10 Cannabis Industry Basics to Know Before You Email License Holders

One of the biggest mistakes businesses make when sending email marketing campaigns to cannabis license holders is sending messages that people don’t want.

However, there are so many companies trying to convince cannabis license holders to buy their products and services today – and so many messages being sent to people every day – that the days of simply sending an email message and expecting people to contact you and buy are over.

To get noticed in email inboxes today and build the kind of brand awareness and trust that leads to purchases, you need to show license holders that you know who they are and understand their challenges, problems, needs, and goals.

In other words, you need to personalize the content of your email marketing messages to speak directly to hyper-targeted lists of people.

In the cannabis industry, the first step email marketers must take to have a chance at success is educating themselves about how the cannabis industry works in the markets where they’ll promote their brands.

Below are 10 basics that you must understand before you send any email marketing campaigns to license holders.

1. Cannabis and Hemp License Holders Are Not the Same

Yes, cannabis and hemp come from the same plant, but no, they are not the same industries. The cannabis and hemp industries have different laws and many different players. When you send email marketing messages that address license holders in both industries, those messages are unlikely to perform well.

Why? Because cannabis and hemp license holders don’t like to be lumped together. In fact, when you do lump them together, they’re likely to get annoyed that you didn’t bother to take the time to get to know their market and unique needs.

As a result, they’ll either mark your message as spam or negatively engage with it by deleting it without opening it, ignoring it, or blocking you as a sender. All of these negative reactions will hurt the deliverability of your future campaigns, which you don’t want to happen.

Therefore, segment your lists so cannabis and hemp license holders are separate and send them personalized messages written specifically for their industries. Your results will be much better!

2. No Two States are Alike

Cannabis industry laws are different in every state, so you need at least a basic understanding of how each marketplace works where you plan to promote your brand.

An example would be a company that emails cannabis cultivation license holders in all states promoting a product for outdoor growers. Unfortunately, some states don’t allow outdoor growing, so sending a campaign to people in states where only indoor growing is allowed would hurt the results of the sender’s campaign today as well as their future campaigns.

As you learned in #1 above, when people negatively react to your email marketing campaigns, more of your future campaigns will go to spam rather than the inbox. With that said, be sure to only send messages that are relevant to recipients based on state laws.

3. Laws Change Frequently

States change cannabis industry laws all the time, and now, with more states legalizing through legislation, we’re seeing significant laws changing frequently. It can be hard to keep up, but to get the best results from your email marketing investments, you have to make an effort.

Cannabiz Media’s daily news alerts help. As a Cannabiz Media License Database subscriber, you get daily news alerts delivered directly to your email inbox. You can also log into the platform and read through a wide variety of curated industry news to quickly learn about new changes as they happen.

4. Vertical Integration – Yes, No, Maybe

Vertical integration refers to whether or not a state requires (or allows) an entity or person to hold multiple licenses across the cannabis supply chain.

For example, full license integration is required in some states, which means a license holder must have a cultivation, manufacturing/processing, and dispensary/retailer license. In this case, the license holder controls the cannabis product from seed to sale.

In other states, vertical integration is allowed but not required or could be required for the medical market but not the adult-use market or vice versa. In fact, integration could be optional, and in other states, vertical integration of any kind is not allowed.

These distinctions are very important and understanding what each state requires or allows will help you create better email marketing strategies and ensure you’re targeting the right license holders in each state.

5. Business Vary in Size – A Lot

Businesses in the cannabis industry come in all sizes – from small businesses with one to five employees to large companies with more than 200 employees. You could be emailing companies with a single license and facility, single state operators (SSOs) with multiple licenses and facilities in one state, or multistate operators (MSOs), which are bigger companies in the cannabis industry that hold multiple licenses in more than one state. 

Recently, there has been a growing number of acquisitions by MSOs that want to get a foothold in new states, and some MSOs have even gone public. If your target audience is MSOs, then you’ll need to do some homework to identify them and understand what licenses they currently have as well as the licenses they’re trying to get. 

Just as you wouldn’t send the same message to a small company with one license and one employee that you would to an SSO with 5 licenses and locations in a single state, you don’t want to send the same message to all MSOs. They’re not all the same and shouldn’t be treated the same in your email marketing campaigns. For example, an MSO with two licenses in two states likely needs to hear different messages from you than an MSO with 156 licenses in 13 states.

6. License Types Vary from One State to Another

Each state’s licensing process and structure is unique, so both license nomenclature and what license holders are allowed to do varies from one state to another.

For example, many states offer a manufacturing license to businesses that turn cannabis plant matter into the products sold in dispensaries and at retail storefronts. However, some states refer to this license type as a processing license.

Another difference you’ll see from one state to another is what laws allow license holders to do or not do. For example, a dispensary in one state may be allowed to deliver medical cannabis to patients, but a separate delivery license may be required in other states.

In addition, some states have separate distributor licenses while others do not, and some states have unique license types that don’t exist in other states at all, such as microbusiness licenses and consumption licenses. You need to understand these nuances so you send the right messages to the right people!

7. All Product Types Are Not Allowed in All States

Just because cannabis is legal for medical and/or adult use in a state doesn’t mean that all forms of cannabis are allowed. In fact, there are states that still don’t allow some of the most popular forms of cannabis.  

If you don’t understand what companies are allowed to produce and sell, then you could send an email marketing campaign to completely uninterested audiences who are likely to delete it or mark it as spam. You don’t want that to happen!

As an example, a cannabis packaging company could send a message promoting its edibles packaging products to all 50 states. However, some states don’t allow edibles, which means the message will be irrelevant to people in those states, and they’re more likely to interact negatively with it.

8. The License Application Process Can Be Very Long

The timeline to apply for and obtain a cannabis license can be very long. All states are different, and it’s not unheard of for the process to take years. Some states fast-track things, but often, it takes at least a year from the time the process starts until applications are approved.

If applicants who didn’t win licenses are unhappy with the results, they may file lawsuits challenging the process, and the timeline will get even longer.

Suffice it to say, a license could stay in the applied status for a long time and even after a state approves applications, those licenses could stay in a pending status for many more months (or longer) before business operations are actually up and running.

9. Legal Does Not Mean Active

When a state legalizes medical or adult-use cannabis – either through voting or legislation – that doesn’t mean the state’s legal cannabis market will be up and running immediately. As discussed in #8 above, the application process can take a very long time, but before applications are accepted, the legal cannabis program must be developed.

The people in charge of creating the laws, rules, and everything else that goes into a legal cannabis program could take years to finalize everything before applications for business licenses are accepted. Some states have sped up the process in the past, and often, when a state already has a medical program in place and then legalizes its adult-use cannabis, the program development process is usually quicker.

However, don’t expect droves of new customers when a state legalizes. It will take some time before the market is actually active and sales begin.

10. Local Rules Can Change Everything

In many states, local rules trump state rules related to cannabis. For example, some states allow local jurisdictions to ban licensed cannabis businesses from operating within their borders, and others allow local jurisdictions to create zoning laws that make it impossible for cannabis license holders to operate there.

Local rules related to real estate, advertising, zoning, building, taxes, and more can affect where and how cannabis license holders can do business within local municipalities.

For the most part, it’s nearly impossible for email marketers to keep up with all of these local rules, but depending on the type of campaign you’re sending, you may need to invest some time into specific research to ensure your campaign has a chance to deliver the results you want and need.

Key Takeaways About Email Marketing to Cannabis License Holders

Your email marketing results will improve if you take the time to learn about the cannabis industry. Start with the 10 basics discussed above. 

Aside from educating yourself before you start sending email marketing campaigns to cannabis license holders, you should also work with email marketing experts who understand the nuances of the industry. 

Furthermore, you should use a reliable license holder database and email marketing platform to confidently connect with the right people. You can get it all with the Cannabiz Media License Database. Schedule a free demo and see for yourself!

Originally published 4/27/21. Updated 3/18/22.

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