lead the way in education and research, it will not help its clients produce or buy advertising — at least not yet.
- Still, it appears to be the first launch a cannabis practice at the holding company level, which could signal that cannabis-related advertising is becoming mainstream.
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As the burgeoning cannabis industry attracts billions of dollars in investment, a major ad holding company wants to get in on the action.
France’s Havas is launching Havas ECS, a consulting arm in its health division Havas Health & You centered on cannabis and cannabinoids, active compounds found in the marijuana plant.
The consultancy, whose name is a play on the biological system called the human endocannabinoid system (ECS) that regulates many aspects of human health and wellbeing, is being led by Rob Dhoble, a healthcare communications professional who was most recently CEO of digital health company Adherent Health.
Havas Health & You"While cannabis and cannabinoid use is on the rise both for self-care and healthcare reasons, there isn’t enough communication around the science and wellness benefits, contributing to missed opportunities and mistrust," Dhoble told Business Insider. "All the players including brands, consumers, and doctors need to know more and be more empowered."
Havas ECS wants to lead the way in cannabinoid education
With US consumer spending on legal cannabis expected to reach $22.2 billion by 2022, 64 million Americans saying that they have tried cannabidiol or CBD, and medical marijuana and recreational marijuana now legal in 33 and 11 states respectively, Havas sees a clear business case for launching the consultancy. Education is also something that cannabis brands struggle with.
"We have to spend a lot of time educating, showing the legitimacy of our message, the professionalism of our creative, and proving our credibility," MedMen’s chief marketing officer David Dancer told Business Insider earlier this year. "It gets tiring."
Havas ECS’s aim is to provide research, training, education, and advisory services in cannabinoid medicine to pharmaceutical, health and wellness companies. It hopes to promote scientific understanding of cannabinoids among public health and medical professionals, healthcare providers, insurers, and businesses.
The company is launching the arm with 10 to 15 staffers, including medical experts, advisors, and consultants with background in cannabinoid medicine applications, said Donna Murphy, global CEO of Havas Health & You. Like other consultancy, it will charge clients by the hour. The consultancy plans to host its first educational conference this fall.
Havas ECS will develop and sell licensed educational modules, host seminars, and sell research, customer and market insights, regulatory assessment and training, product and category exploration and market plan development to brands. The goal is to bring in at least $10 million in revenue in its first year, said Jeff Hoffman, Havas Health & You’s chief development officer.
"We’re at the dawn of a tremendous stage of innovation, but while tons of work is happening around individual products and their applications, there is not enough gas in the tank education-wise to make the shift happen," said Dhoble.
Havas appears to be the first to launch a cannabis-focused practice at the holding company level
While Havas ECS wants to lead the way in education and research, it will not help its clients produce or buy advertising. Cannabis companies face regulatory hurdles that differ at the national, state, and county level. Platforms have differing and murky rules for advertising cannabis and cannabinoid products.
Plus, marijuana is still illegal under federal law, so it’s hard for agencies to get paid for such campaigns, as banks view such transactions as risky because they can be considered money laundering, according to the American Bankers Association.
US marijuana retailers spent an estimated $4.1 million on advertising in 2018, up 23% increase over 2017, according to Kantar. That’s a fraction compared to the $151 billion US advertising market.
For these reasons, cannabis-related advertising has largely been the domain of small, independent agencies such as Wick & Mortar and Gram by Gram. Havas appears to be the first major ad agency holding company to launch a cannabis consultancy at the holding company-level.
As for other agencies, MDC has no policy on working with cannabis companies on the holding company level but its agencies such as Anomaly have had such clients. Some of Dentsu’s agencies have done work for cannabis companies, said chief growth officer Mike Russell. Omnicom has given communications and policy guidance for clients looking into FDA-approved pathways for cannabis, a spokeswoman said. An IPG spokesman said that it evaluates each opportunity on a case-by-case basis, which includes consideration of the legal status of the product.
Publicis wouldn’t comment and WPP did not immediately comment on its cannabis policies.
Big-name brands like American Eagle have gotten into CBD and hemp products recently. Outside of marketing, a number of law, investment banks and accounting and consulting firms have recently made inroads into the industry.
Havas creating a consulting arm is a sign of cannabis-related advertising becoming mainstream and could lead to other big agencies and holding companies following suit, said Paul Ellis, EVP of sales and business development at Mesmerize, a national out-of-home ad agency that has been doing marijuana advertising work in legal states.
"Bigger agencies and holding companies have been hesitant so far because of regulatory issues as well as the fact that they tend to chase bigger clients with bigger budgets," Ellis said. "It’s been a bit of a Wild West until now, but a big ad network taking charge and leaning into it will certainly help."
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