Cannabis marketing gets creative in hazy lead up to legalization

‘The industry would actually love it if there was more clarity on what’s going to be allowed and what’s not going to be allowed after legalization’

“How late can I call? Do you call me or do I call you? Is Tweed a codename?”

These are just some of the rather cheeky slogans being displayed in Ontario on billboards, at bus stops and online, courtesy of Canada’s largest pot company, Canopy Growth. The advertising campaign is a bold and clever attempt at promoting Canopy’s most popular recreational cannabis brand, Tweed, without explicitly mentioning what exactly Tweed is selling.

In the heart of Toronto’s trendy Queen West neighbourhood, cannabis producer MedReleaf is employing a similar marketing tactic. The pot company is occupying a storefront that is handing out free cans of San Rafael ’71 beer, which, come Oct.17, will morph into a cannabis brand, with a full range of strains for recreational use. It is yet another attempt by a licensed producer to promote its recreational weed brand, without really saying that’s it’s weed.

“The LPs are getting very creative,” said Rebecca Brown, founder of Crowns Creative, an advertising agency geared to the cannabis industry. “We suspect that companies are taking advantage of the pre-October 17th legal vacuum to undertake activities they may not risk undertaking post-October 17th.”

Indeed, with just a couple of weeks to legalization, the rules governing what cannabis companies can or cannot do when it comes to advertising their products remain murky. Health Canada’s position is that until new prohibitions on promotion come into effect on Oct. 17 via the Cannabis Act, the advertising of cannabis remains subject only to prohibitions in the Narcotic Control Regulations (NCR) and the Food and Drugs Act. Those restrictions are heavy, albeit broad — for instance, paragraph 70(b) of the NCR states that no person shall “publish or cause to be published or furnish any advertisement to the general public respecting a narcotic.”

The Cannabis Act, however, once in effect, has much more clearly defined restrictions on what is allowed, somewhat akin to tobacco advertising standards. For instance, it will be illegal to “promote cannabis, or a cannabis accessory or any service related to cannabis” when there are reasonable grounds to believe it could be “appealing to young people.” Additionally, the Act states, promoting cannabis by “presenting it or any of its brand elements in a manner that associates it or the brand element with a way of life such as one that includes glamour, recreation, excitement, vitality, risk or daring” is strictly illegal.

“Right now we’re seeing lots of brand awareness initiatives that don’t seem to be attracting enforcement action by Health Canada,” Brown said. “There’s so much greyness around what’s allowed and what’s not, you’ve seen some LPs take latitude.”

By latitude, Brown was referring specifically to a Tweed ad displayed prominently on a billboard on Toronto’s busy Gardiner Expressway.

The issue that may irk regulators come Oct. 17, according to Brown, is that the billboard is visible to minors. The Cannabis Act makes it explicitly clear that any “informational promotion” or “brand-reference promotion” is only allowed in a place where “young persons are not permitted by law.” A billboard on a major expressway advertising a recreational cannabis brand, will most certainly not make the cut, Brown believes.

Canopy’s perspective is that the campaign is more “educational” than promotional. “We work closely with our legal counsel when developing and implementing our educational campaigns. It is of critical importance to us that we follow and adhere to all advertising regulations and policies set in place,” said Canopy spokeswoman Caitlin O’Hara.

Health Canada, when asked, remained vague on the question of Canopy’s billboard.

“The actions of some licensed producers have underscored the need for the prohibitions in the Act, and their rigorous enforcement,” the department’s senior media relations advisor Tammy Jarbeau wrote in an e-mailed statement. “The current law prohibits the publishing or furnishing of advertisements respecting a narcotic to the general public. In these instances, the Department communicated its specific concerns to licensed producers requiring that they take immediate corrective measures to bring their activities into compliance with the current law.”

O’Hara said that Canopy has not been contacted by Health Canada regarding this specific ad campaign, which would suggest that it has been deemed acceptable — at least for now.

But Deepak Anand, vice-president of business development and government relations for Cannabis Compliance Inc., an advisory firm for the industry, believes that that might not really be the case, and that Health Canada is in fact just too busy in the lead up to legalization to actually go about enforcing marketing and advertising rules.

“If something is high profile and it’s not permitted, like LPs sponsoring music festivals where there were kids, they will shut it down. But I don’t think they are going to get really strict until after legalization,” Anand said.

There are, in fact, numerous other examples of cannabis companies attempting to capitalize on the pre-legalization regulatory vacuum — some more notorious than others.

In mid-September, the online cannabis retailer Namaste Technologies hosted a flashy “pledge party” in Montreal’s hip Griffintown neighbourhood, headlined by rapper Snoop Dogg (who has in recent times adopted the moniker DJ Snoopadelic), and attended by over 500 people, including key investors that Namaste CEO Sean Dollinger was hoping to charm into holding Namaste’s shares in the face of pressure from short-sellers.

Details of the party, documented in a La Presse report the next day, were racy — female “promoters” in body-painted underwear touted a device that would allow the consumption of cannabis oil via an injection. There were also women dressed in “sexy nurse uniforms” offering party-goers the option of a Skype consultation with an out-of-province nurse-practitioner, who could potentially dish out a medical cannabis prescription.

The event caught the attention of Health Canada, who gave a rap on the knuckles to Namaste’s wholly owned subsidiary, Cannmart, which has a licence to produce and is therefore subject to Health Canada rules.

“Health Canada is aware of the event that took place in Montreal, and has followed up with the licensed producer to remind it of its obligation to comply with prohibitions against the advertising and promotion of cannabis,” the department wrote in an email.

“Obviously, even though it was a private party, we still got into a lot of trouble,” Dollinger acknowledged. “I had security guards checking people for cannabis, it was a non-smoking venue, and we had notified the local police department of the event. The only thing I could have done better was maybe not have the sexy nurses.”

Other events have also come under scrutiny from Health Canada. In a September statement to the CBC, the department said it was “concerned” over “some federally licensed producers of cannabis that sponsor events, such as music festivals, and engage in promotional activities.” The statement came after licensed producer HEXO Corp. sponsored a concert by the hip-hop group Wu-Tang Clan in Toronto.

The department issued a similar statement in June, when Aurora Cannabis put on a series of free concerts across Canada as part of it’s “Illumination” ad campaign.

The uncertainty over advertising is not likely to end come legalization.

“Look, the Act, when enforced come October 17th, is going to be subject to so much interpretation, especially when it comes to what exactly constitutes the promotion of brand characteristics, or brand preference,” said Brown.

“I think the industry would actually love it if there was more clarity on what’s going to be allowed and what’s not going to be allowed after legalization, because so many of them have already launched massive ad campaigns.”