Local Advertising: How to Market Your Dispensary or Cannabis Business
Sol Fayerman
February 6, 2020

New businesses that operate in highly-regulated industries generally feel the burn when it comes to advertising and marketing. Online and social media advertising are cost-effective ways for legal businesses to reach a broader and more targeted audience. But for those that work within the cannabis industry, efficient tools like Google, Facebook, Twitter, and YouTube are of little help, as they all have restrictive ad policies that prohibit cannabis-related advertising from running on their platforms. 

Geo-targeted advertising is a modern-day, helpful solution that may be able to help with these issues if used correctly. 

More than one cannabis entrepreneur has had their pages and profiles closed without notice after trying to place ads on Facebook and Instagram. There are constant shut-downs of cannabis brand accounts, some of which are due to the social media platforms’ initiative, but some are the result of competitor businesses whistle-blowing content as a violation of the networks’ policy.

The grey area of cannabis promotion

In Canada, cannabis is now legalized for recreational use, which opened the floodgates for hundreds of dispensaries and other cannabis-related businesses, but with legalization came regulations, and the Cannabis Act Promotion Prohibitions has set out how entrepreneurs are able to market their products and spread the word about their services. These regulations, enforced by Health Canada, are much like the ones used for tobacco marketing,  

In the US, however, cannabis is still an illegal Schedule 1 substance at a federal level, but 11 states have made recreational cannabis legal, which makes marketing cannabis businesses even more complex. Most states with legal cannabis laws have adopted existing alcohol advertising guidelines that work, among other things, to limit exposing children to advertisements for controlled substances. 

These guidelines include no advertising on websites, television, radio programs, or print publications where more than 30 percent of the audience is under the age of 21. Advertising in states that have not legalized cannabis is still banned, and US cannabis businesses are generally forbidden from advertising across state lines, even if cannabis is legal across the state border. This has led cannabis businesses to pursue novel ideas for advertising within the guidelines.

Geo-targeting is a must for cannabis businesses

Due to the aforementioned regulations in Canada and in the US, geo-targeting your campaigns is a must in order to achieve compliance. Especially businesses that are looking to reach local markets and the right audience to attract new customers and drive revenue must geo-target.

Traditionally, cannabis businesses have been compelled to pay steep premiums to advertise on popular websites like Leafly or Weedmaps. For a long time, such websites were basically the only platforms available to cannabis entrepreneurs to help them grow.

Geo-targeting as a limiting factor?

Limiting your advertising audience to a specific state puts a big damper on your possible reach before you even start, but it is a crucial part of reaching the right audience without breaking the law. 

Geo-targeting itself is not a new concept and marketers have been using the technology for years to find a specific audience. The real problem for a dispensary in California, for example, to reach only Californians above the age of 21, is finding a platform that can offer geo-targeting at a meaningful scale.

Get the most impact out of your cannabis-related marketing campaign

Creating a geo-targeted ad campaign is the solution, but what should you be looking at when planning and how can you gauge its success? Being able to quantify metrics in a way that is meaningful will help cannabis businesses leverage ads and grow their market share. The following are questions you need to keep in mind when starting an advertising campaign with a publisher.

How many visitors does the site or app get?

When starting a campaign through an app or a website, it is essential to look at the story behind the data, as each of these stories is unique. Don’t be tricked by how many overall visitors a content asset claims to reach. Many publishers inflate their numbers and reach alone doesn’t give you a sense of the scope of the seller’s service. Ask for clear numbers but be aware that most publishers will be very reluctant or refuse to make their data available.

How many unique visitors do you reach in the target market?

Make sure to ask about the unique reach your ad seller has in the market you want to target. Ask about clear numbers so you fully understand the number of unique visitors that you can reach in your target market. The more users a service can reach in your local market, the more valuable that publisher is to you.

The spend: what is the average cost-per-click for the campaign? 

Now that you know how many potential customers you can reach, it’s time to estimate how to budget your campaign. Regardless of the size of your budget, as a marketer, you be able to gauge your cost-per-click (CPC) or pay-per-click (PPC) average per campaign as this could make or break a campaign.

The majority of digital marketing campaigns are sold on a cost-per-click (CPC), cost-per-1,000-impressions (CPM), or cost-per-1,000-viewable-impressions (vCPM) basis. Other publishers also sell on a fixed monthly or quarterly schedule. This can make it easier to budget but makes it impossible to gauge your results. Be sure you understand the rates of different sellers and chose the one that best fits your budget and campaign targets.

Friendly competition: are my competitors targeting the same audience?

Finally, it’s crucial to know if your competitors are targeting the same audience. In the US, in Colorado, for example, it’s safe to say that there is a lot of competition among the budding cannabis industry. If you are closing deals with single websites, this is even more important. 

For example, you might be dealing with a publisher that reaches 1 million users and offers only one ad placement. That means every advertiser that bought ad-space on this publication is competing for the same 1 million users. If that same publisher is working with 10 advertisers, your potential reach is only 10% of their entire userbase.

The Takeaway

The cannabis industry is growing by the day, but only those brands that have a detailed marketing strategy in place will survive long-term. It’s important to pay attention to new marketing trends, methods, and technologies that could give you a major edge over the competition. Geo-targeting your campaigns will not only ensure you stay compliant with local regulations, but also let you reach the right customers and grow your business.

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