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Words by Gracie Evans

Achieving growth and building a following in any new industry can be tough, especially when its product used to be illegal. There is no better example of this than cannabis. Despite being legalized in many states for medicinal use, and even recreational in some, it is still illegal at the federal level.

From obtaining the selling permit to breaking through the highly competitive cannabis market, business owners have to deal with several hurdles in marijuana marketing. These stumbling blocks are challenging cannabis dealers in the United States who aim to establish a clientele in the industry.

Permit and Licensing Pitfalls

For marijuana marketing applicants, a local license must first be acquired to secure a state permit. But marijuana business licenses are granted only to a limited number of applicants. This poses a problem in some states, particularly in California, where local corruption is an issue. Fraudulent officials either hint for a bribe from license applicants, or they award the license to the highest bidders.

While some applicants opted to make an under-the-table payment and make the licensing process a bit smoother for them, others chose to fight back. For some hopeful applicants, getting a license from another municipality seems to be the next best option.

Licensing is also a slow and costly process. Businesses are not yet allowed to make profits while the application process is ongoing – and the wait can be quite long! And if the license applicant is unlucky, he ends up not being granted with the license.

The Unstable Weed Market

In the past, there were only a few weeds traders in the market. Since the supply is limited, they can afford to charge high prices for the weed. But due to the uptick in the marijuana merchants following the state after state legalization of cannabis, there has been a drop in the price. In Oregon, for instance, the price decreased by 50%. Overproduction seemed to be a problem these days.

Marijuana marketing will get tougher in the following years, according to a report made by Forbes. Although the industry is projected to go up, the market will be volatile. This forecast was made in consideration of the following issues that result in marijuana price compression:

  1. Marijuana overstock,
  2. The proliferation of cannabis shops,
  3. The legalization process of weed is far from complete, and
  4. The fact that marijuana is no longer considered a novelty.

High Competition among Marijuana Business Owners

With the marijuana marketing rate projected to reach more than USD 13.8 billion in the coming years, more and more people are estimated to engage in this business. Especially these days when legalization in other states is also being considered, the market size will grow even bigger.

Marijuana traders who used to hide in the black market are now coming out, joining the growing population of marijuana business owners in the industry. This has led to tight competition in the market.

As previously mentioned, licenses and state permits to be awarded in chosen dispensaries are very limited, too. This adds to the already intense competition among the marijuana business owners.

Promotion of the Cannabis Business

Marijuana marketing can be tricky since it is surrounded by legal restrictions. Even Super Bowl rejected an ad endorsing the legalization of medical cannabis this year. With mainstream advertising being tricky for marijuana business, how does one advertise effectively?

Many business owners are turning to digital marketing solutions. Social media platforms are popular choices, making the most of the organic reach advantage that they offer. The use of brand ambassadors or influencers, blog posts with cannabis SEO contents, and putting up online cannabis shows and podcasts are also popular choices.

New Security Guidelines for Cannabis Business

Marijuana dispensaries are expected to install high-resolution cameras in their establishment. In California, for example, a camera with a resolution of 1280 x 720 (720p) pixels and projects not fewer than 15 frames per second is mandatory.

An access control system is encouraged as part of the security plan. This is to ensure that only authorized persons can have access inside the dispensary. Marijuana business owners are also advised to do a background check of all their employees. This will prevent theft and giving the person with the wrong intentions access to the products. Intrusion alarm systems and physical security are also required by law in all cannabis dispensing facilities.