Member Blog: The Cannabis Crisis Plan – Business Insurance for the Future

Is Your Cannabis Business Prepared for the Unexpected?

In an industry as scrutinized as cannabis, a crisis can escalate quickly—having a solid plan in place can make all the difference.

Given its unusual balance between federal illegality and regional legality, the cannabis industry sometimes feels like it’s under a microscope.  Indeed, because of this microscope, a cannabis crisis can blow up fast. From product recalls to regulatory and legal issues, the Avaans Media team has worked with cannabis companies – and non-cannabis companies –  can face in moments of crisis. No crisis is ever “planned.” Because the very nature of a crisis is that it creeps up when you least expect it. Think it can’t happen to you? Seventy-nine percent of companies will experience a crisis with service disruption and media implications. 

A moment of crisis doesn’t even have to be the brand’s fault. Many companies have gotten caught up in social media rumors, it could have to do with police, government officials or product recalls and yet in those cases, it is the company’s crisis to handle. 

A crisis plan can be the unsung hero of an emergency. Putting a crisis plan in place may seem tedious, but a cannabis crisis is high stakes, and understanding when, who and how your company will handle a moment could save you millions in legal and PR fees, while also preserving the valuation of the brand, and the reputation in the eyes of customers, regulators, and the media. Crisis PR professionals can assess a situation quickly and guide you through this process. And a crisis plan will help you in those early critical moments. Tabletop exercises and media training are the muscle behind a crisis response.

Yet, if you find yourself in a crisis without a plan in place, there are three strategies to employ in a crisis.  

Follow the traditional process of response. 

We see this played out repeatedly, the traditional response to a crisis is to address the facts publicly, acknowledge the concern and the problem, apologize, and rectify.  This is a well-worn process, and the media are all very familiar with this process.

It’s important with this strategy to consider the methods of response and that the urgency matches the level of the crisis. Spokesperson, media format, and timing are essential elements in this strategy.

What level of response does this moment demand? If the problem hasn’t hit the media, but your customers are upset, how will you deal with that differently than if the media is calling?

The truth is always your north star. That’s particularly true during tumult. Tell the truth, stick to the facts.  If you don’t know the answer, it’s perfectly OK to say you don’t know and will return with an answer when you have one. Don’t make promises you aren’t sure you can keep. 

Where and how you issue a statement is a message. Who issues the statement? Will you issue a statement on YouTube or on Instagram. Both? Will you talk to the media at a press conference, or will you issue a written statement to the media?

Use the Crisis to Effect Change

Sometimes, a crisis can be used as an opportunity. No doubt, this is a risky choice and should be taken with sincere consideration and expertise about when and how to share the story. 

High Seas Dispensary in Costa Mesa, California did this recently when they ran into a sudden brick wall with city leaders who were withholding their city business permit.   This came a surprise to the founders of High Seas Dispensary who had always been reputable players in California cannabis. 

News coverage of the situation soon started bubbling up and the withholding was rescinded, allowing the dispensary to finally open its doors, albeit months later than planned.  

The pre-opening crisis created an early interest with cannabis media, and it helped secure coverage of its opening.  

Let The “Crisis” Die

This may be the riskiest choice of all. Because response is critical if a crisis has or will reach the media level. The first step in a crisis is to decide if it is an actual crisis and if so, what response there should be. 

Indeed, some low-level crises feel stressful in the moment, but the reality is that a public response will only fan the flames. An example of this is when things heat up with a few negative social media comments. It feels alarming, and it feels urgent, but unless those comments are part of a larger issue that should be addressed, feeding the trolls is only going to make more people aware of the situation.

Yet, a fast response may allow you the opportunity to tell your side of the story. An example of this is a cannabis recall client we worked with who called us after the story hit the TV news; there’s no going back. What’s done is done. We would have put the CEO on the news to respond which would have given the story a more well-rounded presentation and put a face to the recall, and because the CEO was highly credible, empathetic and well spoken, could have actually improved the brand reputation.  

But ignoring a crisis is a risky choice, too. We’ve all seen brands that wait days before responding to a crisis that continues to spiral out of control, at which point, the public statement feels inadequate.  This is a strategy, again, which should only be taken with a clear view of the risks. 

Think of a crisis PR plan as business insurance. A good plan can stop a crisis its tracks. Feeling prepared is the difference between panic and composure.

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