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Validity and Vice: Reputation Management in Controversial Businesses

John K. • July 18, 2017

A positive reputation is essential for any business, large or small. But some businesses have greater challenges than others, requiring prudent reputation management.


On July 1, Nevada became the fifth U.S. state to allow the sale of recreational marijuana. People who are 21 and older can walk into a retail outlet, and legally purchase up to an ounce of pot.

You can already do that in Colorado, Oregon, Washington State, and Alaska. In twenty-nine other states, marijuana is legal for medical purposes.

 There’s no doubt about it: marijuana is, pardon the pun, a growth industry. In 2016, national sales reached $7 billion dollars.

Like any other business, the emerging marijuana industry wants respectability. And like other businesses that are legal but carry the potential to do harm, maintaining a good public image is essential to its survival.

Social Responsibility

One of the ways that any business, large or small, maintains a positive reputation is through Corporate Reputation Management. Another is by demonstrating social responsibility: a commitment to the shared values of the community in which it operates. This means serving the public in ways that exceed what is required by law.

Social Responsibility is more than just philanthropy. “It requires integrating concern over [a] firm’s social impacts with awareness of society’s impact on the firm’s ability to prosper,” wrote Jon Gettman. “It means managing the way a company creates value based on an understanding that addressing social values improves the competitive context in which a company operates.”

This is important for any business, but especially those involved in products and activities that, while legal, can be harmful to people or the environment. By demonstrating that they are responsible members of the business community and actively supporting the areas where they live, businesses can promote a positive public image, and reputation.


Reputation is easily the most important factor among professionals in the legal marijuana business. “Regardless of a person’s background,” wrote Mike Bologna, in Marijuana Industry News, “everyone is coveting legitimacy and clout as the opportunities continue to expand.”

From the 1936 movie Reefer Madness to modern stoner culture, marijuana has long been the very antithesis of straight-laced respectability. Yet the industry is growing up. A former Morgan Stanley Vice President who now operates his own marijuana dispensary told Business Insider he never felt good about managing hedge funds. “I feel way better about what I’m selling [now] than I did before.”

At the end of the day, money talks – and that could be the marijuana industry’s most potent reputation-builder. Projections are that legal marijuana could contribute up to $44 billion to the U.S. economy by 2020.

The Most Acceptable Drug

Alcohol, too, has a reputation problem. It has been called the world’s most socially acceptable drug. But with the increasing awareness of binge drinking, underage drinking, drunk driving, and alcoholism, there has been a measurable shift in public attitudes.

The industry is acutely aware of the need to show they are good corporate citizens who understand the potential for harm posed by their products. Advertising and product labels for beer, wine, and other spirits encourage everyone to drink responsibly.

Recycle the Dice

Most people gamble at one time or another. Whether it’s the thrill of wagering on an unknown outcome, or trying to work out the odds of winning, or just plain fun, people have always been drawn to games of chance.

But gambling, too, is strongly associated with many social problems, and casinos have had public image problems as a result. In Las Vegas, major players like Caesars Entertainment have begun focusing on environmental responsibility, beginning with the “three R’s” – reduce, reuse, and recycle. Everything from hotel room soaps to curtains, and even dice and cards, is collected by the guest room staff for repurposing; in some cases, recycled products end up in developing countries, where the need is great.

Giving Back

Giving something back to the communities in which they operate, and which make their success possible, can benefit any business, controversial or not. Possibilities include:

  • Sponsorship

Sponsoring a youth sports team is a great way of giving back to the community.

  • Volunteer

Encourage your employees to volunteer, as representatives of your business, on local projects, such as weeding public gardens, or helping out at the local animal shelter.

  • Serve on a Community Board

Find a local group that suits what your business is about, and become a member. If you like the arts, for example, see if your town as a Council for the Arts.

Help the Community, Help Yourself

A business that helps its community is also helping itself. Your small business relies on its public image; professional Corporate Reputation Management ensures that you’ve got it right.

There is a clear relationship between social responsibility, and a company’s reputation and success. Giving back to your community is a critical step. It promotes accountability, and fosters a positive reputation.