Is Marketing Included in Your Medical Cannabis Dispensary Plan?

Business Plans by SIVA, Marijuana Dispensary

Many states are now considered weed-friendly in one way or another. Even so, restrictions on marijuana advertising abound. Before establishing a cannabis business, owners should take time to understand the current advertising climate toward marijuana. With industry knowledge, you can make successful (and legal!) marketing a key feature in your medical cannabis dispensary business plan.

Current Obstacles to Marketing Marijuana

1. Federal Laws Make Media Outlets Wary of Selling Pot Advertisements.
Google, newspaper publishers, and billboard operators are extremely hesitant or entirely unwilling to sell space for marijuana advertisements. That’s not too surprising, considering that federal law technically states that those who assist in selling marijuana are criminally conspiring to sell narcotics. Despite the fact that the federal Justice Department announced last August that they would not interfere with marijuana sales in states that have legalized recreational marijuana use, many advertisers are still wary of becoming involved with the “Wild West” of marijuana sales.

There are exceptions, of course. In March, Comcast began airing marijuana advertisements on late night TV. The ad spots promoted, a service that connects potential patients with doctors who are able to prescribe medical marijuana. Six months later, what is believed to be the first ad spot promoting a dispensary aired in Northern California, on a local Fox affiliate. Such advertisements are still rare and considered too risky by most television stations.

2. Some Municipalities have Outlawed Outdoor Pot Advertising.
Both Colorado and Washington have put restrictions on outdoor cannabis advertisements.

In Washington, dispensaries are banned from advertising on transit vehicles. Moreover, marijuana merchants are not allowed to promote their products through giveaways, branded merchandise, or coupons. Marijuana advertisements may not be placed within 1,000 feet of a school, making vehicle wraps impractical.

Colorado’s outdoor advertising ban is even more onerous. In 2013, the state’s Marijuana Enforcement Division (MED) banned any “advertising that is visible to members of the public from any street, sidewalk, park, or other public place.” Additionally, MED permits other forms of advertisement only if less than 30% of the publication’s audience is under 21. That rule also applies to websites.

3. Federal Tax Codes Ban Deductions for Marijuana Marketing Costs.
Companies can typically write off advertising costs to lower their tax responsibility. However, this is not possible for marijuana dispensaries, as the federal tax code qualifies marijuana marketing as a criminal conspiracy to sell narcotics.

4. Online Advertising Moguls Disqualify Marijuana Ads.
Google AdWords doesn’t allow ads to appear when users search for drug-related terms. It can be impossible to work around such entrenched Internet advertising restrictions.

Given these difficulties, it may seem impossible to effectively market a marijuana dispensary. However, medical marijuana retailers have discovered alternative forms of marketing. For instance, a cannabis dispensary may sponsor a charity walk or a sports tournament. Promoters may also be willing to work with dispensaries for promotion at live events. For more input on how to flesh out the marketing portion of your medical cannabis dispensary business plan, contact us today.


Comments are closed.