News and Best Practices

Using Online Marketing to Soften Section 280E’s Impact

September 6, 2016

Are you looking for ways to reduce Section 280E’s impact on your dispensary’s balance sheet? The solution could be as close as the nearest computer.

Section 280E of the Internal Revenue Code puts a punishing financial burden on your state-legal operation by prohibiting you from deducting many standard business expenses, including advertising costs, from your operation’s gross income.

Fortunately, low-cost online marketing methods can help blunt the impact that Section 280E takes on your pocketbook. We spoke with Eric Layland, president and founder of the Seattle-based marketing firm Canna Ventures, to get some tips on how to use web-based marketing strategies to save money without sacrificing results.

Website and social media content

Creating and maintaining a mobile-responsive website is one of the best ways to maximize your marketing investment. What’s the key to create results on a tight budget? “Regularly produce website content that has value to your customer base, aligns with your brand position, and share that content through social channels,” Layland said.

Creating a company website may require an upfront investment, but it yields long-term results. For instance, the content you create and share on your website has a longer shelf life than other forms of marketing. While an ad in a magazine or newspaper is visible for only a set period of time, “when you create content for your website, it lives there as long as you allow it to,” Layland said.

Your content adds value by helping develop your website’s online “footprint.” This lets search engines find and index your site. If you publish an interesting element on your website—an infographic, for example—other sites may link to that element. This in turn boosts your search engine optimization (or SEO, the techniques that help your website rank higher in online search results).

Layland added that the kind of content you create is critical. For best effect, your website should include regularly updated information that is relevant to your customer base. It should also highlight one of your dispensary’s greatest assets: frontline staff.

“For a dispensary or rec store, the budtender has a big influence on customers who place a lot of trust in them,” he said. “Creating content that highlights the budtenders and shop owners allows customers to get to know the people make up the brand.”

Layland added, “At the end of the day, a store’s reputation is really based on the employees who interact with patients and customers. They are the front lines of the operation and need to reflect the values of brand.”

Social media platforms can be a powerful way to share the content generated on your website. Keeping multiple profiles up-to-date can be time consuming, so consider assembling a team of employees to take some time every week to share and create new content. To be safe, be sure to have a policy that governs your social media activity.

Email campaigns

Email marketing campaigns “extremely valuable,” Layland said. “An organically grown email list should be the most effective marketing channel a company has.”

An email campaign is an effective way to keep in touch with customers. You can use it to inform your patrons of special discounts or as a launch point for a loyalty club that rewards members with special deals. Eventually, you can migrate your list of loyalty program members to a specialized platform.

Several point-of-sale systems, like Square, make it easy for your frontline staff to ask for and gather customers’ email information. However, building your mailing list can be as simple as handing your customers a clipboard and asking them if they’d like to add their email to your mailing list, Layland said.

Dispensary operators should be careful to avoid creating spam email that clutters customers’ inboxes, gets forwarded straight to their spam folders or, worse, invites penalties under the CAN-SPAM Act, a law that governs commercial email communication. Fortunately, specially designed platforms like MailChimp and Constant Contact offer built-in safeguards to help you avoid CAN-SPAM Act violations and guide you through the best practices of email marketing.

By Bridget Manley
Dispensary Management Today articles are for informational purposes only and should not be considered legal guidance or advice on dispensary operations. You should contact an attorney or a qualified cannabis consultant for specific compliance and dispensary/retailing advice.
© 2016 CAN Performance Group, LLC. All rights reserved.
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© 2017 CAN Performance Group, LLC. All rights reserved.