cannabis commerce media

Jul 23, 2023

By Hana Yoo

Commerce media, meet … cannabis.

On Tuesday, Surfside, a cannabis-focused data and marketing platform with its own CDP and DSP, rolled out its commerce media platform nationwide after going live with its first clients in April.

More than 500 dispensary partners are using the platform, which allows brands, including Glorious Cannabis Company, one of Surfside’s early partners, to run ads on cannabis retailer websites.

Site owners get to monetize space that previously didn’t generate revenue, and advertisers get to reach in-market cannabis shoppers when they’re low in the funnel. The platform is also connected to the retailer’s point-of-sale system.

“We’re only rendering ads for brands that are in stock at the dispensary location,” said Michael Blanche, Surfside’s co-founder and co-CEO.

But why does a cannabis ad tech company need its own commerce media platform?

The marketplace is “heavily fragmented,” Blanche said.

But the opportunity is vast.

Cannabis sales are set to hit new highs this year, with US consumers expected to spend more than $33.5 billion on cannabis. That’s more than people will spend on either craft beer, chocolate or eggs all year.

Flower power

Glorious saw its order volume increase 143%, online sales grow 115%, and market share surge 119% across active retailers.

Although Glorious also has the option to serve ads to the “canna curious” in a variety of places, the commerce media offering provides a more direct line to consumers when they’re close to the point of purchase, said Pete Truby, the brand’s VP of marketing.

Using the commerce media offering, Glorious was able display ads on retailer websites for the first time.

“I don’t know if anybody had tried that in cannabis,” he said.

Because consumers who are already on a cannabis retailer’s website are likely savvier cannabis shoppers than a more general programmatic audience, Glorious takes care to adjust its creative and taglines to appeal to these visitors, Truby said.

Best buds

Glorious decided to try the commerce media offering because of the success it had already seen using Surfside to buy and target programmatic display ads.

Cannabis is a highly regulated industry, but Surfside “takes a little of the work and anxiety off of my plate,” Truby said, by facilitating programmatic buys on cannabis-friendly mainstream publications, such as the Boston Globe, ESPN.com, USA Today and Barstool Sports.

Early on, Surfside had to persuade publishers to run cannabis advertising through custom private marketplace deals, Blanche said. But as cannabis has become more mainstream and less stigmatized, publishers have become more accepting.

Eventually, cannabis will “loosen up and be more like alcohol, [and] all that regulation will calm down,” Truby said.

“But what won’t calm down is the competition,” he added. “Trying to stand out and become a brand that lasts for years and years is just as important to me as the regulation.”

No bed of roses

In the interim, the cannabis industry is “a little bit of a Wild West,” Truby said.

For example, when it comes to DTC platforms, he said, “there is no Amazon of cannabis yet.”

Cannabis is also subject to differing state legislation and requirements.

“It’s very difficult for a brand to go national because they have to create partnerships to grow product in each of those different markets,” Blanche said.

Although more than half the US population has access to legal marijuana – 38 states and Washington, DC, have legalized medical marijuana, and 22 states and DC have made recreational cannabis use legal – it remains illegal at a federal level.

Even where cannabis is legal, only adults 21 and older can buy or consume marijuana, which means that brands must be very careful to only target consumers of legal age. And although some concessions are being made, cannabis ads are banned or restricted on most social media platforms, including Meta, Google, Pinterest, Snap, TikTok and X (formerly Twitter).

For instance, Glorious must tread carefully when posting “a pretty picture” encouraging consumers to check out the company, Truby said. It might just be a simple image of a cannabis flower bud.

“A lot of times, you’ll get banned for that, even when it’s not an advertisement,” he said. “They will go ahead and take down your Instagram or Facebook if they deem it not appropriate in their eyes. And the rules are very ambiguous.”

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