By Jeremy Jacobs
Within the current legal landscape, federal restrictions and market-by-market fragmentation make the cannabis market exceptionally difficult to gain market reach, regardless if you’re a retailer, product company, or media company. This dynamic is amplified when it comes to cannabis advertising, as most traditional media outlets and advertising mediums restrict or prohibit cannabis advertising.
Despite these restrictions, the time to gain the loyalty of this demographic is now. The cannabis consumer loyalty is a first mover advantage situation. Cannabis consumers are very loyal to those who are daring like them and participate in the movement directly. Once it’s federally legal, the market will have all sorts of brands competing for the hearts and minds of the cannabis consumer. Brands should be focused on the blue ocean rather than waiting for the red ocean that is to come post-federal legalization. Now is the time to maximize the impact. Cannabis-centric advertising is more cost-effective and impactful now than it ever will be.
In order to gain access to this highly coveted demographic of cannabis consumers in an effective way, a media company must work location by location, consumer by consumer, to aggregate the reach needed to be a valuable and viable media partner to its advertisers.
Creating a high-traffic, cannabis-centric website or relying on programmatic advertising platforms to aggregate publishers alone could be viewed as shortcuts to aggregate millions of cannabis-focused impressions. However, history has proven in the media industry that owning your content and the platform in which advertisements are served, particularly when those assets offer an unadulterated path directly to a specific demographic (here, known legal cannabis consumers), amasses the highest value for the companies willing to take the harder and longer path.
Through its sophisticated technologies, media infrastructure focused on out of home (digital out of home and experiential) and complemented by targeted digital elements (OTT, web, and mobile) is perfectly positioned to serve the most coveted demographic on the planet: the cannabis consumer. Focusing on the out of home segment should prove beneficial as more and more advertising dollars are allocated to this medium. The Out of Home Advertising Association of America has indicated that the out of home segment has grown by nearly 16% over the last 5 years and approximately 4.5% in the last year alone, with the organization’s President and CEO indicating that “in today’s new era of media, OOH has become a force for consumer connection, offering engaging and informational experiences.”
While scaling in this fragmented industry is difficult, companies that have achieved this feat have become immensely valuable. Experts’ projected trajectory and overall value attributed to the cannabis industry is unprecedented. National acceptance of cannabis legalization nears 70% as over two-thirds of the US population lives in a state that has legalized cannabis consumption. Even with many states not yet offering access to legal cannabis, over 55 million Americans consume cannabis, supporting a space that has blossomed into a multibillion dollar industry. Including hemp-derived CBD, industry forecasts have pegged the cannabis space as high as a $50 billion industry within the next five years.
There is a lot to know about a cannabis consumer. There are 55 million of them that spend over $10 billion annually on cannabis alone. They shop often, spend big and stay loyal. This brand loyal consumer with significant discretionary income is exactly the audience segment a business is looking for. They are musicians, outdoorsy, athletes, gamers, binge watchers, professionals, parents, millennials, boomers, and tourists, just to name a few. We are seeing successful marketing campaigns with a wide array of products and services, because the cannabis consumers, while woven together with some central themes are as unique as the cannabis product they consume.
Throughout history, in large dynamic growth sectors like cannabis, where an industry category reaches $5 billion in annual spending and continues to grow at 20% year over year (such as cable television and broadband internet subscription spending), early and well-positioned movers are often best positioned for long term growth and value realization. So, as the cannabis craze continues to take hold, media platforms that embrace trends of out of home and targeted digital elements will continue to bear fruit.
Jeremy Jacobs is the co-founder and chairman of Enlighten, an enterprise cannabis retail technology with an education-first approach to empower and engage the evolving cannabis consumer.