Cannabis marketers enjoy summer of schmooze ahead of legislative crackdown
Pot companies exploit a once-in-a-lifetime marketing opportunity ahead of government restrictions
Canadians will be surrounded by the logos of new recreational cannabis brands at a variety of fun events this summer as pot purveyors are exploiting a once-in-a-lifetime chance to market their products before government restrictions fully kick in.
At recent concerts by both classic rockers Jethro Tull and rap superstar Kendrick Lamar, banners bearing the Tweed logo were everywhere at Toronto's Budweiser Stage. Tweed is the recreational brand of Canopy Growth, a marijuana company based in Smiths Falls, Ont.
Alberta-based Aurora Cannabis is inviting music fans to enter a ticket contest to see free shows by Kings of Leon, The Cult and Sam Roberts, among others, at venues across the country.
And then there's Up Cannabis and members of the Tragically Hip, which recently staged a music and lifestyle event for media in the countryside outside of Toronto, where bassist Gord Sinclair unveiled Up's new strains of cannabis — named for the band's songs.
"Fifty Mission Cap, or 50 MC, as we're calling it," Sinclair said. "[It] will get you flying high quickly, then it levels off."
But once the Cannabis Act comes into force on Oct. 17, this type of promotion will be prohibited. The government is placing strict regulations on how cannabis can be advertised or marketed — just as it does with alcohol and tobacco products.
Building brand recognition
"It's a very strange time right now," said lawyer Matt Maurer, who runs the cannabis practice at Bay Street law firm Torkin Manes and works with several licensed producers.
At the moment, he said there's nothing prohibiting companies from firing up their marketing machines.
"Certainly there's something to be said for building brand recognition between now and October, so that when you do have to pull back from these types of advertisements, you've already built up a whole bunch of brand recognition and goodwill," he said.
Tweed is casting its net well beyond the music scene.
"We're at basically every Pride event across the country, and we'll be at the Calgary Stampede for our Western friends," said Tweed's marketing director, Amy Wasserman. "We have about 250 events that we've committed to throughout the summer."
In an email, Health Canada confirms that the Cannabis Act prohibits "several types of promotional activities altogether." They include:
- Promotion through sponsorship of people, events or buildings;
- Promotion through any testimonials or endorsements;
- Promotion using the depictions of persons, celebrities, characters or animals.
Crackdown coming
Wasserman said she believes that "absolutely there will be a crackdown" after Oct.17, but said that for now, the company is staying within the law.
"I never thought as a marketer I'd be so buddied up with our legal team and our regulatory department," she said with a laugh.
Members of The Hip are confident they aren't doing anything wrong.
"We're not promoting it, we're promoting the safe use," said guitarist Rob Baker. "I would never encourage someone to go out and try marijuana if they don't want it. If it's not something you want, don't do it."
Given that most consumers have next to no familiarity with the recreational brand names that will hit shelves in retail stores across the country this fall, Maurer believes a case can be made that these sponsorships and celebrity relationships serve a legitimate purpose.
"If we're trying to get rid of the black market, let's let the general public know who we are, what our brands are," he said. "Let's build an association."
In a statement, Health Canada said while advertising of cannabis is prohibited, "licensed producers are permitted to provide basic information to prospective clients, such as their brand name, proper or common name of the strain, price per gram, cannabinoid content and the company's contact information."
'It ain't the demon weed'
As for promotional activity, such as sponsoring concerts or giving away tickets, the department has established "a dedicated unit and resources to ensure that the promotion prohibitions under the Act will be respected." Fines for non-compliance can run as high as $1 million. Fines related to misuse of advertising go as high as $5 million.
Unlike alcohol and tobacco — where rules were tightened over time, as the health and social implications of the products became better known — the legalization of cannabis offers a different scenario.
This could be an opportunity to start out strictly, and possibly adjust as the market and consumer behaviour develop.
"I think our role is going to evolve, I think legislation is going to evolve, as people realize it ain't the demon weed," said the Hip's Gord Sinclair. "People will figure that out fairly quickly."
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