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What Should a Cannabis Marketing Budget Look Like?

Conventional wisdom says that most small businesses don’t invest enough in marketing. This is certainly true for cannabis businesses, which operate in a nascent industry and are thus necessarily focused on figuring out the rules of survival.

Once your cannabis operation is fully licensed and operating, it’s time to ask the question:

How much should my company spend on marketing?

There’s no magic answer here. But there are lots of guidelines and useful lessons to be learned from other industries, which you can then adjust for the idiosyncrasies of cannabis.

Traditional marketing budget guidelines for non-cannabis businesses vary according to several factors:

  • Size of business
    Businesses with revenues less than $5M are often advised to budget 7-8% of total revenue for marketing.
  • Phase of growth
    Early stages of brand-building usually require a bigger investment than later growth phases
  • Business Sector (Product vs. Service, B2B vs. B2C)
    Recent data indicates that companies spend a larger share of revenue marketing services than products, and that consumer marketing (B2C) budgets are generally more than those for business-to-business (B2B).

Marketing Budget as % of Revenues (Average= 8%)

B2B Product 6.3%
B2B Services 6.9%
B2C Product 9.6%
B2C Services 11.8%

Source: 2018 CMO Survey (Deloitte/Duke)

Traditional models and methods usually don’t fit cannabis businesses, due to big differences in the way the industry operates. A cannabis company’s marketing budget is likely to be less than the average 8% of revenues seen in other industries. Still, marketing is a vital investment that should not be overlooked, even in the lean early days.

Cannabis Marketing is Different

As a young and highly regulated industry, cannabis has many restrictions on marketing products and services. Many traditional methods are not available, forcing marketers to rethink how best to allocate their precious dollars.

Some ways in which marketing costs can be adjusted for cannabis:

  • Advertising
    Legal restrictions greatly reduce advertising costs – think billboards, not TV commercials.
  • Communications and Training
    Everything in cannabis is new – consumers don’t know what to buy, suppliers don’t know how to sell – making education necessary throughout the entire supply chain.
  • Social Media and Digital Marketing
    Social Media is vital in certain segments, but also risky as the platforms can and often do shut down cannabis-related accounts without warning. Companies may find themselves spending less on social, and more on “old-school” tools like web and email.
  • Branding
    As more products come into the marketplace, branding will be more important than ever. Already, industry data shows that the top 5 brands have >40% market share consistently across states. (BDS Analytics, 1/18)
  • Public Relations
    Without the ability to advertise in most mainstream media, public relations is critical. The best PR tells a compelling story, which is critical in cannabis where the whole industry is still combating stigma. (For more information, see our article “Four Do-it-Yourself Steps to Promoting News About Your Cannabiz”).

Whatever stage your company is in, remember that marketing is vital and should be viewed as an investment, not just an expense. Even a small budget, invested wisely, can bring great results. To learn more, check out our article “Marketing for the Cannabis Industry”.

Not sure what to do next? We’d love to help! Contact us at for a free consultation!

Leslie Stern is a partner at Ingrid Marketing. With over 25 years of marketing experience, Leslie specializes in product marketing and launches, strategy, communications, and project management. You can reach her at