Perhaps in the past, you procured it in the shadows behind a gym, using makeshift pipes and cheap drinks, all while classic rock filled the air. But things have evolved. Today, in numerous states and growing, legitimate stores welcome you to browse pre-rolls, vaping devices, and cannabis-infused treats. Illinois alone raked in $39 million in its first month, a figure soon to be eclipsed. The recreational cannabis industry is booming, and this is just the beginning.

Ironically, the marketing of cannabis, along with its non-psychoactive counterpart CBD (touted by everyone from gas stations to online retailers as a cure-all), lags significantly behind. This is due partly to regulatory restrictions and partly to a misguided belief that the novelty of legal purchase is enough. In this article, I’m sharing insights from my years running a cannabis-focused marketing agency. I’ll provide an industry overview, highlight major marketing challenges, and analyze seven common channels through the lens of cannabis marketing:

• Paid search
• Paid social
• Programmatic advertising
• Content/SEO
• Email marketing
• SMS
• Out-of-home advertising Some are incredibly effective, some are complete disasters, and some outright ban cannabis. Today, you’ll learn where to invest your resources for maximum return while staying on the right side of the law. Let’s begin…

Cannabis marketing: A glimpse into the industry

The cannabis industry is, to put it mildly, massive.

Despite its uncertain legal status at the federal level, the legal cannabis market spans 33 states for medical use and 13 for both medical and recreational use, encompassing over 10,000 businesses. It’s experiencing explosive growth, with sales exceeding $14 billion in 2019 and projected to reach $25 billion by 2021. While cannabis has spawned countless related businesses across the country (from secure transportation to delivery services, from high-tech cultivation equipment to specialized point-of-sale systems), businesses directly involved with cannabis (“plant-touching” in industry jargon) can be categorized as follows:

Dispensaries: The cornerstones of the cannabis industry

These are the small and medium-sized businesses that form the bedrock of the American economy. Dispensaries are often locally owned and operated, working with limited marketing budgets to attract customers and drive sales. They’re like any other brick-and-mortar store, but with added regulatory hurdles and longer lines.

Dispensaries often face significant advertising challenges because most options seem prohibitively expensive or simply unavailable. As a result, they rely heavily on email and SMS to promote additional purchases and encourage repeat business. While this strategy improves customer lifetime value (CLV), it doesn’t attract new customers. Major marketing hurdles

• Building awareness
• Local SEO
• Limited advertising funds

CPG: Imagine “the White Claw of cannabis”

Just like any other industry, cannabis has its own consumer packaged goods (CPG) brands competing for shelf space and customer loyalty. While these brands are currently concentrated in mature recreational markets, their presence is expected to grow (especially as rights to established brands are sold and interstate commerce becomes a reality).

For these businesses, reaching the right audience through appropriate digital channels is crucial but challenging. Access to mainstream digital platforms is severely limited. To make matters worse, CPG brands rely on indirect or anecdotal data to assess the effectiveness of their digital campaigns aimed at driving foot traffic to dispensaries carrying their products. This forces them to be cautious spenders, relying heavily on secondary metrics (impressions, brand lift, etc.) to measure success. Most CBD brands fall under this category, but with a key difference: they can sell online, making it easier to link website visits and ad impressions to actual sales. This allows marketers to treat them like any other e-commerce client (with some FDA-specific considerations). Major marketing hurdles

• Building brand awareness
• Performance measurement
• Executing across multiple channels

Multi-state operators: The rise of cannabis giants

Finally, we have the large, often publicly traded multi-state operators (MSOs). These companies typically operate dispensaries across multiple states and often have their own in-house CPG brands. They also tend to have the most sophisticated internal marketing teams and needs.

As a result, they require intricate, compliant marketing strategies spanning multiple channels. This makes them the primary target for cross-channel campaigns (using a single creative concept across billboards, social media, print, etc.), premium digital ad placements (directly purchased from well-known publishers), and dynamic ad formats (video, connected TV, etc.). Major marketing hurdles

• Penetrating new markets during expansion
• Finding suitable platforms to invest marketing budgets
• Ensuring compliance across different state regulations

Cannabis marketing channels: The good, the bad, and the ugly

Now that we’ve explored the cannabis industry and its key players, let’s dive into how to reach your target audience. Because relying solely on the novelty of buying cannabis legally won’t last forever. Cannabis marketing is heavily regulated and scrutinized, so it’s crucial to understand where you can and cannot advertise. Here’s a breakdown of seven common channels and their suitability for the industry.

Cannabis marketing channel #1: Paid search

While paid search is highly effective for non-cannabis businesses to acquire customers (you already know this), cannabis businesses are currently prohibited from using it. Google’s advertising policy explicitly states that “ads for substances that alter mental state for the purpose of recreation or otherwise include ‘highs’” are strictly forbidden:

Which makes this incredibly intriguing:

That’s an ad for a dispensary! And a poorly targeted one at that, considering I’m in Massachusetts and being shown an ad for a dispensary in Florida. The appearance of such ads suggests potential changes in the future (at least in legal markets), but there’s been no official announcement from Google. Until then, I strongly advise against testing the waters. For dispensaries, the benefits of a functional Google My Business profile and access to customer inboxes far outweigh the risks of violating clearly stated policies.

Recommended for:

Ideally, everyone… if it were permitted. The ability to target those curious about cannabis and those ready to buy offers unparalleled creative freedom. However, I recommend focusing solely on SEO and Google My Business optimization until Google gives the green light.

Cannabis marketing channel #2: Paid social

Social media has rapidly become an indispensable tool for digital marketers to connect with their target audience, effectively replacing blogs for many businesses. Cannabis is no exception. However, major platforms mirror search engines in their ban on cannabis ads. While companies can maintain a social media presence for customer engagement, promoting cannabis through Instagram and Facebook ads is still against Facebook’s advertising policy:

Disappointing, I know. The exceptional targeting options (including age, crucial for complying with the 21+ age restriction in many states) would make Facebook and Instagram ideal platforms. Their ad formats would be perfect for brand building. Some marketers claim to have found found haxxx, but what’s possible isn’t always advisable. Like Google My Business, Facebook pages and Messenger are invaluable for customer service and unpaid engagement with potential and existing customers. Instagram, while less suited for direct promotions, is excellent for organic brand building. Sacrificing these channels for a few risky ads that might lead to online cart additions (not even guaranteed sales) is foolish.

Recommended for:

Sellers of “topical hemp” (CBD applied to the skin, not ingested) can advertise on social media without incurring Facebook’s wrath. They’ve received a cautious green light to run ads on Facebook and Instagram. However, if you sell cannabis or ingestible CBD, avoid paid promotion on Facebook for now.

Cannabis marketing channel #3: Programmatic advertising

Imagine having a real-time view of what almost everyone online is doing. Imagine selecting specific individuals to target based on their content consumption habits.

That’s the power of programmatic advertising. I’m admittedly biased, as helping cannabis brands execute programmatic ad buys is my bread and butter, but it’s one of the most effective ways to reach current and future cannabis consumers compliantly. While it might sound intimidating due to the technical jargon (DMP, VTC, SSP, DSP, etc.), programmatic is essentially digital ad buying on steroids. It began as a way to purchase unsold ad space on websites, those placements publishers couldn’t sell at premium rates were auctioned off in real-time.

This has evolved to include premium inventory and various ad formats (display, native, video, over-the-top, digital out-of-home – the list goes on). It allows agencies and brands to leverage first and third-party data to reach their ideal customers across a vast number of potential impressions. However, programmatic is largely unavailable for cannabis; major ad exchanges like Google don’t accept the category. Navigating state-level regulations is simply too much of a hassle for them. Consequently, most established agencies and ad tech companies won’t touch cannabis. Disheartening, isn’t it? Unless, of course, you have access to pre-negotiated private marketplace deals that grant access to premium media properties and over 250 million unique monthly impressions. In the past 18 months, some publishers have started opening their inventory to cannabis brands, albeit with stricter regulations than most states. The general rules:

• Avoid depicting people.
• No depictions of cannabis use.
• No health claims.
• Avoid using words like “weed,” “cannabis,” and “marijuana.”
• Focus on educational calls to action rather than pushing for immediate sales. If you can create compliant ad creatives and adhere to ever-changing state and local regulations, programmatic advertising can be a powerful tool to reach new and existing customers online.

Recommended for:

Every cannabis business with a marketing budget. Seriously. To be more specific… For dispensaries, the hyperlocal targeting capabilities are unmatched. You can even combine programmatic with email and SMS campaigns for powerful retargeting sequences. For CPG brands, the ability to define an ideal customer profile using third-party data makes it easier to drive those customers towards dispensaries carrying your products. MSOs can leverage all of the above and more, but with the added complexity of navigating varying state regulations.

Cannabis marketing channel #4: Email marketing

Email marketing is one of the most effective channels for cannabis businesses because it allows unrestricted communication (beyond obtaining consent to email, of course). Offering incentives like deals or discounts in exchange for subscribing to their email list – either during in-store purchases or through website calls to action – allows businesses to generate leads and reach both existing and potential customers. It’s also one of the few channels where product-focused creatives – those actually showing the product instead of generic stock photos – can thrive. You can even promote specific deals. Here’s an example from Curaleaf’s Arizona team:

An image like this used in a banner ad (or, god forbid, on Instagram) would get you banned. But in an email, it’s perfectly acceptable.

Recommended for:

Absolutely everyone. Every cannabis business should be utilizing email marketing. Even a simple MailChimp account is better than nothing. Since dispensaries are often required by states to have some form of customer relationship management (CRM) system, they’re already collecting the necessary contact information. No excuses.

Cannabis marketing channel #5: Content/SEO

No one understands the value of exceptional content marketing better than nexus-security. Try searching for anything PPC-related – chances are, a nexus-security blog post will be at the top of the search results. Cannabis is no different. Authoritative websites that invested early and consistently in content now dominate the landscape. For paid search, it’s nexus-security. For inbound marketing content, it’s HubSpot. For cannabis, it’s Leafly.

Trying to rank a website for general, educational cannabis-related search terms in 2020 is a futile effort. Searches for “What is a sativa?” or “Do edibles get you higher?” are dominated by established players like Leafly (think of it as the Wikipedia of weed). Building a content marketing strategy around these terms is like trying to run through quicksand. However, opportunities remain at the local level. While a dispensary like Pure Oasis might never rank for broad terms like “dispensary” or “best indica-leaning hybrid,” it can certainly rank for hyperlocal searches like “recreational dispensary boston.”

Like any local business, optimizing local SEO by creating and updating a Google My Business profile, acquiring positive reviews and backlinks, and incorporating local keywords into website metadata, copy, and URLs can be the difference between getting noticed and fading into obscurity.

Recommended for:

Dispensaries! A strong focus on local SEO should be a top priority. The growing presence of MSOs will make it slightly easier to rank for more competitive keywords, but location-specific web pages (or microsites, depending on state regulations) should still follow the best practices outlined above. CPG brands, however, will likely struggle to gain traction through content and SEO alone. Keywords like “tincture” and “preroll” are dominated by Leafly or dispensary websites optimized for local variations. These brands are better off leveraging organic social media.

Cannabis marketing channel #6: SMS

SMS advertising can be tricky due to privacy and regulatory concerns; many people hesitate to opt into receiving marketing messages via text, limiting opportunities for advertisers. But while it might seem outdated, SMS marketing – essentially “direct mail” delivered to mobile phones – is a boon for the cannabis industry.

Dispensaries can utilize SMS marketing platforms like Sprout to notify customers about new products, special offers, and ultimately encourage repeat visits. This is particularly valuable in competitive markets where customer loyalty often boils down to price. Building engagement through targeted cross-selling and upselling with personalized offers becomes crucial in a race to the bottom. Since SMS boasts an incredibly high open rate of high open-rate (around 98%), crafting concise, impactful, and personalized messages is key. There’s no better way to engage existing customers.

Recommended for:

Dispensaries, hands down. If you operate a dispensary and haven’t incorporated SMS (or its visually richer counterpart, MMS – multimedia messaging), start now. Multi-location dispensaries should carefully consider their options. MSOs can incur significant costs with SMS services that charge based on volume. Sending hundreds of thousands of messages monthly might warrant negotiating a better deal with your provider, as most are open to it.

Cannabis marketing channel #7: Out-of-home (OOH)

During a recent trip to Las Vegas to meet with some cannabis cultivators and CBD producers, I was struck not by the abundance of dispensaries, but by the sheer volume of billboards and taxi ads.

Las Vegas couldn’t be more different from Boston, where there’s a single dispensary (soon to be two) and a handful of billboards near the airport. As restrictions on out-of-home cannabis advertising (billboards, vehicle wraps, bench ads, etc.) ease, this channel is becoming increasingly effective in capturing attention and generating buzz. While regulations vary by state, most boil down to:

• No advertising near schools.
• No depictions of cannabis use.
• No depictions of actual products.
• No health claims.
• DO ensure that at least 70% of the audience is over 21 years old (and get written confirmation from your vendor).
• DO include the state’s mandatory disclaimer. These disclaimers differ. For instance, Nevada’s disclaimer is: “For use by individuals 21 years of age or older only. Keep out of reach of children. It is illegal to drive a motor vehicle while under the influence of marihuana. National Poison Control Center 1-800-222-1222.” Some states have additional educational requirements, while others outright ban OOH advertising (Michigan did until recently legalizing recreational cannabis).

Although measuring the return on investment for OOH can be challenging, successful out-of-home campaigns capture attention and resonate with the target audience, leaving a lasting impression. While not as precise as device ID or cookie-based tracking, here are some ways to gauge the effectiveness of OOH for cannabis:

• Direct response: Using a market-specific or billboard-specific vanity URL (like [brand][location].com or [yournormalurl].com/[location or promotion]) allows you to track website traffic and sign-ups originating from the ad. It also provides an opportunity to present region-specific value propositions and regulatory information.
• Additional form field: Asking website visitors how they heard about your brand can provide valuable insights. While this relies on self-reporting (you can make the field mandatory or optional), adding a simple radio button or dropdown menu to your existing forms makes it easy to collect this data.
• Flight-based: This less scientific method involves alternating periods of running and pausing OOH campaigns to observe their impact on overall results.

Recommended for:

While pricing varies greatly depending on location, duration (typically quoted in four-week blocks), and available inventory, OOH is a solid option for most cannabis businesses looking beyond digital marketing. Regardless of your specific niche within the industry, if you’re entering a market with established competitors or no existing presence, OOH is an effective way to gain visibility. It complements digital marketing efforts and can also reassure investors – always a plus in a volatile market.

Cannabis marketing: Embrace the omnichannel approach or perish

While not all channels discussed are suitable for every cannabis business or budget, I urge you to explore the options and spread your resources across multiple tactics. Relying on a single strategy for customer acquisition and marketing in a constantly evolving landscape is a recipe for disaster. Diversify! And above all else, familiarize yourself with the specific regulations governing your (or your clients’) operations. Non-compliance means facing fines and jeopardizing those who play by the rules. Don’t be that person.