Latest Wave of Cannabis Legalization Brings New Marketing and Brand-Building Opportunities for Businesses of All Stripes

Among other things, the 2020 U.S. election cycle ushered in another wave of cannabis legalization.

Five states—Arizona, Montana, Mississippi, New Jersey and South Dakota—voted in favor of legalizing cannabis in some form, adding to an already growing list of 33 states and further demonstrating that attitudes are becoming more progressive and less taboo.

The advertising industry is eager to do its part to ensure this billion-dollar business can thrive to its fullest potential. However, the barriers to entry are significant. Many media channels, particularly online, still will not accept cannabis ads.

With options limited, brands have turned to out-of-home (OOH) advertising, which has enjoyed a disproportionately large percentage of the cannabis advertising share. Nearly half of all ad spend to promote cannabis businesses went to this sector in the first four months of 2020. To place this into context, the industry average share for OOH is just 4%.

RELATED: In the Face of Restrictions and Limited Channels, Cannabis Marketers Turn to Out-of-Home Advertising–Here’s the Right Way to Do It

However, to say OOH receives this share purely due to having fewer restrictions than other channels would be unfair and inaccurate. In fact, when regulations surrounding the advertising of cannabis lessen, OOH will remain a powerful, highly effective and incredibly accessible channel ideal for all cannabis brands, from producers to dispensaries and beyond.

For starters, we know that generating high awareness when launching a product or opening a new store is critical to success in any business. This is true for cannabis brands as well, with one in four consumers learning about new products and their availability directly through advertising. For young cannabis brands, delivering a message that can be trusted by the consumer is of equal importance. For this reason, cannabis brands must depend on and utilize trustworthy media to inform consumers of what they are buying.

A 2020 MarketingSherpa study found that 69% of the 1,200 Americans surveyed saw OOH as a trusted advertising channel, as compared to social media (43%), online banner ads (39%) and mobile phone ads (39%). In a world of fake news, misunderstood media impressions and tech fatigue, OOH delivers a tangible, uncomplicated and real message. 

Second, cannabis brands need the ability to target specific store locations or dispensaries to stay top of mind for target audiences. In addition to having hyper-local attributes in its own right, OOH works seamlessly with and amplifies the impact of other channels to help marketers reach local cannabis consumers. Mobile, in particular, can work hand-in-hand with OOH billboards, as marketers are now geofencing areas surrounding an OOH ad to deliver timely and relevant messages to create a more impactful impression. Using anonymized device IDs, an advertiser can determine if someone is nearby to a particular billboard and then feed them a mobile ad that either reinforces the message on the billboard or corresponds and amplifies it in some way. It’s of critical importance that dispensaries establish themselves in communities, and mobile and OOH is a fantastic combination to achieve this. 

Lastly, value for money is always a key consideration for fledgling start-ups who may not be flush with deep advertising budgets. For cost-conscious cannabis brands, programmatic buying of OOH is now available. Programmatic campaigns not only allow cannabis brands to only pay for delivered impressions, but they also allow for targeting of specific audience-segments, while remaining compliant with regulatory guidelines. With lessons learned from online media, the OOH industry has implemented its own version of programmatic, and it's ideal for cannabis brands seeking to leverage the capabilities and reach of OOH cost-effectively and efficiently.

OOH has already been utilized in the world of cannabis marketing based on the strengths of the channel’s ability to deliver a trusted message to a mass, but targeted, audience in compliance with local advertising mandates. As regulations loosen and more states vote for the legalization of cannabis, marketers can continue to rely on OOH as a guide on how best to engage and prosper within this highly lucrative industry.

Craig Barber is vice president at Posterscope USA, a leading location-based marketing specialist with a focus in programmatic trading and real-time creative optimization.