Dispensary Marketing: Cannabis Directory or a Website?
By Stu Waters
Getting a cannabis license is tough enough as it is. Once you actually get your dispensary running, a new challenge appears: getting customers in the door.
7 min read
One of the major obstacles a cannabis dispensary owner will have to address is turning a profit while successfully marketing their products. Much of the money people invest in the industry goes towards infrastructure, products, and compliance, which often leaves little room for marketing.
State regulations typically forbid cannabis dispensaries from traditional advertising strategies. Almost every dispensary owner knows that an online presence is what will make their brand succeed.
Where many dispensary owners disagree is how best to achieve that presence. There are two main approaches, each with its own benefits and drawbacks: being a part of a well-known directory service, or starting your own website and using it to generate consumer interest.
The Cost Of A Directory
Like a website, a directory service is an online domain that you pay to keep up and running.
Directory services differ from web pages. Instead of showcasing a single business’s information and product, a directory service functions as a hub for all other businesses of the same type as well.
The more popular a directory service, the more the owner can charge people to have their businesses listed there. The cannabis industry’s most popular directory services are prime real estate for new dispensaries, which can quickly leverage high website traffic towards getting customers in the door.
Directories like Weedmaps and Leafly charge anywhere from $400 to $3000 a month for dispensaries to enjoy listing on their sites. For some dispensaries, this is acceptable overhead. For others, it’s a steep price to pay.
But there is another, hidden cost that comes along with using a directory service. In the consumer’s mind, your brand is tied to the directory’s brand and all of the local competitors who also use the same directory service. This essentially limits your branding potential, since there will always be a point of comparison between your dispensary and its local competitors.
This opportunity cost is negligible when a dispensary is just starting out, but it can quickly limit growth for an expanding operation. Additionally, there are risks to associating your brand with any one specific platform – your dependence on the platform can become a crutch.
The Pay-to-Win Business Model
As we have seen, the cost of using a directory service to build your brand can be quite high. Accumulating the preliminary cost required to open a listing is half the battle. The other part that matters is separating yourself from the countless others doing the same thing.
This is where cost again becomes a factor. The widely varying rates of some of these directory services reflect a pay-to-win business model. The more popular your dispensary and your brand, the more business you will have. The more business you have, the more money you are making.
And the more money you make, the better listing options you can afford. The dispensaries that are shelling out tens of thousands of dollars a month are showing up first in the listing, funneling all the traffic to them.
This is where it pays to have your own website promoting products and content to your customers. If Weedmaps or Leafly double their prices starting tomorrow, your website’s loyal followers will still be there.
Independent Digital Marketing for Cannabis Dispensaries
The independent path can be more challenging for cannabis dispensary owners to develop and maintain, especially when the dispensary is brand-new. However, the long-term gains this strategy can earn make it an attractive choice for people who have set their sights on becoming fixtures of the local cannabis community.
Marketing your products and services through your own web property enables independence. There is very little that anyone can do to separate your brand from the customers it earns. If, for whatever reason, regulators shut down cannabis directory services (unlikely as that may be), you would still have access to your core customer base.
The independent method may not produce fast-and-easy results the way paying a directory service does, but it gives you the ability to control your brand entirely. This paves the way to advanced marketing tactics like customer retargeting, which can significantly increase the total lifetime value of every single customer who walks into your dispensary.
Hosting your own website allows you to engage in content marketing, as well. Instead of relying on a third-party directory service to represent your brand’s value to customers, you can engage them directly. Begin educating the local cannabis community about the latest developments in cannabis research and culture, and it will respond by buying from you instead of your competitors.
The Combined Approach
Neither directory services nor website hosts demand exclusivity from their clients. There is nothing stopping you from presenting your dispensary on a directory service while you build a community around your own website.
In many cases, the combined approach can be the best way to boost business in the short-term while following an independent long-term strategy. Like every other marketing approach, identifying your goals and budget is key to making it work.
The overhead costs of running a dispensary tend to be high. If your dispensary has enough cash on hand to make directory services worthwhile, then there is an obvious economic incentive to pursue that path.
New dispensaries may be able to afford directory service campaigns simply by relying on invested liquidity. Many states require dispensary owners to show considerable financial assets, and there are few investment opportunities better than a business in a multi-billion-dollar market growing by 32% per year.
But in terms of long-term ROI, there are few options better than independent marketing through a hosted website. Establishing your own local following will provide numerous opportunities to exceed customer expectations while giving your brand the visibility it needs, and the best way to do that is with your own website.