The promotional and marketing regulations surrounding recreational cannabis in Canada are notoriously restrictive. However, cannabis brands have responded with a massive amount of creativity and determination to work within and around these prohibitive rules. Typically, when a cannabis retail store or brand receives a complaint or marketing infraction (by either Health Canada or the provincial retail regulator), that brand only receives a warning letter to cease the non-compliant activities. There appears to have been zero monetary punishment and no retailers or Licensed Producers have had their licenses revoked for marketing-related infractions. Notably, this may be changing in some jurisdictions. This article will explore one of the very first examples of a Canadian cannabis company being penalized for a marketing or promotional infraction.
A panel established by the Alberta Gaming and Liquor Commission, the governing body responsible for cannabis retailers in the province, has found that Canna Cabana (a large, publicly-traded multi-provincial cannabis retailer with locations in Alberta, Ontario, British Columbia and more) has contravened section 90.17 of the Gaming, Liquor and Cannabis Act. The panel has asked Canna Cabana to pay a $25,000 fine or face a 100-day suspension of Canna Cabana Inc.’s Alberta locations. The fine was to be paid on or before July 24, 2023. This infraction is focused on an email marketing blast that was sent by Canna Cabana to their email newsletter list.
Why was Canna Cabana fined by the AGLC?
Canna Cabana was found to have gone against the advertising policies contained in sections 6.1.5(c), 6.1.5(i) and 6.1.5(l) of the AGLC’s Retail Cannabis Store Handbook. The Panel has ruled that Canna Cabana did not take all reasonable steps to prevent its employees from contravening these provisions.
The AGLC has ruled that Canna Cabana has engaged in the following non-compliant activities:
– Promoting irresponsible cannabis consumption or service
– Use of testimonials or endorsements
– Claims of positive or negative impact as a result of usage (i.e. glamorous, vitality, recreation, etc.).
Canna Cabana’s Email Marketing Infractions
These infractions are all related to one specific email marketing campaign sent from Canna Cabana to members of its “Cabana Club” loyalty program and newsletter list. On November 21, 2022 – a member of the AGLC received a complaint about an email sent to these members which spurred an investigation. A number of graphics, images and copywriting were deemed non-compliant within this email. This includes one graphic which stated, “Get higher than your streaming bill, for less” with a tagline stating, “Maximize your evening in with Cabana Club’s unbeatable prices.”
The Inspector explains that this ad promotes that consumers “get high” which in turn promotes the irresponsible consumption of cannabis. The inspector suggested that the tagline implies that more than the legal limit of cannabis should be consumed. He compared the wording in the advertisement to a liquor advertisement using the phrase “get drunker”, which most would agree would be inappropriate.
Another graphic contained within Canna Cabana’s November 18, 2022 email featured product review statements for a product called “Organic Sugar Bush” provided by The Green Organic Dutchman brand (which recently merged with BZAM). These statements included:
– “Great for a pleasant afternoon reading a book or doing an odd job.” – Doug T.
– “Love this one. Relaxing and chill without the need for a nap. There’s no harsh burn or coughing. Great high” – Anonymous
– “Great taste, wicked high! Freaking amazing. What a treat!” – David L.
The inspector argued that these statements constitute endorsements. Furthermore, these testimonials also make claims of positive impacts as a result of usage, citing the phrases “great high” and “freaking amazing” – something which is also banned under the regulations.
When inspectors asked Canna Cabana to provide a rationale behind using the aforementioned statements and endorsements, the company responded that its marketing team members “slipped up” and used the testimonial endorsements “in a temporary lapse of judgment.”
The Future of Cannabis Marketing Regulations in Canada
Many cannabis brands have prevailed in the face of restrictive promotional and marketing regulations. At ADCANN, we encourage responsible civil disobedience and pushing the limits as much as possible. The only way that the regulations will change in the favour of the industry is by a collaborative effort from all of the industry’s participants.
It’s important to take the necessary steps to prevent yourself from monetary or legal penalties. Similarly, it is important to stay conscious of fully abiding by the regulations we can all agree on, like not appealing to minors. We hope that this case is not signaling a trend and that regulators do not begin to crack down more on promotional activities. This industry needs all the marketing and advertising tools that it can access if we want legal companies to succeed and displace the illicit market.
Read the full details of the AGCL fine against Canna Cabana here.
Last Updated on August 22, 2023 by ADCANN
