The first state to legalize recreational cannabis, Colorado has become an icon within the national legal cannabis market. Since Coloradans voted to pass Amendment 64 in 2012, Colorado’s cannabis industry has seen tremendous growth and success. With over $10 billion in sales and billions more in collected tax revenue, marijuana has had a positive impact on Colorado’s economy.
Per the Denver Post, 2020 was a record-breaking year for Colorado cannabis sales with a reported $2.2 billion in sales, including over $226 million in sales in July 2020 alone. This comes with an increase in per-visit customer spending. According to data compiled by Headset and cited by the Denver Post, the average Colorado dispensary visit included $58.55 of spending, an increase of 19.6% from the previous year.
Certainly, the circumstances created by the pandemic are unique and, hopefully, mostly behind us, but the growing interest in cannabis it exposed are sure to remain. As pandemic-related restrictions continue to ease, cannabis businesses should remain optimistic that the market will continue its boom.
In 2021, the Colorado cannabis market will be propelled by a growth in wide-scale availability. The introduction of delivery services will complement an already dense dispensary network, providing accessible cannabis to an even larger segment of Colorado residents. In April 2021, the Denver City Council approved a measure to allow third-party vendors to delivery weed to dispensary customers.
The Denver City Council also passed a bill that, among other measures, removes the cap of 220 recreational dispensaries in the city. This should pave the way for the emergence of new dispensaries around the city.
Between the new dispensaries to come and the rise in delivery options, Denver cannabis consumers will have more convenient access to recreational marijuana than ever. If history is any indicator, the developments in Denver are a sign for similar measures to follow in other Colorado towns and cities.
Further, the return of cannabis tourism is likely to accompany the easing of COVID restrictions, another positive development for business in the cannabis industry.
Prior to the pandemic, 6.2% of Colorado travelers cited legal cannabis as a primary reason for their visit, according to data from the Colorado Tourism Office, and in 2018, roughly 15% of tourists visited a dispensary. With a dramatic rebound in tourism imminent, cannabis retailers and dispensaries should experience a spike in business from non-locals.
With the state enjoying hundreds of millions of dollars in annual tax revenue from legal cannabis sales, there is little concern for the introduction of regulations that limit sales potential. While the Colorado State House has seen bills proposing regulation intended to restrict the quantities accessible to young cannabis consumers, it is unlikely to influence overall sales significantly. The future is bright for Colorado’s cannabis market.
With sales so up, it may seem like success is a given for Colorado’s cannabis retailers. However, perhaps counterintuitively, the rise in sales corresponds with a stiffening in competition. Successful firms are expanding while others fall behind. Meanwhile, the introduction of new dispensaries will make seizing a considerable portion of the market even more difficult.
In order to make it in the Colorado cannabis scene, businesses must differentiate themselves among their competition and give customers a reason to shop and spend with them rather than somewhere else. Cannabis marketing can take many forms, but, more than ever, an effective digital marketing campaign is crucial to broader success.
From content marketing to old-school print advertising and everything in between, cannabis marketing takes many forms. However, cannabis advertising is full of regulations and restrictions which vary between states.
In Colorado, regulations cover everything from print to radio and internet. Most of these regulations are included in the Colorado Department of Revenue’s Marijuana Enforcement Division’s “Retail Marijuana Rules” (also known as 1 CCR 212-2).
The two guiding principles of the marketing regulations found there are:
Many regulations are in place to make sure advertising is both catered to a 21+ audience and avoids spaces frequented by minors. For instance, marketing cannot include anything that may be understood as appealing to minors, such as cartoon characters.
Further, advertising, including digital marketing, can only be placed where the advertiser has good reason to believe no more than 30% of the traffic is from minors. This regulation poses the biggest challenge for cannabis marketing.
Dispensary marketing, or any other marketing in the cannabis industry, needs to be particular in where they are advertising. Websites should require age verification to restrict minors, and public-facing advertising, like billboards, is best avoided altogether. Compliance failures may lead to legal issues or lawsuits.
With springbig’s marketing suite, businesses can take a holistic approach to targeting and retaining their clientele, certifiably enhancing their chances of success in a crowded market, all while avoiding the stress of compliance.
Our 360 Solutions™ platform ensures you are compliant by staying on top of all relevant regulations, even as they change, just so you do not have to. Dispensary marketing can be stressful. We take the edge off.
Considering the aforementioned spike in per-visit spending across dispensaries, there is no better time to adopt springbig’s loyalty program, which rewards your customers with a point-per-dollar rewards program. Rather than other rewards programs which reward customers on a point-per-visit “punch card” basis, the springbig loyalty program incentivizes higher-paying visits and rewards high-spending customers. With rewards racked up and easily accessible in their digital rewards wallet, customers are inclined to return to your dispensary instead of the competition – and have been proven to do so.
With springbig’s marketing suite, expect results and a proven R.O.I. to help your business thrive.
To show you just how effective text message marketing can be, we analyzed the marketing performance of Igadi, a dispensary chain in Colorado. We looked to see the increase in spend on days when text messages were sent, the ROI, and how long it took to gain ROI.
increase in spending on days when a text message campaign is sent
ROI for every dollar spent on text messages
to gain a ROI on monthly subscription