Ask Our Experts: Marketing Strategies in the Legal Cannabis Industry


Q: With internet giants like Facebook and Google prohibiting cannabis advertising and messaging from their platforms, how can legal cannabis companies best market themselves?


By J.J. McCoy, Senior Managing Editor, New Frontier Data

A: While federal and state or local jurisdictions have certainly established obstacles for both THC and CBD producers to engage new audiences and customers, lucrative opportunities exist for those competitive enough to pursue them.

“It is a misconception that cannabis cannot be marketed,” explains Gary Allen, New Frontier Data’s chief operating officer, who notes that branding is fundamental to building any business, whether it be Microsoft or Coca-Cola or Levi’s. “Whatever it is that you are selling, effective marketing will always bring results.”

There is more to any successful product than just what it is, how it is packaged, its logo, or even its quality. That is as true in the legal cannabis industry as it is for breakfast cereal, he reminds. “The standard rules apply: Know your customer. Protect your brand. Spend confidently.” This is especially important in cannabis, where the legal market is not only growing explosively (seeing a 30.3% compound annual growth rate [CAGR] between 2014-2020), but is also a highly competitive space with new brands entering the market on nearly a daily basis.

It has been observed that data is the new oil; like that, the more refined it is the better and more efficiently the engine runs. Refinement is the value proposition which inspired New Frontier Data’s NXTeck data solutions platform to connect advertisers with consumers.

“In America today,” Allen notes, “98% of people have access to some form of cannabis. Finding out among those who your target consumers are is going to be your best, first move.”

NXTeck offers data insights from more than 100 million CBD consumers nationwide. In leveraging the platform, brand advertisers can utilize data points to glean valuable insights into consumer demographics, preferences, and interests to efficiently discover, identify, segment, and target potential new customers likely to adopt the brand’s lifestyle and messaging offerings.

“In understanding your consumers, get away from thinking about ‘medical’ and ‘recreational’ only,” Allen says. “While that is an important distinction, knowing why they consume, their preferences and behavior is far more valuable insight. Focus on understanding the consumer, and the preconceived notions melt away to much more easily understood, conventional marketing profiles and messaging.”

In 2019, companies spent an estimated $140 billion on search advertising globally. However, with cannabis still illegal under U.S. federal law, neither Google nor Facebook allow cannabis companies to participate in this critical consumer engagement channel. While that is an inconvenient truth for retailers’ marketing and sales efforts, Allen counters that it “just takes the lazy people out of the equation. It forces the retailer to be more sophisticated from Day 1” to communicate with customers via other channels. “If we know that we cannot be on Google or Facebook,” he says, “then it requires us to deal with recognized customers in the regulated markets.”

New Frontier Data’s research shows the vital role that online sources play in consumers learning about CBD. A little more than half (52%) of consumers learn about the products from social media, 44% from internet searches. Those were the second- and third-most popular sources behind friends and family (61%), the most common source. As such, it is critical for brands to be able to connect with consumers where they are online.

Media platforms like USA Today, Newsweek, and others sell across large advertising real estate that allows for cannabis-related marketing, and there are now hundreds of existing lifestyle sites that will accept advertising from the legal cannabis industry.

 “Technology and programmatic buying are the only ways to mass-market in this space with hyper-local capability targeting,” Allen explains, “which by definition keeps you regulatory-compliant.”

While the key to success for any marketer remains to understand what one is promoting, achieving that will rely on getting as much data as possible to know the customers being served.