Five Tips For Marketing Your Agency Services to the Cannabis Industry

Cannabis products

The cannabis industry is one of the fastest-growing sectors in the United States and is expected to grow rapidly. As the industry grows, so does the need for professional services such as web design, graphic design, and branding.

According to the 2022 U.S. Cannabis ReportU.S.dustry Projections & Trends from New Frontier Data, worldwide cannabis sales reached $25 billion in 2021. Moreover, the number of cannabis consumers is expected to grow by 4% each year for the next eight years, reaching 71 million users by 2030.

At the same time, recreational adult-use cannabis is still only legal (or approved to become legal soon) in 19 states, while medical cannabis is allowed in 39 states.

As we continue towards federal legalization, more markets will open up, offering even more opportunities for companies and professional services targeting cannabis businesses.

If you are a professional service provider looking to market your services to the cannabis industry, you should keep a few things in mind. The Hood Collective, a content marketing agency based in Portland, Oregon, has exclusively worked in the cannabis industry for the past five years. We’ve learned quite a bit about what it takes to succeed in this exciting, challenging, and highly volatile industry.

This article will give you five tips for marketing your professional services to the cannabis industry.

Position your company with a cannabis-only focus

The cannabis industry is still in its infancy, presenting risks and opportunities for businesses willing to take a chance in this burgeoning market. One of the best ways to succeed in the cannabis industry is to market your agency services as cannabis-specific.

By doing this, you can set yourself apart from the competition and show potential clients that you have the expertise and knowledge to help them succeed in the cannabis industry. In addition, you can use your cannabis-specific marketing to build trust and credibility with potential clients.

Does this mean you have to abandon every other industry and focus exclusively on cannabis?

Not necessarily.

But at the very least, you’ll need to create a section on your website, preferably a division within your agency if you are large enough that is cannabis-focused.

Your potential customers want to know that you have experience in the cannabis industry and that you’re committed to it. You might even carve out a different brand for your cannabis-centric business.

This also means you probably want someone on your team familiar with cannabis.

I don’t mean someone who’s a cannabis consumer (though that won’t hurt), but someone who has experience working in the industry and understands the many challenges involved. This will help you immensely as you pitch yourself to business owners in the industry, who will spot a phony from miles away.

Along these same lines, one of the critical mistakes to avoid when branding your clients (and your own business) is using stoner clichés and stereotypes. The last thing the industry needs is another green logo with a cannabis leaf or medical cross.

Take the time to research the successful cannabis brands in your area and try to learn from them without outright copying what they are doing.

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Market on a state-by-state basis

States have different laws and restrictions when it comes to cannabis. As a result, it’s essential to market to cannabis companies state by state. This way, you can ensure that your marketing efforts comply with each state’s rules and regulations.

To market to cannabis companies on a state-by-state basis, you’ll need to do your research and understand the market in each state. You’ll also need to stay up-to-date on the ever-changing laws and regulations surrounding cannabis.

While there are some broad agreements across all the states (marketing directly to minors is a no-go in every jurisdiction), the ways measures are implemented can be vastly different. For instance, some states forbid any logo or branding that features a cartoon or animated character. Others are more lenient in this regard. But if you’re willing to put in the work, marketing to cannabis companies state-by-state can be a great way to grow your agency.

Just as important to realize is that each state market is completely segregated from the other states. That means only the very largest brands have crossed over into multiple states because it requires acquiring licenses in each state and adapting your business to the rules of that particular state.

So your agency must understand the individual requirements of each state that your clients operate in a while also necessitating that you market your own business via the marketing channels available in each state. For instance, the Leaf family of magazines has editions for their core marketing areas (California Leaf, Maryland Leaf, Northwest Leaf, etc).

There is an exception to this rule. Each state regulates cannabis, but CBD and hemp are not restricted in the same way. And the truth is that, at the moment, CBD and hemp probably offer more significant potential in marketing and branding needs. Keep this in mind as you strategize how and where you want to enter the cannabis market.

Understand 280E and other unique restrictions facing cannabis businesses

There are many special restrictions that cannabis companies face, from advertising limitations to banking hurdles.

One of the most significant restrictions is section 280E of the U.S. tax code. This section prohibits businesses from deducting expenses related to selling illegal drugs, including cannabis. As a result, cannabis companies are taxed at a much higher rate than other businesses. This happens even though cannabis has been legalized in so many states.

What does this mean for you?

If you’ve worked at a marketing agency for several years, you are probably used to the fact that clients can deduct your services from their business taxes. This makes investing in marketing a wise decision for most businesses.

But because cannabis companies are denied this ability, not to mention the extra heavy tax burden they are already facing, they don’t have the resources or the same incentives you may be U.S.ed to. This puts the onus on you to provide highly cost-effective solutions.

Focus your services for cannabis businesses on those aspects that are most indispensable.

Every cannabis company needs a logo. Every company needs a website. But not every company needs a presence on social media or can afford to have one.

And if you don’t have deep experience in the necessary services, partner with companies that can help you deliver those services cost-effectively and in a way that maximizes your profits.

It’s also important to be aware that cannabis companies are severely limited in how and where they can advertise.

The major social media platforms are not cannabis friendly.

Most states don’t allow advertising on television and the radio.

Some jurisdictions ban billboards.

In this kind of environment, marketing companies must come up with creative marketing solutions for cannabis clients. For example, cannabis product packaging is a critical differentiator in a restricted environment.

Of course, these challenges make working in this industry so exciting.

Target the high end of the cannabis market

With all of the above in mind, most marketing agencies will be best served by targeting the high end of the market.

Only the most prominent companies, which tend to be vertically integrated and operate in multiple states, can afford significant marketing budgets. A few examples of the types of companies I’m talking about include Select Oil, Wyld,  and Trulieve. Each has modern branding, and you might not even realize they are cannabis companies when you first encounter them.

While these clients will have in-house marketing teams, they will also work with several outside vendors on a retainer and case-by-case basis.

While landing such a client can be difficult, if you have a proven track record of success both inside and outside the industry, understand how to market to women and other critical target customers, as well as a unique voice and style that appeals to big brands, you’ll have an opportunity.

On the other hand, it’s essential to recognize that because of the current limitations on the industry, there aren’t a lot of companies sitting in the middle class. Most cannabis companies are either barely surviving or are one of the market leaders like those companies mentioned above. The vast majority of the businesses in the industry will not be able to afford your services. You need to tailor your pitch to the most prominent companies.

Get ready for federal legalization in the coming years

While the markets are currently restricted in some areas, this will not always be the case. All players in the industry, including marketing companies targeting canna businesses, need to consider how they will operate under a federal system. This includes thinking about things like banking, taxes, and licensing. For you, it means preparing for the day when brands can operate freely across state lines and the impact that will have on your clients and you!

From day one, you need to start building relationships with the key players in the industry, including growers, retailers, and investors. These relationships will be crucial as the industry evolves and becomes more open.

At the same time, be aware that many giant corporations are choosing not to get involved in cannabis while it’s still federally illegal. These companies will immediately flood the market after legalization. While they have relationships with some of the most extensive marketing and advertising companies in the world, those companies will be as new to cannabis as the corporations they represent.

The bottom line is there will be a massive demand for cannabis-specific expertise as the industry moves forward. This means there is a window of opportunity for successful marketing and branding companies with a head start in the industry.

While the “Green Rush” may be overrated at this particular time, that doesn’t mean you should avoid the industry altogether. Instead, it means now may be the perfect time to get involved, with more states coming online yearly and federal legalization on the horizon. It will take a lot of hard work and planning, but by all means, the cannabis industry is one that you should consider.

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