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For advertisers, few industries present as much complexity as the cannabis sector. The drug is still prohibited on a federal level, and to complicate the landscape even further, each state, marketing channel, and publisher carries its own set of ad regulations for cannabis marketers to navigate.
At the same time, the cannabis market continues to grow. The US market is expected to reach $76.39 billion by 2030, outpacing previous forecasts and showing a predicted compound annual growth rate (CAGR) of 12.1% from 2024 to 2030. This level of business growth represents a significant opportunity for cannabis brands.
The challenge for cannabis advertisers is to capitalize on that opportunity by making the most of the advertising channels available to them, while maintaining compliance. To craft campaign strategies that effectively execute on this goal, cannabis marketers will want to keep the following considerations in mind:
For brands and marketers in the cannabis space, it is critical to spend time researching and developing a thorough understanding of the cannabis marketing-related laws that exist in target markets. This is foundational not only for ensuring regulatory compliance, but also for building trust with consumers and fostering a responsible brand image.
While each state carries its own set of regulations—for example, Virginia prohibits cannabis advertisers from running ads during school hours, while Montana prohibits the use of billboards for cannabis advertising—there are a few rules that hold true across the board, including the following:
As more and more state-level regulations are considered by politicians and voters, it’s important for advertisers to stay up to date on these developments. It’s a good idea to keep an eye on movement at the federal level as well, as the US Department of Justice considers reclassifying cannabis from a Schedule I to a less-restricted Schedule III drug. Cannabis’ reclassification would have implications that could allow brands to write off marketing costs as operating expenses, free up capital for marketing budgets, and theoretically loosen regulations for cannabis advertising.
Like state cannabis marketing regulations, each marketing channel (and each publisher and vendor within that channel) has its own approach to cannabis. For example, in the world of paid social, X (formerly Twitter) became the first major social platform to allow cannabis ads in the states where it’s legal in 2023, and Snapchat began allowing ads for cannabis and related products under strict guidelines that same year. Cannabis marketers must understand and monitor each platform’s policies to ensure that they’re taking advantage of platforms that do allow cannabis advertising (when those platforms make sense for their brand or client).
While the Federal Communications Commission does not allow cannabis advertisements to be aired on linear TV or radio, advertisers can run their ads via connected TV or digital audio. In fact, Spotify recently became the first streaming audio platform to allow cannabis advertisements, with restrictions on the explicit promotion of certain products.
In addition, out-of-home advertising has become a staple in cannabis marketing: 62% of the industry’s total ad spend is dedicated to it, according to Vivvix. Digital out-of-home (DOOH) presents a particularly exciting opportunity for cannabis advertisers, as it combines the advantages of traditional OOH with digital advertising capabilities like tracking and real-time optimization. As cannabis legalization expands, an increase in dispensaries will create more opportunities for in-store DOOH advertising to reach ready-to-buy customers. And unlike online platforms, DOOH faces fewer restrictions for cannabis ads, allowing broader audience reach and making the channel a more efficient, flexible option for cannabis marketers.
Traditional advertising comprises the lion’s share of the cannabis industry’s total ad spend: 74%, according to Vivvix. But of the remainder that’s invested in digital advertising, 96% is spent programmatically—and for good reason.
Many brands choose to run ads in publications centered around cannabis, such as High Times or Cannabis Culture, leveraging contextual placements that offer great opportunities to reach interested consumers. But those publications only represent one subset of cannabis consumers. With programmatic advertising, marketers can leverage automation to bridge the gap between cannabis-focused publications and more mainstream publications, ensuring advertisements reach cannabis consumers with precision across the web and doing so efficiently by navigating compliant inventory at scale. Programmatic also enhances campaigns with data-driven placements that provide an efficient ROAS.
At the same time, while Google and Meta have all but removed their ad networks from cannabis ad contention, brands can use programmatic advertising to connect the dots between premium publishers and the exchanges and networks that do allow cannabis industry advertising. Brands seek partners that understand canna-friendly inventory supply and demand and remain compliant with network, publisher, platform, and legal regulations.
The advertising industry continues to adapt to signal loss caused by consumers’ data privacy demands, privacy-related regulations, and platform changes like Apple’s App Tracking Transparency initiative. And in 2025, advertisers will lose even more signals as a result of Google’s plans for a consent-based model in Chrome. To adapt to this evolving landscape, cannabis marketers must adjust and set realistic expectations for campaign success amidst ongoing signal loss.
Key cookieless solutions for cannabis advertisers include leveraging first-party data, contextual advertising, and purchase or point of sale (POS) data. First-party data provides valuable insights from interested customers, while contextual targeting allows for regulation-compliant advertising on high-traffic cannabis sites like Leafly and Weed Maps. POS data, gathered at dispensaries during checkout, can be anonymized and matched to household IDs for more accurate targeting and attribution.
For cannabis startups, affordable contextual placements on popular cannabis publications can help reach consumers early in their journey in a privacy-friendly way. More established brands can explore higher-cost options like host-read podcast ads, which leverage the trust between podcast hosts and their engaged listeners. Geotargeting at events where cannabis consumers are likely to be offers another experimental avenue for reaching potential customers. Ultimately, by investing in and exploring privacy-friendly solutions, cannabis advertisers can succeed in the privacy-first digital landscape while respecting consumer demands and industry regulations.
In the current cannabis marketing climate, there are thousands of brands and dispensaries competing for the same consumers. But some potential brand exposure is reduced given that consumers’ number-one dispensary choice factor is location. And with so many regulations around showing products, consumption, and potency, it is important for cannabis advertisers to focus on what sets their brand apart and makes them unique.
Creative messaging that intersects with consumers’ interests can increase relevance that may lead to brand awareness, product trials, and new or return sales. For creative inspiration, turn to what cannabis consumers care about. Consumers appreciate low prices on a large selection and top-notch customer service, both benefits that cannabis advertisers may want to feature in their messaging.
Brands should also consider testing creative that leans into company culture or values. This can be a particularly impactful approach when advertisers can’t or don’t want to mention cannabis or cannabis products in order to increase the compliance of a certain ad or campaign.
CBD’s popularity is growing: In 2018, the estimated CBD usage rate among US adults was 6%, and that rate is forecast to increase to 35% in 2024. This surge in consumer interest presents a significant opportunity for brands to capitalize on the CBD market through strategic advertising campaigns.
CBD, or cannabidiol, is the non-psychoactive ingredient in cannabis. Because of its non-psychoactive nature, CBD has fewer restrictions at the federal level. At the same time, research suggests that people who consume CBD are likely to also consume cannabis. So, creating ads that focus on a brand’s CBD products can help create overall brand awareness and website traffic that leads to product cross-promotion without advertisers having to worry about some of the restrictions that come with traditional cannabis advertising.
Navigating the complex landscape of cannabis advertising requires careful consideration of several key factors. Perhaps most importantly, staying informed about local, state, and platform regulations is crucial for maintaining compliance, building trust with consumers, and reaching target audiences effectively while adhering to guidelines.
Investing in privacy-friendly cookieless solutions like first-party data, contextual advertising, and point-of-sale data is also critically important in today’s digital advertising landscape. And, when it comes to creative, telling a brand’s story can help cannabis advertisers overcome regulatory hurdles and differentiate themselves in a crowded market.
By keeping these considerations in mind, cannabis brands can develop robust, compliant advertising strategies that effectively reach consumers and drive growth in this rapidly expanding industry.
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Looking to learn even more about cannabis advertising—from opportune consumer personas to campaign best practices? Check out our guide, Cannabis Marketing in the Roaring 2020s, for a deep dive.