As medical and recreational cannabis use becomes legal throughout the United States, competition in the marketplace is growing at a rapid pace, with the legal marijuana market expected to reach $146.4 billion by the end of 2025. Producers of all sizes are in a race to grab their piece of this new economy. And, just like any growing business sector, brands are looking for ways to get in front of their target customers. However, the cannabis industry faces unique challenges when it comes to cannabis marketing, with 80% of the advertising world unavailable to them through strict regulation.

With marketing roadblocks and an uncertain regulatory and legislative landscape, cannabis producers and dispensaries are looking to experts to help them connect with and educate consumers. We spoke with cannabis marketing expert Jenelle Brooker, Director of Client Strategy at USA TODAY NETWORK | LOCALiQ, about the rapidly evolving landscape of cannabis marketing ““ she offers much needed insight and guidance about where to start to find success.

What are the opportunities right now in the cannabis space?

State laws are changing rapidly as state legislative bodies see the positive economic impact legalized cannabis can have. In fact, the U.S. marijuana industry has created an estimated 100,000 to 150,000 new jobs nationwide, while additional studies suggest that legalized marijuana in all states would result in about $3.1 billion in tax revenue annually.

With legalized sales of cannabis increasing more than 20% year over year and more use-cases emerging, there is an incredible opportunity for the companies involved in the space. Companies like Curaleaf, Medmen, Harvest Inc., and others are focused on acquiring dispensaries all over the country. As with any emerging industry, loyalty is not always set ““ we’ve found that most users are not yet loyal to a specific dispensary or brand. In fact, according to a recent study my team conducted ““ 67% of cannabis users have shopped at two or more dispensaries in the past three months. A quarter have shopped at four or more. The early industry leaders have an opportunity to establish their brand identity to develop the customer loyalty that the industry is lacking.

cannabis marketing stat - localiq

What are some of the key challenges cannabis businesses are facing in growing their business or brand?

Regulatory and legal challenges continue to plague the cannabis industry. The U.S. remains a highly complicated space for cannabis companies and investors largely because cannabis remains illegal at the federal level. Additionally, each state has varying degrees of legalization ““ all with their own regulatory hoops to jump through. For cannabis companies looking to expand into the U.S. market, it’s not easy to simply set up shop in a state which has legalized cannabis. Companies are forced to deal with a myriad of legal and financial challenges.

As part of these greater regulatory challenges, we continue to hear from our customers that obtaining dispensary permits is one of the toughest challenges they face. It is often time consuming and expensive. Because each state has different requirements, it can become a monumental path to open just one dispensary location.

Even when a business is able to open a dispensary, they face even greater headwind: cannabis marketing.

Are there core demographics or audiences that cannabis businesses should focus on?

An often-referenced categorization is by BDS Analytics, with three key audiences within the cannabis space:

  • Acceptors: Consumers who support the legalization of Marijuana but are not currently using.
  • Rejectors: Generally anti-cannabis, do not use the drug, and do not want to see it legalized.
  • Consumers: Cannabis users ““ either for lifestyle or medicinal purposes.

What’s exciting is that in the national survey that my team and I are finishing across 21 markets reaching 8,000 customers, we found that there are two emerging audiences that fall under the “acceptor” and the “consumer” umbrella.

The first is Affluent Families ““ affluent health-conscious consumers age 35+ with children in their home looking for a healthier alternative to alcohol to relax at the end of the day.

The second is Baby Boomers ““ older adults looking for a natural alternative to traditional medicine and opioids. Trends are showing that, as cannabis becomes better understood and joins the mainstream, users of all ages are finding benefits in the treatment and management of a variety of health issues, including anxiety, pain management, stress relief, improved mood, and insomnia.

What is your key advice for brands looking to improve their cannabis marketing efforts?

Our initial research findings are revealing gaps in the consumer journey that provide cannabis marketers with an opportunity to drive brand choice. There is a knowledge gap among acceptors that is preventing them from becoming a consumer. Position your brand as a cannabis authority through educational content that shares the benefits of cannabis ““ both dispelling common misperceptions and instilling confidence. Consumers want to connect with brands on an emotional level. Humanize your brand and connect with users and potential users by showcasing relatable success stories from your everyday customer.

A cannabis user cannot be defined by one single demographic composition, but there are key lifestyle traits that appeal to this persona. At the end of the day, your cannabis marketing efforts must start by establishing your brand’s unique story. Once you identify what you want your brand to stand for, you can determine how these pieces fit into your over-arching brand strategy.

We’ll share more as we finalize the survey report. We are looking forward to seeing all the data.

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