Let's talk about celebrities and their weed brands. How do they get around Health Canada's marketing rules?
When Dan Aykroyd’s Crystal Head Vodka made its Canadian debut more than a decade ago, the Liquor Control Board of Ontario banned it. It wasn’t because Akroyd was promoting the “clean” and “premium” nature of the product, or using his celebrity status to sell booze. No issues there. It was the skull-shaped bottle that had them worried.
“The image of the human skull is the thing that’s really problematic for us,” LCBO spokesman Chris Layton told the Globe and Mail in 2010. “That’s an image that’s commonly associated with death.”
The LCBO eventually overturned its decision and the vodka, made in Newfoundland, has become so popular that it is now available globally.
It’s hard to imagine a similar situation unfolding in the world of cannabis, where, by law, product branding and promotions are flattened and standardized.
According to the Cannabis Act, branding elements cannot evoke a sense of “glamour, recreation, excitement, vitality, risk or daring.” Nor can cannabis products and brands depict a person, character, or animal — real or fictional. Social media is a no go — tech giants like Facebook and Google have an outright ban on cannabis promotion — and things like sponsorship or celebrity endorsements are illegal. In other words, the mainstream marketing opportunities afforded to most everything else, other than cigarettes, are not available in the world of cannabis.
As Canada approaches two years of legal weed, many companies are still grappling with these regulations and trying to figure out how to develop a brand and build a following within the government’s restricted framework.
“I think what everybody’s realizing is building a brand is not a sprint,” says Rick Moscone, partner with Fogler, Rubinoff LLP and the co-chair of a cannabis marketing group from the Canadian Marketing Association. “I think you’re seeing a more focused approach on not just getting a name out there, but having quality products that consumers want. It’s a question of ‘How can we build brands without these other types of things that you would typically see?’”
Celebrities and cannabis
While celebrity associations and endorsements are not an instant brand building panacea, it certainly doesn’t hurt. Studies have demonstrated that consumers have greater recall of products that are associated with a celebrity and place a higher value on products that have received a celebrity endorsement.
But it doesn’t take a study to see the impact stars can have when it comes to pushing products. Flip through any magazine, or scroll through your phone, or walk around a city and you will be pummeled with celebrity ads hawking everything from booze and fast food, to insurance and mattresses.
If you spot a cannabis ad, however, it will likely contain a lot of blank space and the brand name and that’s about it. No smiling celebrity veneers, no flashy colours, no benefits of the product.
In April, New Brunswick-based producer Organigram sparked conversation around celebrity branding in cannabis when their collaboration with the Trailer Park Boys — Trailer Park Buds — finally hit shelves. The initial deal was struck in 2016 and many have speculated that regulatory issues could be at the root of the years-long delay with TBP branded products.
Health Canada has yet to weigh in and it appears, at least for the moment, that everything is above board. It’s possible that Organigram has received a warning letter from Health Canada in the past (a request for comment to the company went unreturned), but those letters are not publicly available.
To date, no Canadian company has incurred a fine for violating marketing restrictions. Moscone says this is a function of cannabis companies adhering to conservative legal advice — no company wants to be the first one to catch a fine — and because the space between what is allowed and what is not is still being defined.
“People in the industry are looking for guidance,” he says. “And so to the extent that Health Canada could tell people what is right and what is wrong and give more colour around the legislation would obviously be very helpful. I think the problem right now is, Health Canada doesn’t know what bothers them yet.”
Joint venture partnerships
The Trailer Park Boys differ from other cannabis celebrity players like Drake and Seth Rogen in that they do not own a cannabis company. Rogen and Drake both own the majority of their cannabis ventures — Houseplant and More Life Growth Co., respectively — with Canopy also owning a piece.
These structures create some regulatory wiggle room, allowing Canopy to align themselves with the stature and clout of the celebrities without running afoul of the regulations. The relationships, in this case, are not based purely on endorsements or marketing deals.
Health Canada hasn’t offered much insight or feedback about these partnerships but Adam Greenblatt, a communications advisor for Canopy, says the company is in regular contact with the government to ensure their brand partners are operating in a way that is compliant.
“Creativity and compliance are not mutually exclusive, and we take working within the regulations as a challenge,” he said in an emailed statement.
Moscone says the government likely isn’t jumping for joy about these creative ventures, but it’s also not their main concern. “Ultimately it goes back to the basic principles of what they were trying to achieve with the Cannabis Act — they want to keep (cannabis) out of the hands of youth in addition to combating the black market.”
CBD and the future
In Canada, hemp-derived CBD falls under the Cannabis Act, so the rules are no different when it comes to a marketing CBD or a THC product. In the United States, however, it’s a different ball game.
Cannabis is, of course, not federally legal, so there are no overarching regulations and consumers in states that have deemed the plant legal are often treated to more vibrant branding. Just as Canada has both federal and provincial regulations, every state has its own rules, and some, like California, have different rules for different jurisdictions within the state.
“Both markets have their unique challenges,” Greenblatt says. “In the U.S., we are limited to CBD products only but are less encumbered by packaging restrictions. In Canada, we can sell the whole spectrum of cannabis products, but the rules around promotion and packaging are more restrictive than in the U.S. Both markets — and the nuances of marketing and promotion within different regions — are constantly evolving, which adds a layer of complexity to building brand awareness.”
The 2018 U.S. Farm Bill legalized hemp and hemp products but there are still barriers to marketing and selling those products. Increasingly, the U.S. Food and Drug Administration has been cracking down on CBD. Moscone says the motivating factor is unverified health claims made by CBD companies.
“That falls straight under the FDA regulatory purview,” he says. “So they will send out warning letters to companies who are active in the CBD space who are making health claims that aren’t supported.”
And while the Canadian government currently categorizes CBD under the same marketing restrictions as cannabis, Moscone says that could change in the future. “Health Canada is looking into whether they will allow for new consumer health products to be marketed, primarily CBD, in a different way. But that’s just under investigation right now.”
If any changes do happen, Moscone predicts they could still be 24 to 36 months away. As for the Cannabis Act, he doesn’t see any ease in marketing and promotion happening anytime soon. Ultimately, he says, it’s going to come down to time and more boundary-pushing campaigns to define the limits of what is allowed and what is not.
He draws a comparison to the alcohol industry, where Health Canada has clear guidelines about what is permitted, but they also have decades of experience to draw from. Just as the marketing guidelines for alcohol have been refined, he expects the same evolution will happen in cannabis, eventually.
“I think the bottom line is at some point in time — five years, 10 years, I don’t know what the time frame is — but as there’s more experience, I suspect that we will see similar guidelines.”
Meanwhile, for Aykroyd and his crystal skull, life is good and could be getting better soon. This past fall, he took a trip down to Oregon to visit Jim Belushi and his cannabis farm. The actors enjoyed some drinks, played a few songs and then had some news to announce: a Blues Brothers cannabis brand is in the works.
© 420 Intel