SIGN OF THE TIMES?
From rock show promos to branding, pot firms blur line on advertising
Health Canada has issued a warning to cannabis companies that are sponsoring music festivals and promoting their brands as Canada heads closer to the legalization of recreational marijuana this fall.
Companies that break regulations against advertising will face “serious consequences” that could include licence suspensions, fines as high as $5 million or jail time, Health Canada said in a public notice.
It’s another sign of the tension between companies eager to carve out name recognition and federal regulators trying to prevent the promotion of pot. Health Canada doesn’t name names, but says it is concerned about companies that sponsor events “such as music festivals and engage in other promotional activities.”
The actions of some companies underscore the need for the advertising restrictions contained in the new cannabis law, Health Canada said. The law treats marijuana a lot like tobacco. Mass advertising will be banned. Pot will be sold in plainish packages with health warnings. Company sponsorships, contests and endorsements by celebrities or anyone else will not be allowed.
However, the law doesn’t go into effect until Oct. 17.
In the meantime, cannabis companies have sponsored music festivals, concerts, art exhibits and fashion shows and have had a presence at events across the country from the Calgary Stampede to the Toronto Pride parade.
One of the largest companies, Aurora Cannabis Inc., is staging a contest for tickets to 18 free concerts across the country with popular acts such as City and Colour, Kings of Leon, the Sheepdogs, Sam Roberts and Phantogram.
Aurora’s chief corporate officer, Cam Battley, said he hoped the Illumination concert series could continue, perhaps with adjustments to the wording used to promote it. He expected to have a decision by the end of the week.
Aurora and other large companies have lawyers and regulatory experts on speed dial as they try to figure out what they are allowed to do both under current regulations and the coming law. “It’s an interesting challenge,” Battley said.
“What we are hoping to do is certainly get our company name recognized as a participant in this sector, while at the same time — and I can’t emphasize this enough — remaining in full compliance with those regulatory requirements.”
Aurora is scouring the promotional material associated with the concert series to make sure it’s not “offside,” he said.
The festival is “a good and exciting thing to do, and, if we can continue it in compliance with the existing regulations, we certainly want to do that.”
The company is also reviewing all its community contributions and sponsorships, Battley said. In the past few months Aurora has sponsored art exhibits, the Afrochic Cultural Arts festival and events at the North by Northeast music and arts festival in Toronto.
Representatives from Tweed, the marijuana company based in Smiths Falls, will attend about 250 events this spring and summer — from concerts and trade shows to Pride parades. In some cases, they’ll buy a booth or table while the Tweed name will be displayed at other events, spokesman Jordan Sinclair said.
A poster containing the word Hi! with the Tweed logo has been used across the country, including on several buildings in Ottawa.
One evening recently, the company projected a video ad onto the side of an Elgin Street building.
Sinclair says Tweed officials have interpreted the current regulations and are “confident the decisions we have made fall within the rules.”
“And, if the regulator has any more specific guidance, of course we will follow that as well.”
Tweed’s promotional campaigns focus on educating people about cannabis and how to use it responsibly, Sinclair said.
Health Canada’s statement does not stipulate what type of “promotional activities” are of concern.
However, it points out that companies are bound by Narcotic Control Regulations that ban advertising narcotics to the general public. Contravening those regulations can result in criminal liability with a maximum fine of $5 million “with the possibility of imprisonment.”
“Health Canada expects that all parties who are authorized to conduct activities with cannabis adhere to the highest standards of professional and ethical conduct, and at all times comply with the law,” Health Canada said. “The department is reviewing the actions of existing licensed producers and will be taking every possible step to bring them into compliance or prevent non-compliance with existing laws.”
Sponsoring events and other “promotional activities” are “contrary to the government’s goal to protect public health and public safety, including the goal of protecting young persons and others from inducements to use cannabis …” the statement said.
The debate will probably intensify after the law comes into effect in October. The law’s ban on testimonials and endorsements, for example, is ripe for interpretation as celebrities and rock stars get involved with cannabis companies.
Members of iconic Canadian band The Tragically Hip, for example, are “creative collaborators” with Up Cannabis. Earlier this month, band members helped launch new pot brands named after their song titles, including Eldorado, Morning Moon and Fifty Mission Cap. The band also staged a contest with Up to “hang ” with the Hip in a “VIP UP experience.”
The law ’s prohibition on linking cannabis to “glamour, recreation, excitement, vitality, risk or daring ” is another key area for conflict as companies strive to associate their products with health, wellness and fun.
Earlier this spring, Health Canada asked two other cannabis companies to remove content on websites created to promote recreational products.