The legalization of cannabis put Canada in the limelight and launched a surge of brands looking to gain market share. It’s important to understand the difference between cannabis sponsorships and partnerships, as these brands don’t enjoy the same freedom of creative expression as other regulated industries. For instance, we’re far from seeing direct product advertising on public transport.
Cannabis Marketing in Canada
Before national adult-use legalization on October 17, 2018, Canadian cannabis marketing guidelines weren’t strictly defined. Brands could play and test ideas in a grey space, driving brand awareness with social events, influencer campaigns, pop-ups, sponsorships and social campaigns, but the advent of the Cannabis Act (C-45) introduced a heavily regulated framework, overseen by Health Canada, with strict rules and regulations about the marketing tactics cannabis brands can use.
Unless authorized under the Cannabis Act, it is prohibited to promote cannabis or a cannabis accessory or any service related to cannabis, including any of the following:
- by communicating information about its price or distribution
- by doing so in a manner that there are reasonable grounds to believe could be appealing to young persons
- by means of a testimonial or endorsement, however displayed or communicated
- by means of the depiction of a person, character or animal, whether real or fictional
- by presenting it or any of its brand elements in a manner that associates it or the brand element 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. [C-45 Subsection 17(1)]
So why is there such an important difference between cannabis sponsorships and partnerships? The Cannabis Act places strict rules on promotional activities and branding that prohibits the use of sponsorships and testimonials. Strategic partnerships, on the other hand, are allowed in and, done correctly, can be extremely useful in growing a brand’s database.
What Are Partnerships and Who’s Doing Them Right?
Forging brand partnerships between a brand and an existing community is an instant way to get exposure to a new audience, and although cannabis brands cannot use social media advertising to target potential consumers, strategic partnerships provide a good workaround.
A smart, strategic partnership will help a brand collect emails to engage a target audience with compelling content, as 48North has done with their content platform, Latitude, which helps strengthen women’s relationships to cannabis through story-telling.
Canada’s guidelines prohibit the use of testimonials and endorsements in promotions that invokes a specific way of life to sell cannabis. However, licensed holders are allowed to enter into business relationships with celebrities.
Canopy Growth, as well, has made partners of more celebrities than just about any cannabis company in Canada. Their partnership with Seth Rogen and Evan Goldberg to sell branded flower, soft gels and pre-rolls under the name Houseplant is just one example of a partnership forged within Health Canada’s regulations. In a different style of collaboration, Canopy is enlisting celebrity lifestyle guru Martha Stewart to advise the company in developing a new line of goods, including hemp-derived CBD products.
What Are Sponsorships and Why Are They Risky?
Sponsorships are a marketing strategy of a different nature and one that Health Canada is discouraging of depending on its context. The federal agency has, in the past, threatened to suspend the licenses of producers that don’t comply with rules on sponsorships.
Aurora Cannabis was a presenting sponsor at North by NorthEast 2018, sponsoring several of the music events, and holding cannabis information sessions. For this, Aurora received backlash as not all of the events were age-gated, therefore exposing youth to their marketing.
UP Cannabis sponsored a beautifully-presented art exhibit in Toronto for Nigerian-Canadian photographer, Elie Kimbembe that drew in a well-heeled crowd. Although UP added their branding around the —an outdoor cannabis consumption lounge allowed attendees to indulge in cannabis safely—federal rules were upheld. All attendees were verified to be adults—of cannabis consumption age in Ontario—the event took place away from areas where youths frequent, and the company even partnered with Facedrive, a new rideshare app whose drivers made sure everyone got home safe.
Cannabis Marketing Limitations
The limitations imposed on cannabis marketing in Canada are complex, but the rewards of putting forward a thoughtful marketing scheme are great. On the other hand, the penalties could be severe for those who don’t comply with the regulations—LPs, for instance, could risk having their licenses revoked, fines up to $5 million, and jail time up to three years. That’s why it’s good to know the difference between cannabis sponsorships and partnerships.
Rather than focus on what you can’t do, look at it from the angle of what you can do in the act of creative compliance. When in doubt, always hire a cannabis compliance-savvy lawyer.
Guest post by Alana Armstrong, Partner at Alan Aldous Communications.
Last Updated on April 10, 2020 by ADCANN
