Burgeoning marijuana companies are seeking to corner their share of the market and lure in customers when recreational usage officially becomes legal on Oct. 17.
Those companies are running into a marketing roadblock, however, due to restrictions included with the Cannabis Act.
For instance, celebrity naming schemes and endorsements have both specifically been given the axe due to Part 1, Section 17 of the Cannabis Act. That means no more Justin Trudope Afghani Kush, and is expected to cause setbacks for brands like Leafs by Snoop, which is endorsed by Snoop Dogg.
Celebrity names are just the tip of the iceberg, however, as the Cannabis Act further prohibits promotions, mass advertising, sponsorship, and contests that correlate marijuana usage to an attractive lifestyle.
Some companies have been working around or outright ignoring that rule, which has led to warnings and an impending crackdown at the federal level.
Health Canada recently announced that five warnings have been sent out to various cannabis companies since July in regards to violating advertising rules.
According to Health Canada, the warnings require that these companies – who were not identified by name – take “immediate corrective measures” to bring their activities into compliance with the current law.
The number of advertisements and promotional events doesn’t appear to have slowed down at all despite the warnings, as companies walk a fine line with differing interpretations on the specifics of the law.
According to a report from Ottawa Citizen, cannabis-related companies feel they are “providing information, not advertising, or promoting their company, not cannabis,” which may allow them to skirt the letter of the law.
Such activities aren’t new to the industry, with grey market dispensaries existing across the country for decades. Whether such quasi-legal or outright illegal behaviour will continue to be tolerated following legalization remains to be seen, and may result in new legislation to further define advertising rules.
According to a Health Canada statement, starting Oct. 17 the cannabis industry will be prohibited from:
- Sponsoring events such as music festivals
- Engaging in promotional activities at events, booths, and pop-up venues
- Publishing advertisements about cannabis on company websites and social media platforms
The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Grizzle hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.