By Charles Roques
In the early days of rock-and-roll, annoying AM radio disc jockeys would talk during the instrumental beginning and ending of songs. Sometimes it was just patter to promote the record, but it was usually opportunistic advertising to broadcast as many ads as possible.
Another practice was to repeat hit songs throughout the day, so songs you might have liked would eventually become played out. They appeared to be repeated out of demand, but the real reason was payola—DJs accepting money or gifts for spinning particular songs more frequently. It was usually given by record company insiders or agents representing artists, in an attempt to pump sales, but it had become so widespread by 1960 that Congress amended the Federal Communications Act to outlaw payola and require broadcasters to disclose all pay-for-play deals.
As a result, the 1960s and 70s saw an upheaval in rock music broadcasting—the rise of FM stations as alternatives to the payola-driven AM formats. Programs began to play more of an album’s tracks, not solely focusing on the hits. Some listeners would become more interested in a group’s body of work and wanted to hear more. If you were exploring the musical tastes of that time by only listening to the biggest-selling Top 40 hits, you would have a limited picture of the time’s real musical innovation.
Unfortunately, the OTC cannabis sector shares some of these unsavory practices from rock-and-roll’s early days and has its own form of payola. Promotors are paid to speak positively, and an agreed number of times, about specific companies on industry-related websites. These promotions, known as pumps, are usually written under the guise of analysis. While they may possibly hold some truth, they are laden with favorable forecasting, regardless of actual performance.
Hearing a song over and over again might have little to do with its popularity, and you could say the same for a cannabis company replaying press with exhausted information. Are such releases replayed for legitimate newsworthiness or saturation marketing? Companies that constantly distribute press releases repeating superficial information may have other issues or hidden debt, creating pressure to generate cash flow.
You may not be able to see behind the scenes of OTC companies, so they may appear interesting, but repeated promotion could be a red flag, especially if they are not giving you a clear picture of operations or progress. Do these types of press releases start to sound like an overplayed hit? They may still seem like good companies, but they could have unreported financial shortcomings or debt. In an attempt to shift attention away from this, they may overemphasize the positive.
Is this promotional chatter preventing you from hearing the entire song? Is the company pleasing its insiders or its shareholders? Are important facts obscured? If a company finds the need to constantly remind you about its one hit, instead of offering any new ones, then maybe it is a one-hit wonder. Stronger companies likely don’t need to hawk their wares relentlessly. Some may release few updates and others may issue them on a regular basis. If you’re not clear on a company’s operations, investigate more and don’t confuse hype for substance.
There are exceptions in this unpredictable sector, but well-run companies tend to balance out their publicity with legitimate development, preventing publicity overkill. If you don’t know anything about a company except its name from multiple in-house press releases, your knowledge is unbalanced.
These are the early days of a nascent industry, like rock radio’s emergence in the 1950s. There are several opportunities to create and promote new companies, but there are also plenty of opportunities for scams and “pot payola.”
Do some research and track companies so you can understand their progress. Like other issues in the sector, one fault may not mean the company is doomed or mishandled, but make note of things that seem out of proportion, both positive and negative. Don’t let the hype distract you from the truth. If you still can’t hear the entire song, it may be time to change the station.