Plan Your 2026 Marketing Budget With These Tips
Budget season is upon us once again. While other people are decorating their houses and making holiday shopping lists, business owners are crunching the numbers and getting ready for all that 2026 will bring in terms of budgeting.
In the cannabis industry, our marketing challenges are tougher than others, but — through expert planning — there are always ways to make it through.
The global cannabis market is projected to reach 444.34 billion by 2030, according to Fortune Business Insights. If you want to be a part of that phenomenon, you have to plan your yearly budget ahead of time.
Your Cannabis Business Needs a Strategic Marketing Budget
If you’re like most cannabis businesses, you’re probably not spending enough when it comes to marketing. Since the cannabis industry is still in its infancy, it’s taking businesses a moment to catch up to the fact that, to make money, you have to spend money. Just because you have high demand for your product doesn’t mean you can skimp on marketing — especially when competition is high!
Here’s where we stand right now when it comes to spending: Cannabis businesses only spend about 5 to 8% of their annual budget on marketing, and across all industries, marketing spend is, on average, 6.4 to 9.5% of revenue.
When it comes to marketing, Cannabis Digital Solutions’ Director of Client Services, Krystal Vivian, knows about strategy.
“The cannabis market in Michigan is extremely saturated right now,” she says. “But that doesn’t take away the importance of marketing investment. Consumers need to know why they should choose your dispensary over others — and businesses need to make sure their message is showing up where consumers are spending their time.”
A Growing Marketing Requires Investment
Just because the market is huge doesn’t mean your business is automatically huge. A good example we like to use is the wine industry — there’s a good chance that many people you know enjoy wine. There’s a high demand for wine as a product, but that doesn’t mean that every winery is successful (especially without a marketing budget).
Since the cannabis market is rapidly expanding, it’s up to you to position yourself strategically within it. You achieve that by investing in your brand, educating your customers, and advertising your unique products.
How Much Should My Budget Be?
Understanding the maturity of your business and your growth goals for the coming year is essential when creating your budget.
Are we talking about an established dispensary that’s looking to maintain its market share, or is your business new on the scene and trying to make a splash in its competitors’ pool? The answer matters.
Factors That Influence Your Budget
Cannabis businesses should generally aim for 3 to 9% of projected sales to be spent on marketing, according to Upmetrics. That’s the umbrella number. Getting more specific, established businesses should plan for 5 to 7% and new businesses entering new markets should shoot higher, at 8 to 12%.
The percentage you land on between 3 to 12% depends on several factors that are unique to the cannabis industry and your business itself.
New businesses should invest more in their marketing strategy to increase brand awareness and customer trust. Established dispensaries with a loyal customer base don’t have to spend as much to gain awareness, but they still need to spend enough to remain top-of-mind for their patrons.
How much you spend depends on:
- The maturity level of your business
- If your dispensary has new locations opening (geographic expansion)
- How competitive your local market is
- Compliance requirements (of course)
Components of Your 2026 Marketing Budget
Digital marketing is your not-so-secret weapon. By now, it’s more than a strategy; it’s a crucial requirement. The most successful brands you know are taking full advantage of digital marketing and all that it entails.
Traditional marketing channels are still limited for cannabis brands thanks to federal regulations, and though digital has rules too, there is much more freedom there for cannabis businesses.
Digital Brings About the Best ROI
You’ve probably heard of the cannabis brand Kiva. Do you know why you’ve heard of them? They quadrupled their marketing budget from 2024 to 2025, and now they spend 30 to 40% of their marketing dollars on digital alone.
The best strategies to spend digital marketing budget on:
- Display ad targeting
- OTT/CTV advertising
- Geofencing
- Social media management
- Content creation/educational resources (like the blog you’re currently reading!)
- Search engine optimization
- Website development/optimization
What Channels Are Compliance Friendly?
You might have shied away from spending money on digital in the past because navigating the compliance restrictions on social media can feel like a minefield. But we promise, it’s less scary than it seems. You just have to know how to play by the rules.
The key is finding platforms that offer the best combination of reach, compliance, and ROI.
“Don’t let platform restrictions limit your creativity,” Vivian says. “You just have to think outside the box and be open to different formats. Take some time to scroll through Instagram Reels and you’ll see incredible content made by cannabis creators that never even mention the word cannabis.”
Many cannabis brands find success posting on social media not by selling products or showcasing their inventory, but by sharing funny content about the cannabis lifestyle using euphemisms that all cannabis users know. Don’t underestimate the power of a good meme!
However, compliance goes beyond social media. Display ads can open up a whole new world for your cannabis business, as they use a consumer’s online behavior to target people as they’re shopping on websites and apps. These ads follow your audience as they move through their digital journey, keeping you top of mind with people who are most likely to convert.
Reaching Customers Where They Are
If you want to get your ads in front of consumers on their smart TVs, gaming consoles, and streaming apps, you need to take advantage of OTT/CTV advertising — the ads you see while streaming your favorite TV shows on apps like Hulu and Peacock.
These unskippable, streaming ads play in the middle of what people are already watching. Video allows you tell a story build your brand at the same time. As more people “cut the cord” of cable or never subscribe to cable at all (especially younger millennials and Gen Z), streaming ads ensure that you’re marketing where your customers are spending their time.
Use Your Customers’ Physical Location
Geofencing targets your customers based on their real-life behavior. Geofencing is a strategy that places a virtual fence around specific locations, like a nearby gym or a competitor’s location. When people pass through that fence, they will get served display ads or OTT/CTV ads on their device for the next 30 days.
When using geofencing, you can also measure foot traffic conversions to see how many people visited your location after they were delivered your ad.
The Power of Loyalty Programs
Your existing customers are just as important as the new ones. On top of that, it costs much less to retain a customer than it does to acquire a new one!
In the cannabis industry, loyalty programs are crucial components to educating and building customer trust. This strategy is a great investment going into 2026 because it fosters engagement and connection with your existing customers, encouraging them to return — especially when you take advantage of personalization and segmentation.
Best Planning Practices For 2026
Before you put a single dollar anywhere, it’s important to outline what success looks like for your business. Don’t create your 2026 marketing budget by what feels right or by judging what worked in 2025.
Your budget should be tied to specific and measurable outcomes. After you’ve delineated your goals, work backwards to see what you should prioritize to reach them – your budget should reflect those priorities.
Don’t forget to leave room for testing and flexibility!
“The cannabis industry shifts so fast,” says Vivian. “What works today might not work six months from now, so be prepared to be flexible throughout the year. Your plan should be written in pencil, not pen.”
Keeping some budget aside to take advantage of trends when they appear can give your business the competitive edge you need to set yourself apart in the cannabis industry.
Your Marketing Budget in 2026
Cannabis businesses that dominate the industry in 2026 won’t be those with the biggest budgets; they’ll be those with the most strategic budgets. You can be one of them as long as you understand your industry, focus on digital first, and incorporate flexibility into your budget plan.
Your marketing budget is about simply spending money — it’s about investing money into your business’s future and building relationships with customers who will choose your business time and time again.
For help on how to make your investments count, get in touch with our team at Cannabis Digital Solutions today.
