Working Around Laws for Cannabis Advertising in Canada
Recreational cannabis is now legal in Canada for adults 18 years of age and above, but folks that are under the impression that Canada is now one big pot party may be surprised to learn that there are restrictions on consuming pot in certain provinces as well as strict laws regarding cannabis advertising in Canada.
Canadian provinces and local communities have the ability to restrict cannabis use under the new law called the Cannabis Act, so depending on what province you live in, consuming cannabis could still be illegal even if you are 18. The Cannabis Act allows adults 18 years of age and above to buy, cultivate, possess, use, and share up to 30 grams of cannabis legally. Some provinces have set the legal age of cannabis consumption to 19 years of age.
The new law also has strict cannabis advertising laws that are meant to protect public health, eliminate profits black the market and drug cartels, and keep juveniles from obtaining cannabis. Companies that sell cannabis products are not allowed to utilize print ads, commercials, celebrity endorsements, promote contests or sponsorships, or advertise their prices for cannabis products.
Packaging
One of the strict regulations of cannabis advertising in Canada prohibits cannabis companies from using packaging on their products that would attract juveniles, such as fluorescent or metallic colors. Health Canada is focused on preventing children and teenagers from obtaining marijuana and the tight regulations are meant to prevent kids from being attracted to cannabis products.
Packaging must be plain and will be uniform across Canada. The packaging must contain labels with health warnings and THC content, which is similar to alcohol and tobacco products. A small logo for branding is permitted on the packaging.
Cannabis advertising in Canada may not depict any animals, people, or characters that are real or fictional on product packaging. Packaging must also avoid using images that associate marijuana with positive ways of life such as glamour, excitement, or recreation.
No packaging is allowed that "associates the cannabis or one of its brand elements with or evokes a positive or negative emotion about or image of, a way of life such as one that includes glamour, recreation, excitement, vitality, risk or daring." Say what? People typically consume recreational cannabis for recreational purposes, so restricting a company from associating cannabis with recreational activities is problematic to say the least.
David Sutton is the president NanoSphere Health Sciences, a company that creates delivery systems for cannabis products, and says that the advertising restrictions grossly overstep boundaries and keep companies from properly marketing their products and earning profits.
"I think companies are going to take a lot of risks and ask for forgiveness later. You have to look at the opportunity cost. If you toe the line, you may be 100 percent compliant with the law but you may be zero percent profitable." Sutton went on to say that if companies aren't allowed to promote their brands, competition is stifled, and product quality will suffer as a result.
Sales specialist Doug Stephens agrees. "The rules are extremely restrictive, and I think we can liken them most to cigarette manufacturing," he said. "The packaging has to be very, very non-descript."
Cannabis packaging must also refrain from promoting deceptive, false or misleading information. Penalties for businesses that violate the regulations for cannabis advertising in Canada could result in three years in jail or up to a $5 million fine.
It is also illegal to sell cannabis to any person under 18 and doing so could land you a maximum of 14 years in jail. Using a minor to commit a cannabis-related crime is tantamount to giving or selling cannabis to a minor. Stephens notes that the regulations may become more flexible as the country becomes comfortable with legalized cannabis.
Companies Rely on Grey Area to Market Cannabis
Companies are trying to find creative ways to get around the stifling advertising laws in Canada to promote their brand without violating regulations. Methods so far have included using social media, billboards, digital ads, free events, sponsorships, and websites to advertise.
Economists estimate that Canadians will spend at least $10 billion annually on cannabis, and Stephens says companies are not using graphics and animated pop-ups on smartphones to promote their brand and earn a piece of the pot pie.
Cannabis businesses are also using celebrity investors to promote stock in their companies instead of focusing on cannabis directly. Because celebrity endorsements are not allowed to advertise cannabis products, the companies are finding celebrity partners. Canopy Growth partnered with musician and good friend of Mary Jane Snoop Dogg to create a cannabis line and saw an increase in the company's stocks. Invictus MD also found a celebrity investor in KISS front man Gene Simmons.
Health Canada Warnings
Health Canada has started warning companies who are not compliant with advertising regulations and has directed them to take corrective measures immediately "to bring their activities into compliance with the current law." Officials at Health Canada advised the companies that sponsoring musical festivals, advertising on social media, publishing ads on websites, and promoting their products at venues was not allowed.
Jordan Sinclair is the spokesperson for the Canopy Growth's aptly named cannabis company Tweed and says that the company canceled much of its marketing campaign based on Health Canada's warning. The company had been providing cannabis products at music festivals and pride parades but has since ended the promotion.
"We're always appreciative of the guidance they provide as we interpret the regulations and introduce campaigns we believe to be within those regulations." Sinclair also said that the intent of the company was to engage the public by making them comfortable about seeking information about cannabis.
Aurora is another cannabis company that may have received a warning from Health Canada. The company used a billboard which read "How will cannabis legalization change your life? There's more to the conversation," and included a link to Aurora's website.
Toronto-based Aurora also sponsored parties during the Toronto International Film Festival as well as free music concerts. Sponsoring festivals and throwing shindigs are both clearly violations of Canada's cannabis advertising regulations, but businesses are claiming that they are merely providing information about their company and not promoting pot. Touché.
Other companies simply post pictures on social media with their name and an alluring picture without mentioning cannabis. Tokyo Smoke posted a photo on Instagram of a scantily-clad model dressed as a cross between a French maid and dominatrix complete with a reference to munchies.
Health Canada also warned the cannabis company HEXO that they were in violation of Canada's cannabis advertising regulations when they sponsored a musical festival with a performance by Wu-Tang Clan in Toronto last October.
Regardless of how stringent cannabis advertising in Canada may be, cannabis companies are still finding unique ways to promote their products while operating within the grey areas of the regulations. Businesses with cannabis products are also permitted to sell accessories like hats and T-shirts. With more than 2.4 million Canadians consuming pot on a daily basis, it is likely that cannabis companies will continue to challenge the status quo for profit.
