Marketing in the Cannabis Industry: Considering Legality and Efficacy

Marketing in the Cannabis Industry: Considering Legality and Efficacy

It’s no secret that the cannabis space is booming. The projected growth of the global industry suggests that it will be worth $166 billion by the end of 2025. Considering this figure, cannabis can be one of the most lucrative markets for entrepreneurs. However, the industry is also rife with competition. Recent progress in legalization has meant that there are now a plethora of dispensaries and smoke shops that compete for customer loyalty and widespread brand recognition. These efforts are further complicated by the strict advertising regulations put in place because of the controversial nature of the plant and its federal illegality. However, there are still many ways that entrepreneurs in the cannabis industry can effectively market their products. Many traditional marketing strategies are equally effective for members of the cannabis space, albeit with some caveats. Cannabis businesses can effectively build their brands on social media platforms where paid advertising is disallowed. Considering this, there are many ways to market effectively and boost business in the cannabis industry.

In the past, distributors of cannabis and ancillary products have been barred from many traditional advertising avenues. However, in some legal states, this is changing. For instance, in April 2021, Colorado dispensary LivWell ran the state’s first set of televised advertisements for a marijuana business ever. Television commercials have been permissible in the state since it first legalized cannabis in 2012. However, major networks have historically rejected television advertisements from the weed industry because of social controversy and the fact that plant is federally illegal. As LivWell’s ads demonstrate, it is technically possible to advertise a cannabis-related business on television in a state where televised marketing is legal. Additionally, televised advertising for cannabis products across state lines is illegal. Therefore, entrepreneurs using this type of marketing are limited by the amount of networks that transmit locally and allow cannabis-related ads. Considering the difficulty involved in getting a commercial approved for television in the industry, this method of marketing is likely to be ineffective for the average cannabis business.

While advertisements on television are unlikely to be a viable marketing strategy for many companies, there are other methods of traditional advertising that are excellent choices for businesses that operate from an in-person location, such as dispensaries. One type of advertisement that significantly increases foot traffic is the classic billboard. Individual states have regulations regarding where billboard advertising of cannabis products may take place, and what imagery may be included. The strictness of these regulations depends on the state. For instance, Maryland strictly prohibits any public advertising of cannabis products, including radio ads, television ads, and billboards. Colorado also prohibits billboards promoting marijuana-related products. Other states are laxer about advertising on billboards. For example, Illinois permits billboards anywhere except within 1,000 feet of school grounds, playgrounds, a recreation center, child care center, public park, or library. Concerning imagery, an Illinois billboard must not encourage overconsumption of cannabis, make medical claims about the plant, depict a minor consuming cannabis, or use images (toys, cartoon character, etc.) That appeal to minors. California has similar regulations of cannabis-related billboards and prohibits billboards within 15 miles of state lines. Billboards are a particularly good option for businesses that operate from a storefront and sell directly to consumers, as billboards are a primary driver of foot traffic in many legal states. Therefore, billboards are a prudent marketing option for companies that wish to increase in-person traffic to their business.

Another type of marketing that can be beneficial for all cannabis businesses is social media. While mentions of marketing and social media might bring to mind paid ads, this is not the most effective use of social media by members of the cannabis industry. One reason for this is that most of the major platforms have policies that prohibit paid advertisements for marijuana and ancillary products, including Facebook, Instagram, Twitter, and LinkedIn. Although these platforms cannot be used to run traditional advertisements, social media can be a vital aspect of building customer loyalty and brand awareness. For instance, Facebook Messenger can be implemented to provide excellent customer service. This platform is an ideal means to build following for companies that cater to those 50 and older. Instagram is another amazing tool for optimizing connection with one’s target audience and enticing viewers with aesthetically appealing photographic and video content. Instagram is also an excellent platform to build brand awareness by posting education content about a company’s mission and products. Businesses in the cannabis industry can benefit from maintaining Twitter and LinkedIn accounts, as these platforms allow businesses to network and exchange ideas with industry leaders. However, there are some considerations that businesses should consider while maintaining their social media presence. For instance, Instagram prohibits businesses that sell marijuana from providing contact information on the site. Users will also want to be aware of what hashtags they are using. Hashtags that the site has temporarily or permanently banned, such as “weed” and “weedstagram”, may cause the account to be hidden from users that do not already follow it. However, despite these restrictions, Instagram is the ideal place for many businesses to reach their target audience, as it is one of the most popular social media platforms for young adults.

Another type of marketing that can boost sales for businesses in the cannabis industry is e-mail and SMS advertisement. These marketing tactics keep the company using them fresh in the consumer’s mind even when they are not engaging with the brand’s visual ads or social media presence. Email is one of the most effective means of marketing in the industry, as there are few to no restrictions regarding the content of these documents. For example, while many ads require a company to avoid depicting cannabis, ancillary products, or consumption, these restrictions do not apply to e-mails. Sending regular e-mails to consumers can have a positive effect on return business. Organizations can create an incentive for customers to join the company’s e-mail list by offering a small discount or deal to those who subscribe. Another benefit of e-mail advertising is that businesses with creative personnel can distribute this content at no additional cost. Companies should include opt-out instructions for consumers who do not wish to receive further e-mails in the document, under the CAN-SPAM act of 2003.

SMS is another good option for companies in the industry that want to augment return business, particularly dispensaries. Companies can use SMS marketing tools to inform consumers about new products, sales, and communicate the benefits of being a repeat customer. This method is particularly valuable for companies that wish to distinguish themselves from competition, as it allows businesses to inform readers about the benefits of being a return customer concisely. In order to comply with laws regarding text advertisement, businesses must not send texts to consumers who have not explicitly communicated their consent to receive messages. This includes sending texts requesting that customers opt-in. While requesting that consumers opt into SMS lists, companies must inform them regarding the frequency and content of messages. Businesses also must provide detailed instructions regarding how to opt out.

Marketing in the cannabis industry has historically been an immensely challenging aspect of working in the field. However, as legalization increases and cannabis becomes more widely accepted socially, marketing one’s marijuana-related brand is easier than ever. Many traditional means of advertising, such as television commercials, are still unavailable to the vast majority of organizations in the industry. Others, such as billboards, are becoming increasingly popular options for businesses who wish to increase foot traffic in states where they are legal. Perhaps one of the most important marketing tactics for cannabis businesses is social media. Paid ads for cannabis and ancillary products are banned on a majority of platforms. This does not mean, however, that social media is not vital to building a strong brand in the industry. Platforms such as Facebook Messenger can be a boon to customer service efforts, while Instagram offers an opportunity to raise awareness of a brand and connect with one’s audience. Twitter and LinkedIn are also suitable tools for networking within the industry. Other advertising formats, such as e-mail and SMS, increase chances of repeat business from individual consumers. Marketing in the cannabis industry is doubtlessly more complex than advertising in other fields. However, this by no means implies a lack of opportunities for businesses to get creative with advertising and grow their brand in today’s industry.

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