Every cannabis business faces the question: how much should you spend on marketing? The answer depends on factors like your industry, growth goals, and revenue. But one thing is clear: investing in marketing is crucial, especially in a competitive industry like cannabis.
Here’s a simple breakdown to help you budget smartly.
Most businesses allocate 7–10% of their gross revenue to marketing. This range is recommended by the U.S. Small Business Administration and works well across industries.
• New cannabis businesses (less than 5 years old): Consider spending 10–15% of revenue to build brand awareness and attract customers.
• Established cannabis brands: Spending 5–10% is common, as the focus shifts to brand maintenance and strategic expansion.
The cannabis industry is highly competitive, so higher investments may be necessary to stand out—especially for dispensaries, CBD brands, and eCommerce businesses.
Your marketing budget will depend on your business type and competition. Different sectors of the cannabis industry require different approaches:
• Dispensaries: Need a higher budget for local SEO and Weedmaps listings to dominate local searches.
• CBD & Hemp Brands: Heavily rely on content marketing, influencer collaborations, and email campaigns due to ad restrictions on platforms like Google and Meta.
• Cannabis Retail & Delivery Services: Benefit from seasonal promotions, loyalty programs, and paid search campaigns to boost sales.
• B2B Cannabis Companies: Should focus on LinkedIn marketing, SEO-driven content, and industry networking to attract business partners.
By tailoring your budget to your niche, you can maximize ROI and attract the right customers.
Marketing spend for cannabis businesses must be strategic and compliant due to advertising restrictions on platforms like Google, Facebook, and Instagram. Instead of relying on traditional PPC advertising, cannabis brands should focus on organic growth strategies, compliant advertising channels, and community-building efforts. Here’s a breakdown of where cannabis businesses should invest their marketing budget:
• Website Development (15–25%) – A modern, compliant, and SEO-optimized website is the foundation of your online presence. A high-converting site with age-gating, legal disclaimers, and eCommerce functionality is a must for dispensaries and CBD brands.
• SEO & Content Marketing (20–30%) – Since paid search is heavily restricted, cannabis businesses must dominate organic search results through SEO-driven blog content, product descriptions, and optimized local pages.
• Influencer & Affiliate Marketing (15–25%) – Partnering with cannabis-friendly influencers, bloggers, and affiliate marketers can generate traffic while staying compliant with advertising laws.
• Social Media & Community Engagement (10–20%) – While paid social ads are restricted, organic content and engagement strategies on Instagram, LinkedIn, Twitter (X), and Reddit can build brand awareness.
• Email & SMS Marketing (10–15%) – Since Google and Facebook Ads aren’t viable, email and SMS marketing are some of the best ways to retain and re-engage customers legally.
• Programmatic & Native Advertising (10–15%) – Platforms like MANTIS, DSPs (Demand-Side Platforms), and cannabis-friendly ad networks provide compliant paid advertising opportunities.
By investing in organic, influencer-driven, and niche-compliant strategies, cannabis businesses can grow without relying on restricted PPC platforms.
If your goal is to scale your cannabis business, be prepared to invest strategically in compliant marketing channels that drive long-term growth. Cannabis brands must prioritize organic growth, influencer partnerships, and community-driven marketing.
Here’s how to allocate your budget for expansion:
• Expanding into new markets? Focus on SEO-driven local pages, influencer collaborations, and dispensary directories like Weedmaps and Leafly to boost visibility in new regions.
• Launching a new product? Invest in email & SMS marketing, content creation (blogs, videos, product guides), and engaging organic social media campaigns to drive awareness and sales without violating ad restrictions.
• Building brand authority? Leverage press releases, podcast sponsorships, and partnerships with cannabis industry publications to gain credibility and expand your audience.
• Scaling an eCommerce CBD brand? Optimize for SEO, influencer marketing, and affiliate partnerships to increase organic traffic and drive direct-to-consumer (DTC) sales.
The key is flexibility. Since advertising regulations can change, regularly analyze performance metrics (website traffic, keyword rankings, social engagement, and sales conversions) to adjust your budget based on ROI.
Marketing budgets are shifting as businesses become more ROI-focused.
• A 2023 study found that companies spent an average of 9.1% of their revenue on marketing, up from 6.4% in 2021.
• In 2024, marketing budgets continue to evolve, with a stronger focus on organic reach, influencer marketing, and data-driven strategies.
For cannabis businesses, staying ahead of market trends is crucial in a heavily regulated industry.
Let’s say you run a CBD brand or dispensary generating $500,000 annually. If you allocate 10% of revenue to marketing, that’s $50,000 per year. Here’s how you might divide it to maximize ROI while staying compliant:
• Website Optimization & Compliance – $7,500
Ensure your site is fast, mobile-friendly, legally compliant, and optimized for conversions with age-gating, secure payment processing, and local SEO enhancements.
• SEO & Content Marketing – $12,500
SEO is your best long-term strategy. Invest in high-quality blog content, optimized product pages, and local SEO to rank for dispensary & CBD-related searches.
• Cannabis-Friendly Ads (Programmatic, Weedmaps, Leafly) – $15,000
Use compliant advertising networks like MANTIS, Weedmaps, and Leafly to increase visibility while staying within legal guidelines.
• Social Media & Influencer Marketing – $10,000
Since traditional paid social ads are restricted, invest in organic engagement, influencer partnerships, and cannabis-friendly social platforms (Instagram, Twitter/X, LinkedIn, Reddit).
• Email & SMS Marketing – $5,000
Own your audience! Email and SMS campaigns drive repeat sales and customer retention, making them one of the highest-ROI marketing channels for cannabis businesses.
Not investing in marketing is the fastest way to lose momentum. Without visibility, even the best cannabis brands struggle to attract customers.
Think of marketing as an investment, not an expense. Every dollar spent should bring you closer to your growth goals.
At Creative Conspirator, we help cannabis dispensaries, CBD brands, and B2B businesses maximize their marketing budget for the best ROI.
Need a strategy that works? Let’s talk! Schedule a free consultation today and start scaling your cannabis business with data-driven marketing.
We would love to work with you! Book a free consultation now.
