The legal cannabis market has been booming lately. According to an article on Fortune, cannabis culture is anticipated to generate $6.7 billion in legal US sales this year. If that appears large, it has nothing on future projects for the industry. It is expected that the legal cannabis culture market could reach $21.8 billion by 2020.
However, despite the influx of spending and revenue in this area, traditional social media sites have been slower to embrace cannabis culture. For instance, Facebook (NASDAQ:FB) has community guidelines that prohibit content promoting the sale of marijuana. These guidelines are in accordance with US federal law which deems the sale of marijuana as illegal. However, specific states in the US have legalized cannabis in specific circumstances. This has created tension between Facebook’s nation-wide standards and state-specific views on cannabis.
Online social networking challenges for cannabis companies
Small, legal cannabis companies have been hit the hardest by Facebook’s strict community guidelines. For example, Joe Hodas told Fortune about his experience having the Facebook page Dixie Elixirs removed under the guidelines. The Denver-based company had 11,000 followers when its page disappeared off of Facebook. According to a notification, it was removed in accordance with the social network’s community standards: “we remove any promotion or encouragement of drug use,” it said.
However, Hodas assures the publication that in fact none of the content on the page was promoting or encouraging drug use. He had been careful to remain well within the community guidelines outlined by Facebook. The seeming unfairness of this action has prompted ire in the legal cannabis business community, as many other companies have seen similar things happen to their social media sites.
MassRoots offers social media solution
Enter MassRoots. MassRoots (OTCMKTS:MSRT) is like a cannabis-centric Facebook, which allows users and companies to network online. With a current user-base of 725,000, and the expectation to achieve one million users by the end of the year, enthusiasts in this space are clearly taking note. MassRoots has a market cap of $44.6 million and plans to list on NASDAQ later this year, suggesting that investors should also be paying attention.
This online social networking site presents an opportunity for companies in the sector to get their message across to potential customers. While it doesn’t yet have the wide breadth of Facebook, advertisers are speaking directly to an audience of committed and interested potential consumers. Thus, MassRoots is a compelling product on two fronts: it provides an outlet for cannabis-enthusiasts to share their thoughts, in a manner that’s not currently acceptable Facebook, and it also offers a renewed advertising opportunity for companies that feel marginalized by Facebook’s current community guidelines. For investors keen on both social media and cannabis, MassRoots may be just the place to look.
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Securities Disclosure: I, Morag McGreevey, hold no direct investment interest in any company mentioned in this article.