Section 280E makes marketing a non-deductible expense for plant-touching businesses, so a wasted SEO dollar hurts more here than in a normal company. Budget by giving every dollar one of four jobs: content, links, technical work, or tools.
Start With What 280E Does to Your Math
Under Section 280E of the federal tax code, a business that traffics in a federally controlled substance can deduct cost of goods sold and almost nothing else. Marketing is not COGS. Your SEO retainer comes out of after-tax money, which means a month of busywork costs you more than the invoice says. Ancillary companies — glass, packaging, software — escape this. License holders do not. That one line of tax code should make you pickier about SEO spending than any shoe store owner ever needs to be.
The Four Buckets
Almost every real SEO cost lands in one of four places. Content: writing, editing, and publishing pages that answer what your customers search for. Links: outreach, digital PR, local sponsorships, citations. Technical: fixing crawl errors, speed, indexing, and site structure. Tools: Search Console and GA4 are free, but competitor and keyword data means paying for Ahrefs or Semrush, plus a rank tracker if your agency does not provide one. If a proposal cannot tell you how the fee splits across those four, ask again.
Sequence the Spending
Order matters more than size. Technical work comes first because it is mostly a one-time cost that raises the return on everything after it — there is no point publishing onto a site Google struggles to crawl. Content is the ongoing middle. Links come last, once there are pages actually worth linking to. Front-loading link spend onto a thin site is the most common way cannabis budgets get burned.
A Worked Example
Say you run one dispensary and can commit $2,500 a month. Months one and two: put roughly half into a technical audit and the fixes it surfaces, the rest into your first content. From month three: about $1,200 to content (two deep guides or four solid pages), $600 to local links and citations, $200 to tool subscriptions, and hold the remaining $500 as a buffer for whatever the data says needs help. The exact numbers matter less than the fact that each dollar was assigned before it was spent.
Cut by Evidence, Not by Mood
Give the plan two quarters, then read Search Console. Impressions flat on the pages you paid for means a content or indexing problem, so shift money there. Impressions climbing while clicks stall points at titles and intent, which is cheap to fix. An agency that reports activity instead of outcomes is itself a budget decision. The budget that works is the one you keep re-aiming at whatever the data says is stuck.
Key takeaways
- 280E makes marketing non-deductible for plant-touching businesses, so wasted SEO spend costs extra after tax.
- Split the budget across four buckets (content, links, technical, tools) and give each a number.
- Pay for technical fixes first, content steadily, links only once pages deserve them.
- Re-read Search Console every quarter and move money toward whatever is stuck.
Frequently asked questions
How much should a dispensary spend on SEO?
There is no universal figure. Size it to your market and margins, and remember 280E raises the real cost of every marketing dollar. A small, fully assigned budget beats a large vague one.
Do I need Ahrefs or Semrush?
One paid tool is usually enough for a single operator, and it buys keyword and competitor data you cannot get free. Search Console and GA4 cover your own site at no cost.
What should the budget fund first?
Technical repairs. They are largely one-time costs, and every content and link dollar afterward returns more on a site Google can crawl and index cleanly.
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