Canada’s Restrictive Advertising Laws Will Treat Legal Weed Like Cigarettes
Early investors are already worried that proposed safety labels and a ban on celebrity endorsements could eliminate the upside of Canada’s impending cannabis market.
Canada is mere months away from ending cannabis prohibition entirely, but if all goes as planned, Great White North ganjapreneurs could be entering the free market with one hand tied behind their back.
According to Bloomberg, Prime Minister Justin Trudeau's administration is holding strong to early promises of a "boring" cannabis industry, proposing legal weed regulations featuring prominent health advisories, color and font limits, as well as restrictions on visual "brand elements," celebrity endorsements, and consumer testimonials.
In March of last year, Trudeau advisor and former Toronto Police Chief Bill Blair said that the administration would be ending prohibition for the explicit purpose of eliminating the drug's black market, but also to reduce overall use. By subjecting legal cannabis to the same point-of-sale prerequisites as cigarettes, Blair hopes to keep weed out of the hands of not only children, but adults as well.
"This is really predicated entirely upon a public health model, and not a commercial model," Blair told Bloomberg. "We want to do a better job of protecting our kids."
For investors though, who have already poured millions into the industry that's expected to begin legal weed sales in July of this year, the prospect of bland boxes or uniform containers on dispensary shelves is adding some unforeseen risk to what once felt like a sure thing.
"You've got no advertising, you have plain packaging, how are you going to differentiate yourself and grow your market?" Norman Levine, an investor at Portfolio Management Corp told Bloomberg.
But while nearby American ganjapreneurs like our friend Snoop Dogg, Whoopi Goldbergand Cheech & Chong use their celebrity status to help sell their canna-products, Canadian cannabis investors may still want to think twice before jumping ship down south just yet.
Canna-businesses in California and Colorado may be able to use bold, flashy branding to sell their trees, but in Canada growers are already exporting their cannabis around the world. And as legalization continues to spread globally, the same BC Bud with a warning label at home could easily be repackaged and advertised for commercial consumption in Australia or Colombia.
And still, even with restrictions as tight as tobacco, there's always a loophole, and Canadian businesses are already finding perforations in the fine print. At Canopy Growth Corp., a legal weed business with a value of $5.8 billion, the ban on celebrity endorsements is merely a minor snag.
"Can we have a birthday party for [Snoop Dogg] and tie that to a video? No," Canopy CEO Bruce Linton told Bloomberg. "But can we have the product branded by a corporation which is controlled by a named celebrity? Yes."