According to my company’s research, retail cannabis sales in the United States and Canada will generate an estimated $172 billion over the next six years. Beyond that, we found that the global cannabis consumer market is worth an estimated $344 billion. Such numbers are getting noticed not only by newly impacted enterprises among Big Pharma, Big Alcohol and Big Tobacco (paywall), but also by savvy, fast-moving consumer goods (FMCG) brands and non-cannabis food and beverage manufacturers.
It is important for cannabis marketers to understand a new target market. My company conducted an online survey of 3,138 U.S. cannabis consumers in 2018 and found that just over one-fifth (20.2%) fell into what is considered a marketer’s sweet spot: A prime target group of relatively educated (i.e., some college) and affluent (i.e., annual household incomes of $90,000+) men and women, between the ages of 25 and 54, who demographically comprise a traditional top-spending consumer segment. One Canadian study (via Civilized) found that the majority of the respondents who were interested in trying cannabis have higher education degrees — including 43% who have university degrees and 32% who have college degrees. Further, cannabis consumers surveyed by Deloitte cited product quality as the primary reason for converting to the legal market. This means those consumers would consequently depend on information from manufacturers and marketers as far as the quality or type of products available in the market.
So, how does one find such consumers, understand what they want and how they behave, and — most importantly — legally and safely engage with them?
The biggest mistakes I see product marketers make are misunderstanding the cannabis consumer groups, misinterpreting their behavior and ignoring relevant marketing regulations. Large-scale manufacturers in the space will likely find that technology is their strongest ally in overcoming these marketing challenges. In fact, fully understanding who the customer is, protecting one’s brand and engaging in regulatory-compliant marketing can now be less daunting in an increasingly digital cannabis marketplace.
Technology solutions — particularly advertising technology (adtech) and big data — can open this new and legal consumer segment to marketers both within and outside the cannabis industry. For the most part, the data suggests that cannabis consumers are not just the stereotypical “stoners” as long portrayed in media and pop culture. Rather, I have seen that many are intellectually curious, know how to use and navigate the world of digital tools and marketplaces, and ultimately appreciate the resource-rich digital environment for their cannabis transactions.
For example, engagement by consumers via cannabis-centric digital platforms such as Eaze, Baker, iHeartJane, Weedmaps, Leafly and now even High Times is fast-growing and increasingly sophisticated. (Full disclosure: My company has contributed articles to High Times and has used data from companies such as Eaze, iHeartJane and WeedMaps.) Subscribers, followers or customers can visit those platforms to engage in discussions around health and wellness before introducing cannabis-based products into their lifestyles.
The combination of ingestion, processing and targeting technologies can inform a safe, compliant and ready-to-spend media plan to help secure a much-sought-after first-mover advantage in this new consumer segment. In-house marketing departments can begin collecting their own data with commonly used applications for social media metrics such as HubSpot. Further, they can use popular tools such as Similarweb.com and SEMrush to create demographic surveys and assess competitors. Marketers can also take advantage of free tools such as Google Analytics to inform their SEO campaigns. Simple and accessible tools such as these are fundamental to creating informed engagement with current and prospective customers.
Marketing in the cannabis industry is unlike other industries because cannabis remains a federally illegal product in the U.S.; marketers of both plant- and non-plant-touching companies are limited on traditional marketing channels. However, savvy cannabis marketers can build internal databases to leverage direct marketing. Instagram houses an extended cannabis community with many niche groups that brands can use to target specific customers. If a product or service is intended for a B2B audience, LinkedIn and Leafwire (the LinkedIn of cannabis) are well-used channels to promote and engage with customers.
Influencer marketing and brand ambassadors have also emerged as useful tools for cannabis brands because of their ability to connect with specialized audiences whose consumer profiles are often particular to the cannabis industry. PR-assisted branding can deliver a powerful message without the limitations placed on traditional media channels. However, marketers should note that brand messages, like advertisements and any other publicly facing product information, will still be subject to federal and state regulations specific to cannabis, including making medical claims, directing messages to minors and direct marketing via the United States Postal Service. Cannabis brands should invest in experienced, and preferably cannabis-specific, compliance solutions to compliment, if not guide, marketing and legal efforts and optimize results.
Adtech has reinvented itself three or four times in the past 20 years, and its continuous evolution has resulted in today’s sophisticated solutions for consumer segmentation and advertising. I believe recognizing, adapting to and integrating these technologies and others is the path to the next frontier of digital cannabis.