The Challenges Of Marketing A Marijuana Dispensary In The USA

Marketing a marijuana dispensary is challenging. Here’s how digital marketing can help.

Marijuana legalization sweeping across the USA

With a majority of Americans now in favour of legalizing marijuana (1), and despite the fact that marijuana is still illegal under federal law (2), marijuana legalization is gradually sweeping across the United States of America.

Chart courtesy of Vox.com

As a matter of fact, as of January 2019, ten states and Washington DC had legalized marijuana for recreational use, for adults over twenty-one years of age. In total, thirty-three states had legalized marijuana for medical use (3).

The legal cannabis market is expected to reach a value of USD 146.4 billion by end of 2025, according to a new report by Grand View Research, Inc (4). The business opportunity is huge and the term “Green Rush” (alluding to the famous “Gold Rush” of the mid-1800s) is feverishly tossed around in investment circles.

More marijuana dispensaries = increased competition

With the aim of capturing a share of the multi-billion-dollar cannabis industry, a growing number of new marijuana dispensaries are piling into the budding market and setting up shop. But whilst the opening of new dispensaries means more choice for recreational and medical users alike, the flip side of the coin is increased competition for marijuana dispensary owners.

According to Statista, back in May 2017 there were already over 1700 marijuana dispensaries spread across the USA. This figure is likely to have risen since – further cranking up the competitive intensity between the different players in the market.

With all of the above in mind, it’s now more important than ever for marijuana dispensary owners to market their businesses correctly in order to stand out from the crowd. But what does marijuana dispensary marketing look like in 2019?

Marketing a marijuana dispensary is complicated

Whilst marketing any business represents a significant challenge, marketing a marijuana business in the USA in 2019 is further complicated by the fact that the plant is still classed as a Schedule 1 Drug by the Federal Government.

This also holds true for other aspects of running a marijuana dispensary, such as opening a bank account, securing financing or obtaining business insurance for example. Many things which would seem straightforward for a business owner in almost any other industry can be unnecessarily testing for marijuana business owners.

Furthermore, as a direct consequence of the federal illegality of marijuana, most mainstream media corporations are refusing to advertise or promote cannabis-related businesses on their TV networks, in their publications or in their radio broadcasts for example.

Indeed – due to the intricacies of US law and the relationship between state laws and federal laws – the advertising of cannabis-related businesses exclusively in states where cannabis is legal could still potentially expose media networks which operate countrywide (including in states where cannabis is still illegal) to sanctions under federal law.

Take a look at Google or Facebook for instance. Neither of the internet giants allow for PPC (Pay Per Click) or display advertising of marijuana businesses on their respective advertising networks.

A more recent example which highlights how sensitive and difficult the advertising of cannabis still is, is perhaps CBS’ refusal to air a commercial for Acreage Holdings – a US-based cannabis firm – during the Super Bowl.

The Acreage Holdings Ad Rejected By CBS For Airing During Super Bowl

When you think of it, how often have you seen an advert for a marijuana dispensary on national TV or in a national newspaper or magazine? How often have you been exposed to a sponsored listing for a dispensary in a search engine results page? How often have you seen a sponsored display ad for a marijuana dispensary whilst browsing on Facebook? The chances are that the answer is NEVER.

It’s perhaps ironical that one of the consequences of CBS turning down the advert was the huge media exposure which both companies received in the aftermath. Some might even argue that this was the plan all along! As the saying goes: “All publicity is good publicity, as long as they spell your name right.”

Beyond the law itself, there’s also the fact that cannabis poses a significant threat to several multi-billion-dollar industries with powerful lobbies.

On the one hand, pharmaceutical companies have a lot to lose if people shift away from their drugs and move towards medical marijuana. It’s in the interest of pharmaceutical manufacturers to delay mainstream adoption of medical cannabis, whilst they continue to make money on the drugs they have developed whilst simultaneously making investments in the medical cannabis industry – which they will likely aim to control. Until then, keeping cannabis out of sight (and out of mind) is one of their priorities. To achieve this goal, they use their influence and financial might to lobby politicians and fellow friends in the media to keep their competition in the shadows.

On the other hand, the tobacco and alcohol industries are under existential threat by the growing popularity of recreational cannabis. Indeed, as cannabis is increasingly seen as a healthier alternative to both drinking alcohol and smoking cigarettes, they will have to compete with cannabis companies for the consumer’s dollar. As is the case with the pharmaceutical industry, it’s in the interest of alcohol and tobacco companies to keep cannabis on a leash and make it as hard as possible to advertise, sell and consume – until they are ready to enter the market with their own products that is.

Digital marketing: an opportunity for marijuana dispensaries

Despite the complications, if you’re a dispensary owner don’t lose hope! Don’t let tight and complex regulations, increasing competition, anti-cannabis lobbying or the lack of advertising options curb your enthusiasm!

With the wide array of digital marketing tools available to business owners in 2019, even marijuana dispensaries have an opportunity to circumnavigate the obstacles and reach out to their target customers.

As a matter of fact, bringing your cannabis business to the world has never been simpler, more effective or more affordable. Furthermore, your ability to precisely measure and constantly improve your ROI (return on investment) will be greatly improved with the adoption of digital marketing tools.

Whilst traditional advertising media – such as TV, press, radio or billboard still have a certain role to play – the fact is that most of these industries haven’t kept up with the times. Also, all of these media channels have in common the fact that they require their clients to obtain their permission before an advertisement can be placed. The media corporations get to decide who and who cannot gain access to their services. They are in essence gatekeepers, preventing cannabis businesses from broadcasting their messages to the population.

The beauty of the internet is that it has enabled businesses to connect directly with their customers -without having to obtain anybody’s permission! And, even if paying for increased exposure via PPC or Display Advertising is still more difficult for cannabis businesses, there is a plethora of other tools and channels which they can leverage to their benefit.

Amongst these, the most common are Search Engine Optimization, Social Media Marketing or Email Marketing for example. And the good news is that most of them can be done on a shoestring and will yield long term results.

Search Engine Optimisation or how to win BIG on a small budget

Search Engine Optimization (or SEO), is a process of maximizing the number of visitors to a website by aiming to appear as high as possible in the search engine results page (or SERP) for given keywords (words you want to rank for).

If you are the owner of a dispensary, or if you are responsible for the marketing function thereof, one of the first things you should focus your attention on is your dispensary SEO.

SEO aims to increase organic traffic (i.e. non-paid or FREE traffic) to your website by increasing the likelihood that somebody who is searching for certain products or services in a search engine (such as a dispensary in their local area for example) sees and clicks on the link to your website.

It has been proven that the likelihood that the link is clicked on increases with the position (or ranking) of that link in the search engine results page. The higher you rank for a given keyword, the higher the chances are that somebody searching for that keyword in a search engine will click on the link associated with your result over the link of a competing result listed below yours.

Different studies have put the traffic share of clicks received by the first result in the SERP at around 33%, with the second result getting around 15% of clicks, 9% going to number the third result, and steeper drop-offs after number result 5. At minimum, 75% of clicks go to the first page of search results (6).

Therefore, the aim of a SEO strategy in general, and of a dispensary SEO strategy in particular, is to identify which keywords your target audience is likely to search for, chose which ones you want to rank for, and then focus on ensuring that you rank as high as possible for those given keywords in the SERP.

Without going into the detail of what goes into an SEO strategy, it revolves around 3 pillars.

  1. Technical Optimization (making sure your site has clean code and loads rapidly for example)
  2. On-Page Optimization (making sure that your content targets the keywords you want to rank for, that it is unique, well-structured and well-written and that there’s a balance of text and image, for example).
  3. Off-Page Optimization (this pertains mainly to the links elsewhere on the web which point back towards your site, aka backlinks).

The beauty of SEO is that it is relatively cheap to implement but it does require an understanding of the principles involved, as well as the allocation of time and resources. It’s also a technique which requires patience as your efforts may not pay-off immediately. It can take time for search engines to take into account the changes you might have made to improve your site, the new content you might have published or the new backlinks which you might have gained.

However, if you get your SEO strategy right, your dispensary’s website can see a dramatic rise in organic traffic with a potential knock on effect on inquiries, visits, sales etc.

For further information, we would recommend that you visit a site such as Dispensaryzen.com for example, which regularly publishes content on how to improve the marketing of your dispensary in general, and your dispensary SEO in particular.

Sources:

(1) https://www.vox.com/identities/2018/8/20/17938352/marijuana-legalization-public-support-polls


(2) https://en.wikipedia.org/wiki/Cannabis_in_the_United_States


(3) https://www.businessinsider.com/legal-marijuana-states-2018-1?r=US&IR=T


(4) https://www.grandviewresearch.com/press-release/global-legal-marijuana-market


(5) https://www.statista.com/statistics/754751/medical-marijuana-dispensaries-number-by-state/


(6) https://www.searchenginepeople.com/blog/page-one-whats-google-rank-worth.html

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