June 20, 2019 at 4:43 pm ET
Google Is Testing the Waters for CBD Ads With Trial Program, CBD Retailer Says
Chilyo, which sells cannabidiol items, says participating brands can pay to advertise — but can’t say ‘CBD’ in text
Alphabet Inc.’s Google is taking steps toward ending its prohibition on advertising for cannabidiol products through a trial program that allows select companies in the budding hemp sub-industry to purchase ads on its platform, according to one CBD retailer that was asked to participate.
Shedrack Anderson, co-founder of the CBD-infused skincare line Chilyo LP, said Thursday that Google approached him to be part of a “trial realm” of companies that could purchase advertising on the site through its Google Ads portal. He declined to say when Google made its overture or how many other CBD retailers are in the program.
Advertising on Google is currently prohibited for companies selling products containing CBD. The tech giant lists cannabidiol under its unapproved pharmaceuticals and supplements for its ad platform, so CBD brands have to rely on search engine optimization to appear higher in search engine results.
In a statement, a Google spokesperson reiterated that CBD ads are prohibited on its platform, and denied the existence of a trial program.
Under the program, Anderson said Chilyo has been able to submit ads for review for a number of Google’s platforms, from paid search to YouTube, but there are some restrictions. Advertisements for CBD can’t use the word “CBD,” for example. Anderson said Google encouraged him to use phrasing such as “full-spectrum hemp” on his all-topical products instead.
Google is also heavily monitoring Chilyo’s website, Anderson said, such as watching click-throughs. He declined to say how long the test program would run.
CBD has exploded in the U.S. marketplace: It was valued at $1.9 billion in the United States last year by the cannabis market research firm BDS Analytics and forecast to reach $20 billion by 2024. That figure balloons to $45 billion when combined with tetrahydrocannabinol (THC) products.
But there is confusion over the legality of the hemp derivative: Approved cannabidiol drugs are listed under the Drug Enforcement Administration’s list of controlled substances, even though the 2018 Farm Bill lifted the federal ban on industrial hemp.
Google is not alone in its strict policies on CBD advertising. Facebook Inc.’s Community Standards don’t mention CBD, but the company doesn’t allow for the sale of marijuana or non-medical drugs, and media reports have said that CBD advertisements have been taken down on the social media network. (Instagram, which is owned by Facebook, shares these policies). Amazon.com Inc. doesn’t allow CBD products on its site.
Google’s revenue has suffered recently, posting 17 percent year-on-year growth in the first quarter of 2019, its slowest pace since 2015. Google is expected to be the world’s largest digital ad seller this year, making up 31.1 percent of global ad spending, or $103.73 billion, according to eMarketer.
This story has been updated with a comment from Google.