Blind Spot: Cannabis Industry Falls Short on Communications

NEW YORK – Legal Cannabis brought in $38.5 billion in revenue in 2024. Whitney Economics estimated that figure to drop to between $29.1 billion and $29.6 billion in 2025, due to falling prices, tax pressures, and stronger competition. Sales are then forecast to recover and reach $47 billion in 2026.

Despite this scale, a new report from 5WPR, an independent PR agency based in New York, reveals that Cannabis businesses spend around 80% less on marketing than comparable consumer goods companies, when measured as a share of revenue.

This finding is at the heart of The Cannabis Communications Gap, 5WPR’s 2026 report. It identifies what 5WPR calls the widest mismatch between the need for strong communications and the actual investment in it, across any major U.S. consumer sector. The report looks at the digital advertising ban on Cannabis brands, President Trump’s December 2025 executive order to move Cannabis rescheduling forward, the mixed results of celebrity Cannabis brands, the NBA’s relaxed player Cannabis policies, and new Federal Trade Commission’s rules on influencer marketing.

The Advertising Wall

Cannabis brands cannot advertise on Google, Facebook, Instagram, TikTok, YouTube, or national TV. This is a hard structural barrier. In a sector worth nearly $40 billion, operators are blocked from the digital marketing tools that every other consumer business takes for granted.
But that ban has not led Cannabis brands to invest more in the channels they can use, such as earned media, owned content, influencer partnerships, and investor relations. The industry remains well behind where it should be in all of these areas.

The Tax Burden & What Changes When It Lifts

Now, the policy landscape is shifting fast, and the financial impact is significant. Section 280E is an IRS rule that taxes Cannabis businesses on their gross revenue, not their net income. This has pushed effective federal tax rates to 70% or higher for profitable companies. Dispensaries in Maryland alone stand to save an average of $805,000 per store each year once rescheduling is finalized.

For Cannabis communications, rescheduling has clear knock-on effects. Marketing costs would become tax-deductible. Investor relations would grow in importance as institutional money starts to look more seriously at the sector. And rescheduling itself will generate the biggest earned media opportunity the Cannabis industry has ever seen.

The report is clear, however, that rescheduling does not make Cannabis legal at the federal level. State regulations will continue to vary and will still govern how operators run their businesses day to day.

What Celebrity Brand Data Reveals

One of the report’s strongest insights comes from looking at celebrity Cannabis brand sales. Khalifa Kush made $50 million in 2024. Snoop Dogg’s Death Row Cannabis made $2 to $3 million and ranked 20th among celebrity brands. Both are backed by figures closely associated with Cannabis in popular culture. The $47 million gap between them is the clearest proof that name recognition alone does not build a brand.

The difference comes down to strategy. Khalifa Kush was developed over more than ten years with genuine product roots, then scaled through distribution deals with Trulieve and Cookies, which brought real communications support alongside wider market access. Death Row Cannabis, like many celebrity Cannabis brands, relied on a once famous name of Canopy Growth as a substitute for brand strategy. That approach rarely works.

The FTC Risk Most Brands Are Ignoring

There is a growing legal risk that many Cannabis operators may not realis they are carrying. The FTC updated its Endorsement Guides in October 2024. These rules now hold brands responsible for influencer content, including posts the brand never saw or approved. Civil penalties in 2025 can reach $53,088 per violation.

The report estimates that a campaign using ten influencers, each posting twenty times, with no proper compliance in place, could expose a brand to up to $10 million in fines. Cannabis brands use influencer marketing more than most consumer sectors, largely because it is one of the few tools available to them. Yet, most are running these programs without written agreements, documented claims, age-gating, or legal review. The updated FTC rules now require all of these.

What the NBA’s Policy Shift Signals

The NBA removed Cannabis from its list of banned substances and, through its 2023 collective bargaining agreement, now allows players to invest in and promote Cannabis brands, with some restrictions. This is a meaningful cultural signal. It has created a new type of athlete-brand partnership built on authenticity, not just endorsement. For Cannabis operators with the right infrastructure to act on it, the communications opportunities are significant. The report finds that most have not yet done so.

A Critical Window Is Opening

The central argument of the report depends on timing. Brands that build their communications foundations in the next 18 months will gain an advantage that later arrivals cannot easily buy their way into. This is how category dynamics typically work: brands that build strong media presence, institutional investor relationships, and consumer trust before a market fully matures tend to hold onto those advantages long after money becomes available to all competitors.

What makes Cannabis different is how quickly these forces are converging. The removal of 280E, the rescheduling progress, access to institutional capital, and the normalization signals from sport are all happening in the same 12-to-24-month window. MSOs and highly-capitalized brands have been holding back on expansion and marketing plans that were simply not affordable under 280E. When that spending is released, smaller operators without established communications infrastructure will find themselves in a far more competitive environment than the one in which they grew.

The Bottom Line

The 5WPR report is not a survey or a forecast. It is a diagnosis. The advertising ban is real. The 280E tax burden has been measurable for years. The celebrity brand sales data is on the public record. What the report does is bring these known facts together into a single clear picture, at exactly the moment when the financial constraints that have kept Cannabis communications underfunded are about to ease.

The question for operators is whether they use the freed-up capital to build their communications capability or simply expand their physical footprint without investing in their brand. That choice will be one of the most consequential strategic decisions in Cannabis for the rest of this decade.

Cannabis businesses have been in survival mode for a long time. Some may not recognize a genuine growth opportunity when it arrives. Those that do, will be much harder to displace once the market matures.

KEY: If you experience any communication challenges, please email the team here at HCN via [email protected] to fill your B2B networking gap in Cannabis.