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Dazed and confused: Canada’s approach to pot marketing

Powered By Canadian LawyerBusiness & Legal Issues||Written By Steve Szentesi
Dazed and confused: Canada’s approach to pot marketing

Back in the day, when you wanted to learn about the different kinds of pot, you did it the old-fashioned way – by asking your friends or your dealer. They’d say, “this is good stuff,” “this is strong stuff,” “this is the real BC bud” and so forth and so on. You know, good old word-of-mouth marketing.

What were you really smoking back then? Where did it really come from? Who knows? Who cared? And your pot certainly didn’t arrive in plain, secure packaging, with mandatory health warnings from shops with opaque windows and cameras.

Soon, however, recreational pot will be legal and an entire recreational industry unleashed in Canada making us a world leader in liberal drug policies together with – uh – Uruguay. Well, like many other Canadian markets, pot will be kind of legal with strict restrictions on the growth, distribution, sale, use and marketing. Legal in the Soviet supermarket sense.

As for cannabis marketing, the federal government’s plans have been emerging over the past several months. First, the Cannabis Act received Royal Assent on June 21, 2018. More recently, Health Canada issued their planned, 218-page Cannabis Regulations. The new legislation and regulations will both come into force on October 17, 2018.

These two sets of rules will impose detailed and restrictive requirements for the marketing, packaging and labeling of cannabis and cannabis accessories, like rolling papers, holders, pipes, bongs and vaporizers.

In general, Cannabis Act marketing restrictions will prohibit promotion to youth, false or misleading claims, sponsorship, testimonials or endorsements, using depictions of persons, characters or animals or engaging in lifestyle-type marketing. Cannabis promotion using foreign media will also be prohibited, presumably, at least in part, to prevent indirect marketing to Canadians.

So no cute toking Telus-type animals, ‘Suntory-Time!’-style advertising with celebrities holding their favorite strain or wraparound billboards at hockey games or sporting events. Out, out and out. Want Snoop Dogg or Madzilla (the Instagram weed model) to do some social endorsements for your bud brand? Not in Canada apparently.

Another key restriction that cannabis marketers need to be aware of is the requirement, once the new law is in force, to retain for two years and provide to the Minister if requested, packaged samples and copies of promotional materials.

The packaging and labeling rules will be similarly strict and will require plain packaging, mandatory health warnings, display of a cannabis symbol and prescribed product information, like the brand name, lot number and packaging and expiry dates. Strict requirements will also be imposed for logos, colors and branding. 

Similar to tobacco advertising requirements, the Cannabis regulations will require packages to display a range of cheery warning messages such as “WARNING: Regular use of cannabis can increase the risk of psychosis and schizophrenia” (and which will also have to be periodically rotated). These warnings alone may be enough to make some want to light up a blunt.

So what kind of advertising will cannabis marketers be able to engage in once the new rules are in force?

The Cannabis Act will allow so-called ‘informational promotion’ – for example, direct marketing, in-store marketing or telemarketing, provided it is not directed at minors. In-store marketing will, however, be limited to information relating to a product’s availability and price. Product placements will also be technically possible, for example, in films, though the Cannabis Act will prohibit any consideration for placements likely rendering this marketing strategy effectively pointless for producers.

One positive note for cannabis marketers, however, will be the so-called ‘swag’ exception. The Cannabis Act will allow marketers to display brand elements, like brand names, trademarks or logos, on products other than cannabis or cannabis accessories. So in theory, things like branded toques and shirts will be permitted. However, like the more general cannabis marketing restrictions, ancillary products cannot be directed at minors. As such, it’s pretty safe to say that pot branded cereal or toys isn’t going to work.

Despite the upcoming Cannabis Act restrictions, several companies appear to have been exploring the boundaries of pot marketing in Canada, which recently led to Health Canada issuing a warner to cannabis marketers on July 13, 2018. 

In its statement, Health Canada expressed concern with the marketing of several medical pot licensees, particularly music festival sponsorships. Health Canada stated that it had “made its position regarding event and other corporate sponsorship and other promotional activities abundantly clear” and that it would take “every possible step to bring [licensees] into compliance.”

Media had been reporting that several cannabis companies were sponsoring music festivals, which may have been an attempt to build greater awareness of their brands before the Cannabis Act came into force.

So with less than three months to go until the Cannabis Act is in force, brands and marketers are likely working through the gaps in the legislation to find creative ways to market their products. While this may include point-of-purchase, informational and swag marketing strategies, it remains to be seen what other avenues brands and their marketers find to distinguish themselves from their competitors. It also remains to be seen how aggressively Health Canada will enforce the new rules and what types of marketing violations it will focus on.

In the meantime, in the words of Madzilla the Instagram weed model, “go smoke a blunt and be chill.”