How to Build a Cannabis Advertising Strategy (from Scratch)

Are you struggling to advertise your dispensary in a highly regulated industry? You're not alone. In today's cannabis market, advertising presents unique challenges with restrictions on age requirements, content presentation, and promotional channels.

But with the right approach, you can create an effective advertising strategy that drives traffic, increases sales, and builds your brand—all while staying compliant.

This step-by-step guide will walk you through creating a comprehensive cannabis advertising strategy, from setting goals to measuring results. Whether launching your first campaign or looking to optimize existing efforts, these proven tactics will help you navigate the complex world of cannabis marketing.

Before spending a dollar on advertising, you need clarity on what success looks like and who you're trying to reach.

Set Clear, Measurable Objectives

Your advertising goals should tie directly to business outcomes:

• Awareness: Increase brand recognition in your local market

• Traffic: Drive more visitors to your dispensary or website

• Conversion: Generate more first-time purchases

• Retention: Encourage repeat purchases and loyalty

• Revenue: Increase average order value or total sales

Each objective requires different tactics, so prioritize based on your current business needs.

Identify Your Target Audience

Your cannabis business audience likely consists of small business owners who dislike technical jargon and prefer practical, actionable tips. When defining your audience, consider:

• Demographics: Age, location, income level

• Psychographics: Interests, values, lifestyle choices

• Purchase behavior: Frequency, products preferred, spending habits

• Pain points: What problems are they trying to solve?

Create detailed customer segments based on these factors. For example, "health-conscious professionals ages 30-45 seeking alternatives to alcohol" or "medical patients looking for specific symptom relief."

Pro tip: Your audience likely reads industry publications, follows cannabis business influencers, and prefers mobile-friendly formats with quick, scannable content and visual explanations.

Cannabis businesses in New Jersey (and many other states) face advertising restrictions, including audience age verification, specific warning requirements, and location limitations. Working within these constraints, here are the most effective paid channels:

Programmatic Display Advertising

These networks specialize in cannabis-compliant advertising and can place your ads on relevant websites with appropriate audience demographics:

• MJPlatform

• Mantis

• MediaJel

• Safe-Reach

Digital Out-of-Home (DOOH)

DOOH includes digital billboards and screens in:

• Rideshare vehicles

• Gas stations

• Grocery stores

• Mall directories

In most states, you must ensure your ads aren't within a specified distance (often 200 feet) of schools or places where children gather.

Direct Mail

This traditional channel remains effective for cannabis businesses because:

• It's highly targeted by geography

• You control who receives your message

• Creative options are less restricted

• Performance is easily measured

Social Media (Organic + Paid)

Social media is one of the best platforms for cannabis dispensary marketing. It's widely used, allows consistent content sharing, and helps establish customer communication. While paid options are limited, you can:

• Build organic presence on Instagram, Facebook, and Twitter

• Promote non-cannabis lifestyle content via paid ads

• Partner with influencers (following platform guidelines)

• Use content marketing to drive engagement

Compliance Alert: Advertisements targeting or appealing to individuals under 21 are prohibited, including depictions of persons under 21 consuming cannabis or using toys, characters, or cartoon characters.

Creating compelling ad creative while maintaining compliance requires balance and creativity.

Compliance Framework

Your advertising must disclose that the state licenses your facility, avoid content appealing to minors, and not promote excessive use or illegal activity. Additionally:

• Include required warnings on all materials

• Avoid making health claims without proper evidence

• Ensure all imagery features adults over 21

• Don't show consumption in ads

• Avoid cartoon characters or imagery appealing to children

Design Elements That Work

Your audience values formats like brief case studies, quick-reference guides, step-by-step instructions, visual breakdowns, short-form videos, and checklists. Incorporate these elements:

• Professional, clean branding that differentiates from the illicit market

• High-quality product photography (without showing consumption)

• Benefit-focused messaging rather than features

• Value-driven offers that don't focus solely on discounts

• Clear calls-to-action that drive specific behaviors

Messaging Strategies

Your audience favors straightforward, clear language over marketing jargon, appreciates real-world examples from the cannabis industry, and responds well to direct, actionable advice. Focus on:

• Education about products and effects

• Community involvement and social responsibility

• Quality standards and testing procedures

• Staff expertise and personal service

• Unique dispensary experience

Determining your advertising budget requires balancing ambition with reality.

Budgeting Approaches

Consider these budgeting methods:

• Percentage of Revenue: Allocate 7-15% of revenue to marketing, with about half to paid advertising

• Competitive Matching: Research what competitors spend and match or exceed

• Goal-Based: Calculate the cost to achieve specific goals (new customers, sales targets)

• Test-and-Learn: Start small, measure results, and scale successful tactics

Cost Benchmarks

For a typical dispensary opening in California, marketing expenses might run around $100,000, including costs for one full-time marketing staff person (or agency costs per year), plus expenses for website, ads, printing, etc. In your budget, allocate funds for:

• Channel-specific advertising (programmatic, DOOH, direct mail)

• Creative development and production

• Technology and analytics tools

• Agency or staff resources

Phased Approach

For new advertisers, consider this graduated approach:

1. Phase 1 (Months 1-3): $2,500-5,000/month testing 2-3 channels

2. Phase 2 (Months 4-6): $5,000-10,000/month scaling successful channels

3. Phase 3 (Months 7+): $10,000+/month expanding reach and creative options

This approach allows you to gather data before making larger investments.

Success depends on continuous improvement through data analysis and optimization.

Launch Checklist

Before launching:

• Confirm that all creative follows state regulations

• Set up proper tracking for all campaigns

• Establish baseline metrics for comparison

• Create a content calendar for consistent execution

• Brief all team members on objectives and messaging

Key Performance Indicators (KPIs)

Your audience is highly focused on measurable results like foot traffic and sales, values proven track records in the cannabis industry, and needs to see clear ROI potential. Track:

• Traffic metrics: Website visits, store visits, click-through rates

• Engagement metrics: Time on site, page views, social interactions

• Conversion metrics: Sign-ups, first purchases, average order value

• Business metrics: Revenue growth, customer acquisition cost, ROI

Optimization Framework

Implement a structured optimization process:

1. Weekly: Review campaign performance against KPIs

2. Bi-weekly: Adjust creative and targeting based on data

3. Monthly: Reallocate budget to best-performing channels

4. Quarterly: Evaluate overall strategy against business goals

Use A/B testing to improve messaging, offers, and creative elements continuously.

Creating and executing an effective cannabis advertising strategy requires expertise in marketing, compliance, and the unique dynamics of the cannabis industry. Working with specialists can save you time, money, and regulatory headaches.

A specialized Cannabis Advertising Agency can help you:

• Navigate complex regulatory environments

• Access cannabis-friendly advertising platforms

• Create compliant creative that still converts

• Track and optimize campaign performance

• Scale successful tactics efficiently

Ready to transform your dispensary's growth trajectory? Please book a consultation with our cannabis marketing experts to discuss your goals and challenges.