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CBD Companies Sued Over Allegedly Unlawful Text Messages

The CBD industry is still relatively new, and many of the companies and organizations that take part in it are run by young entrepreneurs and even younger support staff. You couple this youth with a highly competitive industry full of brands looking to take any possible advantage over one another, and you have an environment where mistakes and missteps are fairly common.

Some of the latest headlines to hit the internet come from consumers suing CBD companies for alleged spam messaging. In one case, Kentucky resident Justin Smith filed a nationwide class-action lawsuit last March in federal court against a California-based dispensary named Purple Lotus. Another incident in April involved a Denver man named Bryce Abbink suing Denver-based dispensary Good Chemistry. These cases revolve around the promotional efforts these companies were making and whether they violated federal telemarketing laws. 

“Defendant’s unsolicited text messages caused Plaintiff actual harm, including invasion of his privacy, aggravation, annoyance, intrusion on seclusion, trespass, and conversion.” the lawsuit against the California dispensary asserts. 

The law in question is the Telephone Consumer Protection Act (TCPA). According to the TCPA, marketing efforts cannot extend to direct contact with consumers unless they give prior, express consent. It seems, at least in the case of Good Chemistry, that Mr. Abbink was subscribed to their loyalty program, though he claims the company had failed to get his consent for their repeated deal offers sent via text. 

Both of these cases are still ongoing, and it will be interesting to see just how the results will affect future marketing efforts by CBD dispensaries around the country.

It Is Not Only CBD Companies Making These Mistakes

It seems that there are a number of new and digital services, many outside of the CBD industry, that are also relying more heavily on automated marketing efforts, many of which deal with direct text messaging. A company that specializes in minimalist and “nomadic” lifestyles named Nomatic, LLC is also being sued over their use of automated marketing text messages. 

The online digital retail space, much like the CBD world, is highly competitive and full of young organizations desperate to outcompete their rivals. This has also bred an environment where inexperienced marketers seem to be running afoul of federal regulations and are, in turn, being sued by the exact customers they had hoped to win over. To be fair, larger companies like Uber were making these same mistakes years ago when they, too, were looking to get the word out about their brand. 

Businesses need to learn from these mistakes and make efforts to ensure they do not repeat them in the future.

Understanding the Telephone Consumer Protection Act (TCPA)

As we have many CBD industry members who regularly read our blog, we think it is worth the time to point out just what is and is not allowed under the Telephone Consumer Protection Act (TCPA), hopefully helping them avoid it making these same mistakes. 

The TCPA states that without express consent, you may not:

  • Make a call before 8 a.m. or after 9 p.m. local time.
  • Make a call if the target has chosen to opt-out of calls from the specific caller or have added their name to a Do Not Call List.
  • Withhold the name of the person or organization on whose behalf you are calling. 
  • Send automated messages (calls or texts) to the receiver without express permission.

The telephone consumer act was created long before text messaging was a thing, way back in 1991. However, there have been many updates to the act, and it has been scrutinized in several legal cases since that time. The United States Supreme Court in Facebook v. Duguid tackled the topic of text messaging and decided that it would fall under the same provisions regarding automated calls. 

Lower courts and the Federal Communications Commission have also responded to this issue with the same answer, that “calls” for the purpose of the law encompasses text messages. Due to these rulings, lawsuits regarding automated text messaging have been allowed to go forward. 

It should also be clear that getting a phone number from a customer is not the same as getting permission to contact them with automated messages.

How Should a CBD Company Advertise Itself?

There are countless ways to market directly to your top consumers these days that don’t require invading their personal space or flat out annoying them, though there is no single correct answer. The best way to market will depend heavily on your brand and the market segment you seek to target.

 Social media, such as Facebook or Instagram, allows for highly targeted ads, and there are still the traditional methods of creating deliverables such as newsletters, email blasts, or direct mail if you want to take advantage of a customer list.  

A clear target market and effective messaging will go a long way in helping your marketing dollars pay off.

Building SEO around your brand and site, attending trade shows, using influencers online, the list of possible opportunities is endless. If you are smart about how you spend your money, you can easily see a strong return on investment. Start small and track your results to the best of your ability. As you see certain methods paying off, you can begin to increase spending down that pathway. 

Be creative and craft a message that stands out. Just make sure whatever you do that you won’t end up turning your target audience against you or winding up in court.

Keep Up To Date With the CBD Industry

At CBDOil.com, we will continue to keep you up to date with the latest news and information pertinent to the CBD industry. We are constantly updating our site with the latest products and going-ons on the CBD world. Check back often for reviews and updates to products, brands, and more.

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