How Brands and Retailers can Prepare for the Anticipated Marijuana Rescheduling

The air is still buzzing from the Drug Enforcement Administration’s (DEA) historic announcement of their plans to reschedule marijuana, and rightfully so! The reclassification from a Schedule I to a Schedule III controlled substance is a major step forward for the cannabis industry at-large, and it’s worth celebrating, and preparing for. And while the exact timeline of the final Congressional ruling is under a wide speculative timeline, experts predict it can be made in as early as a couple of months to several years from now. In the meantime, cannabis operators should plan for what’s ahead to be better positioned to fully capitalize on the market changes we’re going to see as the process unfolds.

Decide how you will make the most out of the increase in cash flow

One of the biggest implications of the rescheduling is the lifting of an Internal Revenue Service (IRS) code known as 280E. With the change in legislation, cannabis businesses expect to be able to take normal tax deductions afforded to other industries on selling, general, and administrative expenses. With that said, the ability to deduct marketing and advertising costs themselves is the pending game changer.

By investing this newly accrued cash flow into advertising practices that help acquire new customers and build loyalty and frequency among existing ones, brands and retailers can multiply their dollars. On average, operators who advertise with Surfside see anywhere from a 3 to 10x+ return on their ad spend (ROAS).

Retailers in particular have a bonus opportunity through Surfside Commerce Media, so now is the time to make sure websites are set up to enable brand-sponsored advertisements in order to capture the ad revenue that will flow from brands.

Start amplifying media presence sooner than later

When the rescheduling goes into effect, we expect a rush of brands and retailers jumping on the media bandwagon. When channels get more saturated, it can require higher levels of spending to cut through the noise and establish top-of-mind awareness.

So, do the homework now and get in front of customers when it’s more attainable to secure a high share of voice. This is a particularly good time to be activating on channels less chartered, such as video and audio, where advertisers are poised to captivate consumers at-scale with lower levels of competition. Expect the early effort to pay major dividends in growing and later defending market share.

Surfside has all the solutions marketers need to connect with new customers, build lasting relationships with existing ones, and take their businesses to the next level. If you’re ready for what’s next, contact us today to receive a custom media strategy that will allow you to maximize the potential impact of this exciting milestone.