Keeping Your Dispensary SMS Campaigns Complaint

Text message marketing via MMS or SMS messages is a powerful marketing tool for all businesses regardless of the industry. With a 98% open rate and 90% of text messages being opened within three minutes of being sent, Text message marketing is the most effective way to communicate with and market to your customers.

Text message marketing lends itself exceptionally well to cannabis businesses because it allows them to abide by the various state marketing laws and regulations, and avoid the restrictions on cannabis businesses. This, combined with the fact that cannabis companies cannot advertise through traditional channels or even through social media marketing, has made text message marketing one of the most popular methods to reach customers in the cannabis industry.

While text message marketing allows cannabis companies to comply with the laws and regulations related to cannabis marketing, text message marketing is governed by its own set of Federal laws and regulations known as the Telephone Consumer Protection Act (TCPA) set forth by the FCC.

In this article, we will give a broad overview of the various laws and regulations associated with text message marketing and give you some basic guidelines regarding how to remain compliant and avoid a lawsuit. But, before we get too specific about the rules let’s talk a bit more about what text message marketing is.

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With how much time and energy it takes to run a cannabis company, you don’t want to further burden yourself by getting yourself with a lawsuit that you could have avoided had you familiarized yourself with the laws and regulations related to text message marketing.

There are various levels of regulations that you will need to familiarize yourself with when using text message marketing, so for your convenience, we separated them into three different levels of compliance: State, Federal, and Carrier.

While this is not a comprehensive list, the following are some of the most important laws that you’ll want to familiarize yourself with. But be mindful, laws and regulations may vary depending on the state you operate in and the carrier your messages are being sent to.

Text Message Marketing Terminology

Before we delve into the regulatory environment lets define a few common terms related to text message marketing for businesses.

• A2P
  • Application-to-Person messaging means business applications like springbig or any other marketing software is used to send mass messages.
• P2P
  • Person-to-Person on the other hand is traditional texting and is exactly what it sounds like: sending messages from one person to person.
• SHAFT
  • This is an acronym for ‘Sex, Hate, Alcohol, Firearms, and Tobacco’. Cannabis was eventually included under this umbrella as the legal industry took off, making cannabis marketing via text messaging subject to heavy filtering and regulations.
  • Traditionally, A2P messages go through shortcodes, but unfortunately, these require the campaigns to be vetted for and thus bar cannabis businesses from using them in marketing. This is because the primary MNO trade association, CTIA, institutes best practices under what is known as SHAFT guidelines to prevent unauthorized content related to specific topics.
• Short Codes:
  • Short codes are 5- or 6-digit numbers made for businesses looking to send out mass text message campaigns. These kinds of messages are made for sending millions of messages a day but come with drawbacks like a long process for campaign approvals, cost, and low deliverability. Due to the industry guidelines and heavy filtering, short codes aren’t a viable option for cannabis businesses.
• Toll-free long codes:
  • A good alternative to shortcodes in A2P messaging. They’re cheap and appear as 10-digit phone numbers, but can appear foreign to customers receiving them compared to the other options. On top of this, they’re only capable of a few thousand messages per day, making them ineffective for mass messaging.
• Long local codes:
  • These are the typical phone numbers that you’re used to seeing with 10-digits and designed for P2P texting. This means they are only meant to support a couple of hundred messages per day, as they aren’t intended for large-scale texting campaigns. On top of that limitation, using them for A2P texting is against CTIA guidelines.

Federal Communications Commission (FCC)

The FCC does a lot more than just oversee communications in the cannabis industry. That being said, they’re the ones who passed the TCPA.

Essentially, the FCC is in charge of regulating the TCPA (which we will discuss below) and the regulations under it. So, if you get a fine for violating the TCPA, it’s coming from the FCC.

That being said, the federal government is way behind states in terms of the full legalization of marijuana. While there are a number of federal cannabis laws that you’ll want to familiarize yourself with when operating a cannabis company, the two that you’ll want to be especially familiar with in regard to your text message marketing campaigns are the…

Telephone Consumer Protection Act (TCPA).

According to the TCPA, businesses are barred from sending text messages to consumers without first obtaining explicit written consent. On top of this, businesses must be clear on exactly what it is the customer is subscribing to. That includes directions on how to opt-out, and instructions to get help if needed, and informing the customer that enrolling in your text message marketing program is not required to make a purchase.

They should also receive a link to the full terms and conditions of the program and the privacy policy. Violating this act can prove costly, at $500 per negligent violation and $1500 per each unlawful text sent intentionally, violations can rack up and get you in a lot of trouble if you’re not careful.

CAN-SPAM Act

Another important federal law that you’ll want to familiarize yourself with is the CAN-SPAM act. Under this act, businesses cannot send unwanted text messages to cell phone numbers, not including messages related to transactions or relationships. Under this law recipients of messages must also be able to identify the message as an add, and be able to opt-out.

CTIA Carrier Rules and Regulations

On top of the laws and regulations at the state and federal level, there are also carrier rules and rules from the Cellular Telecommunications Industry Association (CTIA) that can affect the text message marketing strategy of your cannabis business. Not following the rules laid out by the CTIA or carriers could lead to your account being suspended.

State-level Privacy Protection Laws

The state level is one of the most important and complicated when it comes to compliance. Depending on the state you are in, regulations may be more or less stringent, but they are all equally as important to abide by. For example, California state law under the California Consumer Privacy Act (CCPA) can affect how messages are sent and what they can include.

While there is an endless amount of state laws we could touch on here, it’s best to familiarize yourself with the laws that could affect your text message marketing plans in the state in which you operate.

How to stay compliant using springbig

With all of these laws and regulations, making sure you’re compliant may seem like a daunting task, but avoiding legal fees and adhering to the various laws and regulations is actually much easier than it sounds.

The most important thing when it comes to compliance is getting consent from the customer. you’ll want to get explicit permission from your customers before you send them a message, twice actually. That’s right, you’ll need to get permission twice from your customer in order to remain compliant with the TCPA and other laws and regulations. But how do you do that?

The first option is as follows: upon enrolling in a retailer’s loyalty program/text message marketing program in-store, the customer will be prompted to review the terms and conditions of their consent to the retailer which includes giving the retailer their consent to send text messages. They will then be prompted to sign to confirm their consent which is the important part. You’ll want to file the signatures.

If the customer does not sign up in-store and instead signs up online, then customers typically sign up in one of three ways: sending a text to a dispensary-specific text-to-join code, scanning a QR code, or through the dispensary’s website.

After the customer has signed up in-store or online, then you’ll still need to get another round of consent. Typically this is done by sending them a text message that prompts them to respond to opt into the text message program. The problem with this is that most people when sent this text message, most people do not respond ‘Y’ or ‘Yes’ and thus do not opt into the program.

360 Permissions Compliance Suite

Luckily, with Springbig’s 360 Permissions, our own compliance suite, there is a fix to this problem. Customers first opt-in by giving their phone number once they give their phone number the subscriber is sent a customizable join form which they can fill out and even sign digitally right on their phone. In this way, cannabis dispensaries satisfy the double permission requirement without having to send the inefficient opt-in text that so often gets ignored.

With 360 permissions, not only do you get access to a customizable join form that can be accessed on your website or used for in-store enrollments, but you also get text-to-join, tap-to-join, and scan-to-join abilities via join codes, an NFC chip, and custom QR codes. You even receive access to multichoice join flyers and an electronic signature color app for collecting signatures from customers.

Besides collecting signatures and receiving double consent, the final requirement in order for your business to remain compliant is to give the customer an option to easily opt-out. It can be as simple as something like, ‘Reply STOP to opt-out’ the end of every message.

Not following the rules and failing to stay compliant could get you in a lot of trouble. Luckily by following the steps above and familiarizing yourself with the laws and regulations regarding text message marketing, you’ll be able to avoid any legal trouble and focus on growing your business.

For detailed information on how springbig implements compliance tools, read our terms