Cannabis Media Council publishes 2024 advertising guidelines report

The Cannabis Media Council just released its 2024 report titled “Full Spectrum: Guidelines for Responsible Cannabis Advertising,” and it’s chock full of great advice for people in the cannabis industry trying to navigate the complicated landscape for cannabis advertising and marketing.

One of the key findings in the report is that cannabis marketing continues to be unfunded or underfunded (often less than 5% of annual operating budgets) compared to other traditional sectors, where marketing spending averaged 9.1-12% of annual operating budgets.

Not only that, cannabis brands spend 82% less on marketing in relation to the Consumer Packaged Goods industry when comparing marketing spend as a percentage of revenue, according to data from marketing technology firm Surfside. Even worse, Surfside found that dispensaries spend 92% (as a percentage of revenue) less on marketing in relation to the retail vertical.

Green Market Report’s Executive Editor Debra Borchardt sat down with CMC Co-founder Amy Deneson to talk about the new report and its suggested advice for cannabis marketers.

This interview has been edited for length and clarity.

I felt like this report was impressive in the amount of useful and practical information. Who do you see as your audience for this report?

Amy Deneson: We are all building this industry, and so it’s really important as we issue these guidelines that it helps empower people to build and to create for their own aims. So there are two main audiences that we endeavor to inspire and also empower with the full spectrum guidelines.

One are all the cannabinoid operators who are looking to deploy their marketing dollars in a impactful way. Advertising is part of the marketing mix. (We want) to let them know that they can advertise but also that they also need to go get budgets in order to advertise.

The other audience that we’re speaking to are media providers, our outlets, our publishers, our platforms that are either open to the category and to some extent and expanding their inventory to the cannabis sector – or they are in the midst of needing to make the business case to someone internally to work with the cannabis sector as advertisers.

With the publisher side of the house, we also try to provide useful information as to the business opportunity of opening up to the sector. Encouraging publishers to be excited to work with this category and then giving them tips and tricks for how to work with either their legal team in order to set out, for example, the letter of publisher indemnification.

The other internal teams that we often need to work with is the business development team, to help them be comfortable going out to their existing advertisers and explaining why cannabis fits within the publication’s mission and community.

The report states that the cannabis industry, in general, tends to spend much less on marketing than more traditional industries. We know that a lot of that has to do with taxation, because they can’t claim marketing as a business expense. Do you think that that’s the main reason, or do you think it’s just the immaturity of the legal industry, that it just hasn’t had time to understand the benefits of marketing budgets?

Deneson: It’s a great question. For the last 10 years of being in the marketing leadership roles with a number of brands from multistate operators to startups, I truly think that it has to do with marketing not being a write-off as a business expense.

We all know the expense of getting to market, whether it’s a vertically integrated state by state or looking to try to build a brand across the industry. There’s also capital constraint on who and how much can be invested into the sector. I think brands and operators are honestly just running out of money by the time they get to market, and there’s not much left over for marketing.

The second thing is that I think that there is a very big misunderstanding that brands cannot advertise. I’ve spent four years with the Cannabis Media Council and still, on a daily basis, hear that cannabis advertisers cannot advertise. It’s not true. As we evolve, we understand that if we have the marketing dollars, advertising is a channel that’s open to us and that we can make the decision on that marketing spend. What percentage of it do we want to allocate to the paid channel versus the other parts of the marketing program and methodologies?

The use of cannabis versus marijuana has certainly been a source of debate within the industry. Within the report, you promote the use of the word cannabis, but every SEO research that we do returns marijuana as the top search term, not cannabis. We’re caught in the middle on this, and I’m curious how you see that for your media audience on this terminology debate.

Deneson: We went towards advocating for cannabis based on the plant’s name and how marijuana has been weaponized, but there’s also a full business case to be made that literally the names of programs are the medical marijuana programs.

I think that giving people a very base foundation of understanding of the terms, what is generally meant by them, and giving a launch pad to make their own business decisions is what we aim to achieve at this time.

I found the advice on dealing with Meta (Facebook/Instagram) and influencers super helpful. You really gave some practical guidelines on how to approach these social media giants who have historically not been super friendly to cannabis. Maybe you could just touch a little bit on how you were able to retrieve the information to give that guidance.

Deneson: The goal for us was to help advertisers understand why they’re seeing advertising for hemp-derived products on Facebook or Instagram when they thought that cannabis couldn’t advertise. We offer practical advice on how to engage with Meta, as you see in a case study with Embarc and how they had incredible success.

But the way we secured that knowledge for Meta is (through) another hat that I wear in the industry. I am the co-founder of Pheno, an ad agency for cannabinoid brands and businesses and revolutions. I work directly with advertisers on that property to get them live, be compliant, and achieve results.

You also touch on influencers, who are becoming more important for cannabis companies to reach out to consumers. Is it difficult to figure out the way to measure the effectiveness of an influencer?

Deneson: The influencer information that we provide is twofold. One is to encourage the brand to engage with an influencer in a way that will serve them and the key performance indicators and that the return on ad spend or the return on sponsorship will work for the brand.

The second way that we encourage people to engage influencers is to understand that the brand will be held responsible for whatever the influencer says. So it’s about also the brand understanding that they need to have terms and conditions in place. They need to have scripts in place as a brand safety activity, as well as looking for the return on investment that they want to see. Within the guidelines, we talk about best practices for engaging with influencers and also provide a sample contract that brands can reference.

The full report, “Full Spectrum: Guidelines for Responsible Cannabis Advertising,” is free to download at cannabismediacouncil.com.