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The Ins and Outs of Cannabis Advertising Today

The cannabis industry has seen explosive growth in recent years fueled by a wave of expanded legislative conditions and evolving consumer perceptions. Today, 18 states have legalized adult use while 38 now have medical marijuana laws. Last year, legal sales hit $25 billion according to estimates by analysts at Cowen, a number they predict will rise to $100 billion within the decade. We are also seeing various meaningful market-based progress in terms of shifting investment narratives, an ever-increasing global expansion of the supply chain, and premium publishers opening up to cannabis advertising (including Rolling Stone and Variety).

Despite all this, though, the category continues to carry some heavy baggage, and cannabis brands still have much to do when it comes to educating both the general public and potential customers.

To dissect all of that and more, Sam Hollander—the Chief Digital Officer at cannabis-focused company Enlighten—recently joined host Noor Naseer on our AdTech Unfiltered podcast series. Their discussion touched upon every aspect of the cannabis marketing landscape as it currently stands. Here are seven of Sam’s best insights:

(Answers have been edited for clarity.)

On The Steps Cannabis Brands Must Take Pre-Campaign:

“If you are a new brand entering the market, you need to start with brand ownership. You need to put in the time to research and identify who your audience is, and whom you’re talking to.

There are several different ways to go about that:

“There are the traditional mechanisms of talking to your current and existing clients when they’re in the store or they’re checking out online. And then there’s also using other data providers, geo location tools, visitation tools, and historical purchase analysis to better understand where your product niche is and who the audience is that you’re targeting. Once you’ve done that, it’s about formulating your messaging around that so that you can better target those individuals.”

On Dispelling Some Common Cannabis Industry Myths

“It is a completely false misconception that people who smoke cannabis are lazy stoners. In fact, in August of 2021, there was a study done by an e-commerce company in the cannabis space called Dutchie that shows the majority of cannabis consumers are actually very successful, motivated, and health-conscious adults. There was another article by Insider, also last year, about a group of Peloton superfans who would like to smoke cannabis before they cycle.

“There is a myriad of different audience segments that are starting to come to the forefront in the industry. Gen Z was the largest growth segment last year—127% in terms of sales. Millennials grew 46% and Gen X grew 29%. And then additionally, women are becoming increasingly interested in consuming cannabis. About 35% of cannabis consumers are now female.”

On The Importance of Consumer Education:

“Education is a major, major piece for cannabis advertisers. It aids in providing a platform for potential consumers to learn about the benefits of the cannabis plant and what that looks like.”

“A great example of that is walking into the dispensary environment—most dispensaries are now fairly upscale retail environments that are built out with digital signage, kiosks, digital menus, and entertainment platforms. Those are all excellent opportunities for brands and retailers to use from a branding perspective, a messaging perspective, and an advertising perspective, where you can drive engagement and help visitors search and learn about different products. And bonus to that: that’s a great opportunity for a retailer slash brand to actually capture some consumer information. And by capturing that consumer information, bam, all of a sudden you have somebody that you can turn into a loyalist.”

On The Challenges Facing Cannabis Marketers:

“Fragmentation when it comes to measurement and attribution is huge. Yes, you can track online sales via standard universal pixels and other mechanisms, but ultimately there is not a unified ecosystem or approach that provides more of that one-to-one solution for cannabis brands and advertisers.

“Another major issue, or major hurdle I should say, is the regulations. A lot of marketers in this industry hear the words ‘digital advertising’ and they automatically go to Facebook, Instagram, TikTok, Snapchat—all the big social platforms—which we all know will not take cannabis dollars. So, as a result, they automatically assume they can’t advertise cannabis digitally. That’s actually not the case. There are now numerous different outlets they can use to advertise programmatically, like Enlighten.”

On The Legislative Hurdles Unique to Cannabis Brands

“In the U.S., there is no interstate commerce. What that means is, if you have a license in a certain state, you can only operate in that state. Now, let me clarify: there are companies called multi-state operators. Multi-state operators are essentially the largest of the large cannabis companies: Curaleaf, Canopy, Holistic Industries, and PharmaCann. Those companies have individual licenses to operate vertically within that state—meaning they can distribute and, in some states, have their own brands as well as sell in a retail environment.

“It is technically illegal to cross state lines, both from a consumer perspective and from a business perspective. So, as a result, you have to operate within the confines of that state. So, if you are advertising with a multi-state operator, a lot of times you have to look at multiple sets of creative and multiple different rules or regulations and almost operate as if you’re setting up three, four, or five separate advertising campaigns.”

On The Major Ad Platforms Soon Becoming Accessible:

“I think it’s inevitable. It’s a billion-dollar industry now and a billion-dollar industry equates to a lot of marketing dollars.

“So, I do think that it will ultimately happen. It’s just a matter of when. Is that after safe banking is passed or some form of safe banking is passed? From a social perspective and a search perspective—meaning Facebook, Instagram, Google, Twitter, etc.—given everything that’s going on in the microscope that they’re under, I wouldn’t be surprised if that didn’t happen until federal legalization takes place in some way shape or form. Or the government comes out and basically says, ‘Yeah, even though we’re going after you for all this privacy stuff, we’re not going to stop you from going after cannabis dollars.’”

On The Biggest Trend to Watch in 2022:

“The industry is evolving, which I think is very exciting. I also think that more and more brands, and that includes retailers, are starting to understand the value of multi-channel advertising—that’s going to be very exciting to see the shift in evolution of what that becomes.”

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For more insights and observations into the fast-growing cannabis industry, check our Sam and Noor’s conversation on AdTech Unfiltered in full. Click here to listen to the podcast.

Want to really up your cannabis advertising game? Download our guide, Cannabis Marketing in the Roaring 2020’s. It explores a range of subjects from cannabis consumer personas to best practices for cannabis brands, and everything else in between.

Download the Guide