Experts project that cannabis sales will reach $33 billion by the end of 2022. As of 2022, 37 states, three territories and Washington, D.C., allow medical use of cannabis. Of that, 19 states, two territories and Washington, D.C., regulate cannabis for recreational use. This revenue represents a lot of opportunity for dollars to spend on cannabis ads. However, regulations have prevented most cannabis digital advertising.
As a restricted category that is still illegal at the federal level, cannabis advertising is very much at the local level. As we discussed in a previous post on new categories for linear, local TV and radio in legalized states are wading into the market. The recent passage by the House Appropriations Committee to permit legalized cannabis advertising in states could remove any remaining barriers for OTA (over-the-air) ads.
But what about digital? Cannabis businesses are eager to target people online because it’s measurable. They cannot attribute most of the ad dollars now because most spending is in OOH (out-of-home) advertising with billboards and taxicab banners.
For media sellers in states with recreational marijuana, the opportunity for digital advertising revenue is now possible with Marketron NXT and the Custom Solutions Desk.
Next, we’ll look at the market and capabilities of NXT.
The Cannabis Market Landscape
The key group with the most to gain and spend will be dispensaries. In big markets, there’s a lot of competition. Additionally, they need to gain brand visibility and drive website and foot traffic. The ability to target consumers with digital advertising can help them accomplish these goals and reach both types of audiences — residents and travelers.
Speaking of visitors, another group of advertisers includes cannabis tourism. According to a new report, it’s worth $17 billion. It’s rapidly growing and becoming a deciding factor in where people choose to vacation, especially for millennials, according to the report. The category includes cannabis tours of dispensaries and farms along with “bud and breakfast” hotels.
There is one additional category to consider. For states that have medicinal cannabis laws, residents must see a physician to qualify. These organizations are also seeking to attract patients either in person or via telehealth.
As you can see, the market is healthy and growing. With so much potential for digital revenue, you’ll be excited to hear about how NXT can deliver options.
Cannabis Digital Advertising: How It Works with NXT
As a disclaimer, any advertising regarding this category must adhere to state laws around content (e.g., use of specific language, creative parameters and programming rules). Refer to your legal counsel for any clarification.
We now have cannabis digital advertising packages to serve the needs of this industry. We execute these through alternative DSPs (demand-side platforms). The ad tactics available include:
- Static display (standard and with geofencing)
- Video display (standard and with geofencing)
- Retargeting (including clicks, impressions and past locations)
Additionally, you can access advanced add-ons for foot traffic attribution and third-party audiences. As these tactics fall under the Custom Solutions Desk, our digital experts support you with orders and creative.
For targeting, you’ll be able to do so via demographics (must be 21+), behaviors and interests, geography and previous online behaviors (e.g., clicks or impressions).
All campaigns are trackable with reporting and are billable through the NXT platform.
CBD Digital Ads Also Available
In addition to cannabis digital advertising, you can also sell ads for CBD in digital channels. CBD products derived from hemp containing less than 0.3% THC are legal federally. The Food and Drug Administration regulates CBD production and distribution. Requirements around advertising are again at the state level with restrictions on creative and copy. For example, ads can’t say that CBD cures an ailment.
Digital Advertising for Cannabis and CBD: New Revenue Is Blooming
If you are in a state with legal recreational cannabis, you have an amazing opportunity to obtain new customers and boost revenue. You now have a legal and compliant solution to get cannabis advertisers into the digital realm. It could be the centerpiece for your 2023 digital budget goals!
Learn more about our solutions by requesting a demo of NXT.
Already a NXT user? Talk to your client development manager.