Dispensaries: Think Twice Before Committing to Annual Contracts for SMS Marketing

September 15, 2023

In the bustling world of cannabis retail, SMS marketing has emerged as a vital communication strategy. With mobile phone ubiquity, text messages promise dispensaries an almost unparalleled reach. But as dispensaries decide how to engage with SMS services, there's one trap they should be wary of: annual contracts. Here's a closer look at why dispensaries should think long and hard before locking themselves into a year-long commitment.

1. The Ever-Changing Regulatory Landscape:

The cannabis sector is renowned for its fluctuating regulatory environment, often dictated by state or local ordinances.

  • Commitment Issues: Annual contracts can tie dispensaries to a specific marketing approach or content style. If regulations change, dispensaries might be stuck with an SMS strategy that's outdated or, worse, non-compliant. The potential legal and financial ramifications can be severe.

2. Deliverability Dilemmas:

Not all SMS services are created equal, especially when it comes to message delivery.

  • Locked-In, Messages Locked-Out: Some providers with annual contracts have been reported to suffer from deliverability problems. Imagine being bound to a service where a significant percentage of your messages don't reach your customers. This ineffective communication can lead to lost revenues and customer trust.

3. The Need for Nimbleness:

The cannabis market is dynamic. New products, strains, and promotions are regularly introduced.

  • Stagnant Strategies: An annual contract can restrict dispensaries from modifying their SMS campaigns in response to market trends, limiting their marketing effectiveness.

4. Costly Commitments:

Upfront, an annual contract might seem cost-effective, but there are hidden pitfalls.

  • Sunk Costs: If the service turns out to be subpar or if the dispensary's needs change, they're still on the hook for the entire contract amount. On the contrary, a flexible payment model allows for adjustments based on actual utility and satisfaction.

5. Innovation at a Standstill:

Technology and marketing tools are continually evolving.

  • Outdated Tools: Being tethered to an annual contract might mean sticking with outdated tools or platforms, while competitors using more flexible services can quickly adopt the latest innovations.


In an industry as dynamic and tightly regulated as cannabis, flexibility is paramount. Dispensaries need the ability to adapt swiftly to changes, whether they're in market trends, regulations, or technology. While annual contracts might seem appealing for their seeming simplicity and potential cost savings, the hidden costs — both tangible and intangible — can be detrimental. Dispensaries should prioritize flexibility, reliability, and performance when choosing their SMS marketing partners.