Top 5 Marketing Challenges in the Cannabis Industry

If you are reading this article, you no doubt have experienced some, if not all of the marketing challenges we will outline. The key is to know how to supplement or avoid these pitfalls so that you can move your business forward and experience the success that is available to you.

Let’s first state the challenges, and then later address them one at a time and see how you can combat them;

1.     Differentiating Your Business – More and more states are legalizing recreational cannabis to go along with the many that are already approved for medicinal cannabis. With this new legalization comes LOTS of competition. If you were one of the early dispensaries, although you had a head start, many more locations are most likely opening around you. Many states have regulations in place that limit the distance between dispensaries, but even still if you are a dispensary and you have 5 or 6 others within a 2-mile radius of you, how do you keep folks faithful to you and coming to your shop rather than just going to the place with the best deals? So how do you stand out and make yourself different so that you can establish a uniqueness and a following?

2.     Compliance Woes – Every state is different, so I obviously encourage you to get familiar with the advertising laws in your particular state, but there are many laws that are a hindrance to your marketing efforts.

Some examples across multiple states;

a.     Cannot use cartoons or anything that is appealing to children in your advertising message.

b.     Cannot promote price or an “exclusive’ deal that is not available to the masses

c.      Cannot use spokesmen like celebrities or athletes or their endorsements

d.     Cannot use an animal as a ‘spokesperson’

e.     Must provide a disclaimer of the intoxication effects and age restrictions and more on any piece of advertising.

These are just some of the restrictions that can be a challenge for you as you try to get the word out and spread the message of your dispensaries to the masses.

3.      Email Marketing – Some of the mainstream email marketing platforms like Constant Contact and MailChimp for example, make it hard to email market to your customers as many dispensaries are getting their access shut down because they are breaking the policy rules of those sites. To avoid being shut down by these apps, some dispensary marketers are creating ‘watered down’ email pieces that don’t have the impact they need to drive success. With email open rates already hovering around 15%-18%, being able to market with words and pictures that will entice folks to open the email is even more important than ever, and limiting your ability to use these words and pictures is hurting marketing efforts.

4.     Social Media Marketing – Social media is the quickest way to get the word out and has the greatest following when it comes to your customers and the eyeballs you covet. Instagram particularly has become the playground for consumers, with Twitter and Facebook not too far behind. The problem is if your message is deemed to be too ‘illegal drug’ focused, even though you are in a LEGAL state, the policies of these social media giants prohibits you from advertising and your ability to advertise is shut down. You then will most likely need to write a letter where they will review your specific case, MAYBEturn you back on, but in our experience,  you will have your marketing ability shut down again and in most cases for good. Very frustrating!

5.     Data Management Across Disparate Platforms – Within the cannabis industry there are multiple software platforms that are used to advance your business. Depending on the size of your operation, you could be using some, if not combinations of all of what’s out there. From point-of-sale platforms such as Green Bits, Flowhub, MJ Freeway, Leaflogix and many more, to texting platforms used to capture data of your customers, as well as online menu software, perhaps seed-to-sale software, contact management software and more. Having a single system of record is imperative to making your life as a marketer easier. Having one place where all this data flows and can be used for marketing efforts sure would make life easier.

Now that we know the challenges, let’s explore the options to overcome these and present ways to maximize your marketing efforts. When we think of differentiating our business, in simplest terms it’s how to make yourself LOOK different. Making yourself STAND-OUTfrom the crowd. Utilizing an MMS (multi-media messaging) texting platform that allows you to use your logo and lets you promote your brand is a great first step. After acquiring opt-in approval from your customers, these platforms allow you to reach back out to them at a frequency of your choosing with branded messages of promotions, deals and general information to entice them to come back. Knowing that there is more competition, and other shops may be doing the same is no longer an obstacle as you are now using your brand and your uniqueness to market to these folks. This creates the differentiation that is critical in separating you from the crowd!

With each state’s laws being so different, having a deep knowledge of the compliance in your state is critical. In Washington State for instance, each and every piece of advertising must come with a disclaimer stating everything from the intoxicating effects of cannabis to age restrictions. If you are using a text provider to market, then it can get expensive as these disclaimers usually take anywhere from 200-240 characters. Most standard messaging services (SMS) only allow for 160-characters per text and charge overages thereafter. So the expenses can add up quickly. Platforms that provide for MMS texting allow you to add the disclaimer to a picture, thus avoiding the overage expenses on limited characters, as MMS messages are variably unlimited in character length for a fixed cost. Further, with so many restrictions in how you can advertise, using MMS and your logo or announcements of new brands or products will keep you ‘disclaimer’ compliant and let you market your product more efficiently.

As previously mentioned, email marketing platforms as well as most phone carriers have guidelines in place that prohibit the marketing of ‘illegal drugs’ even though your state has legalized cannabis. Finding an email marketing platform that is ‘cannabis friendly’ will help avoid your marketing being shut down for violating usage rules. Avoiding Constant Contact and MailChimp early, will help you avoid the headache later of trying to isolate a new email provider. As mentioned previously, open rates on email is low and getting lower every year. Having an ability to convert your email members to text members is a good initiative to undertake. 98% open beats 15% open every time! Doing away with email completely in our opinion isn’t the answer, as older customers may still have flip phones and access email regularly. But having a platform that one, won’t shut you off and two; allows you to transition folks to text is highly beneficial.

“While social media marketing is mainly a fight for eyeballs and people you THINK may have interest in what you are promoting, text messaging to an all opt-in crowd who have expressed what they want to see lets you market to those you KNOW are interested in what you are selling!”

With social media watching advertisers like a hawk, dispensaries need an alternative to marketing their brand and the easiest and most efficient way is through text marketing. Text marketing drives your message to those who have expressed not only consent but also a desire to receive messages from you. Using social media to post and stay relevant and gain a following should NEVER be abandoned, but your ability to use PAID advertising on these sites will always be difficult until they change their policies. Grabbing your patients or Customers approval to market to them through a platform captures their consent, and in many cases their preferences so you can market to them with the message they want to see. While social media marketing is mainly a fight for eyeballs and people you THINK may have interest in what you are promoting, text messaging to an all opt-in crowd who have expressed what they want to see lets you market to those you KNOW are interested in what you are selling!

Now let’s focus on the many platforms you are using and how you are managing your data. It can be a daunting task trying to make any semblance of reason of your data when it is populated in several disparate software platforms. Having a single system of record surely would make life easier. Utilizing a platform that can not only house all contact data, but also integrate with the multiple platforms you are using will lead to you being able to grab the info you need without doing multiple exports from several different platforms. This will allow you to not only see your customer’s demographic information within a single source, but also see things like loyalty points earned, purchase activity, preferred product choice, birthday information and more.

The solution to all your marketing challenges is out there. We would welcome an opportunity to speak with you and see how Sprout may be able to maximize your marketing efforts all within our All-In-One Marketing Platform specifically for the Cannabis Industry.

Sprout is the leading CRM and marketing software platform for the cannabis industry. We help cannabis companies increase revenues and profit margins by engaging their customers, creating brand awareness and driving online and in-store orders.

We have spent over a decade building enterprise CRM & marketing software platform designed specifically for:

  • Cultivators & Vertically Integrated Cannabis Operators

  • Retailers & Dispensaries (cannabis, hydroponic stores, CBD retailers, etc.)

  • Cannabis Distributors

  • CPG & Cannabis Brands

Many of the largest, fastest growing vertically integrated cannabis operators and brands have switched over to Sprout. With a combination of Multi-Media Messaging (MMS), Standard Messaging (SMS), Mobile Coupons, Mobile Surveys and Email Marketing, Sprout is the all-in-one solution for your business. With Sprout, you will ACQUIRE new customers, RETAIN the ones you have and overall GROW your business through a combination of outreach, loyalty and pinpoint marketing.

2019-08-19T15:43:00+00:00July 1st, 2019|Categories: Uncategorized|0 Comments

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