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Tuesday, September 23, 2014         

NEW YORK TIMES


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Papers find recession relief in marijuana ads

By Jeremy W. Peters

New York Times

POSTED:



COLORADO SPRINGS, Colo. » When it hit the streets here last week, the latest issue of ReLeaf, a pullout supplement to The Colorado Springs Independent devoted to medical marijuana, landed with a satisfying thud.

Forty-eight pages in all, it was stuffed with advertisements for businesses with names like Mile High Mike's, Happy Buddah and the Healthy Connections (which enticed potential customers with promises of "naughty nurses" to tend to patients' needs).

A full-page ad in ReLeaf costs about $1,100, making the publication a cash cow for The Independent, which has used its bounty from medical marijuana ads this year to hire one new reporter and promote three staff members to full time. The paper has also added a column called CannaBiz that follows news from across the country; its author is the new marijuana beat writer.

What would happen in the many communities now allowing medical marijuana had been a subject of much hand-wringing. But few predicted this: that it would be a boon for local newspapers looking for ways to cope with the effects of the recession and the flight of advertising -- especially classified listings -- to websites like Craigslist.

But in states like Colorado, California and Montana where use of the drug for health purposes is legal, newspapers -- particularly alternative weeklies -- have rushed to woo marijuana providers. Many of these enterprises are flush with cash and eager to get the word out about their fledgling businesses.

"Medical marijuana has been a revenue blessing over and above what we anticipated," said John Weiss, the founder and publisher of The Independent, a free weekly. "This wasn't in our marketing plan a year ago, and now it is about 10 percent of our paper's revenue."

It is hard to measure what share of the overall market they account for, but ads for medical marijuana providers and the businesses that have sprouted up to service them -- tax lawyers, real estate agents, security specialists -- have bulked up papers in large metropolitan news markets like Los Angeles, San Francisco and Denver.

"This is certainly one of the fastest growing industries we've ever seen come in," said Scott Tobias, president and chief operating officer of Village Voice Media, which publishes alternative weeklies.

Alternative weeklies are not the only publications raking in medical marijuana lucre. Dailies like The Denver Post and The Bozeman Daily Chronicle in Montana are taking advantage of the boom and making no apologies about it.

"My point of view is, for the moment at least, it's legal," said Stephanie Pressly, publisher of The Daily Chronicle, adding that the paper generates about $7,500 a month in advertising from medical marijuana businesses. "The joke around here is that it's a budding business."

Newspaper publishers saw an opening for medical marijuana advertising after the Obama administration said last fall that it would not prosecute users and suppliers of the drug as long as they complied with state laws. Although many states have made legal allowances for medical marijuana for nearly a decade (the total now is 14 and the District of Columbia), that decision freed more people to market and sell it as a medical product.

Advertising demand for the drug grew so quickly in Village Voice Media's Western markets that the company started publishing supplements late last year. It gave them cheeky names like "Chronic-le" in Denver and "The Rolling Paper" in San Francisco, Los Angeles and Orange County. The tag line in Denver displayed underneath a smiling, sauntering, sandal-wearing cartoon joint reads, "Your Guide to Medical Marijuana. Enjoy."

In Colorado, where people have likened the explosion of medical marijuana to the state's 19th-century gold rush, the market for ads and information about the drug has been especially strong. The summer 2010 issue of The Chronic-le, at 48 shiny pages, included features like "Toke of the Town," a summary of the latest marijuana-related news, and a roster of the nearly 250 stores in the Denver area that sell marijuana.

Tobias said that in Denver money from advertising for marijuana-related businesses has totaled 15 percent of the weekly Westword's revenue this year and nearly 40 percent of its classified advertising revenue. A small, eighth-page display ad on one of the paper's glossy inside pages can cost $550.

As other advertisers pulled back, spending by marijuana-related businesses has filled the gaps, Tobias said.

"There were less jobs, so there was less employment advertising. The rentals and real estate market collapsed to some degree, so there were less ads for those," he said.

Medical marijuana, he added, "is a welcome revenue stream."

In the California papers, marijuana revenue is smaller, but it still provides a boost. It totals 8 percent of The OC Weekly's revenue; at The SF Weekly it is 5 percent.

But the drug is more than just a profit center for Westword. It has become a journalistic staple for the paper.

Westword's editor, Patricia Calhoun, has attended public hearings on marijuana laws and live-blogged about them herself. Articles about marijuana on the paper's website remain one of its biggest draws.

"I said the industry is growing faster than the coverage is," Calhoun recalled. "So we really ramped it up."

Last year Westword hired a part-time marijuana critic who goes by the pseudonym William Breathes. The paper insists on keeping his identity a secret.

Breathes, 29, a graduate student who was a reporter for a daily paper in the Denver area before being laid off, proudly claims to be a living, breathing (and smoking) example of the economic benefits of medical marijuana.

"It's created journalism jobs -- well, at least one," Breathes said.

His work, published in Westword's "Mile Highs and Lows" column, now includes more than just smoking marijuana, which he said he uses medically for chronic stomach problems. He also reports on services, like a video chat forum for marijuana smokers who want company when they light up, and he blogs about marijuana-related news.

The explosive growth of the medical marijuana business has some worried about the ultimate buzz kill: that the bubble is about to burst.

In Colorado Springs, where liberal marijuana policy has run head on into the city's active community of social conservatives, voters will decide next month on a ballot initiative that would ban medical marijuana sellers in unincorporated areas of El Paso County. In Montana the Legislature is expected to take up proposals to more strictly regulate medical marijuana distributors, including limiting the amount of the drug a patient can buy each month.

At The Missoula Independent, where medical marijuana advertising now makes up about 10 percent of the paper's revenue, there is concern that the spigot may soon tighten.

Matt Gibson, The Independent's publisher, said marijuana businesses have helped carry the paper through a rough recession.

"It's been stressful for us for several years," he said. "There's no question that they've been good for our business. And we're worried about 2011, if the state revises the statute, which it appears is all but certain."

Indeed, in the latest issue of ReLeaf, many of the ads have a fire-sale quality to them. One medical marijuana provider offers five free joints to new customers, another promises buyers a free pipe packed with marijuana and a free week of yoga, making the headline on an article a few pages later all the more foreboding: "Tightening regulations, crowded market make for dicey days."






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