Cannabis companies play it safe
Cannabis companies treading carefully at music festivals this summer
Beyond the beer tents and poutine trucks at the recent Field Trip music festival in Toronto, concertgoers got a taste of what many cannabis brands hope is a step toward the future of live music sponsorship.
A fair distance from the event’s two stages, representatives for licensed producer Tweed Inc. were prepared to talk everything pot and pending legalization in Canada. They handed out free swag and plugged a contest for tickets to see Imagine Dragons in concert. Behind them, a social media photo opportunity drew adults and children alike to pose with a giant sign carrying an ambiguously suitable greeting: “Hi.”
It wasn’t exactly the loudest way for Tweed to declare its ambitions of becoming one of the country’s biggest weed players, but as legalization nears, most cannabis companies don’t want to rock the boat with the government. Only a few have signed major sponsorship deals that could throw their name in lights and draw the ire of regulators who could impose stricter enforcement.
Federal marketing laws are still hazy under Bill C-45, the proposed Cannabis Act, and that has many weed companies playing it safe during this year’s festival season, to the disappointment of event organizers.
“Music festivals are anxious to tap into that money,” said Neill Dixon, founder of the O’Cannabiz Conference and Expo, and head of Canadian Music Week in Toronto.
“Everybody is just being super cautious right now. They’re putting their toe in the water and edging their way in. There’s a lot of confusion in the marketplace and no clear delineation about what these companies can or can’t do.”
And getting clear answers from the government could take months. Recreational weed isn’t expected to hit shelves until the fall.
Before that happens, there are questions around what’s permissible for cannabis “sponsorships,” as outlined in the drafted bill.
“I think all of us in the cannabis industry have our lawyers on speed dial, because it’s very confusing times,” said Kerri-Lynn McAllister, marketing officer at Lift and Co., which hosts industry events and offers cannabis education.
“A lot of companies are trying to maximize their opportunities ... They’re trying to create brand awareness now because in the future it’s going to be much harder.”
With summer considered a key window for generating publicity, some are willing to experiment.
One of the more audacious campaigns comes from Aurora Cannabis, the marijuana company that is “presenting” this year’s North By Northeast music festival. The partnership has the company’s name splashed across festival promotional material and linked to a key venue that serves as both an industry hub and concert space.
The sponsorship is designed to introduce Aurora to audiences through “memorable experiences,” said Shaka Licorish, managing director of Toronto culture at the company.
“(There’s) nothing to do with the actual sale or production of cannabis, but it’s more to inform the audience of who we are, what our values are, so they can get familiar with us,” said Licorish.
Other cannabis producers have chosen more subtle ways to build awareness for their brands.
Earlier this year, Amsterdam Brewery signed an agreement with cannabis maker MedReleaf to create a “cannabis-inspired” pale ale called San Rafael ’71. It’s the same name that MedReleaf will use on a cannabis product it plans to launch this year.
The pairing grabbed attention last month when Canadian Music Week signed what its head organizer called a “roundabout sponsorship” agreement that made the brewery and the future cannabis label co-sponsors of the festival. San Rafael beers were on the menu at the concerts.
“I don’t know if that’s going to be the name of a cannabis strain but as far as we’re concerned it was a beer sponsorship,” Dixon said of the arrangement.
Once legalization happens, some expect companies may dare to experiment with what’s permissible under the law to differentiate their brands.
With guidelines already strict under Bill C-45 in its current form, making it illegal to advertise on TV or radio, cannabis companies were relying on branded swag — like Tshirts and fannypacks — to differentiate themselves. Last week, an amendment was added that would prohibit the use of cannabis brand elements on promotional items that are not marijuana or marijuana accessories.
That could push companies to think even further outside the box to capture attention in subtle ways. For instance, a brand could evoke a recognizable pop culture moment — like a song title or movie — without drawing a direct connection to a celebrity they’re working with.
Some companies have already taken another route to the music industry.
Up Cannabis chief executive Jay Wilgar helped strike a deal with members of the Tragically Hip last year, making the rockers stakeholders in its parent company Newstrike.
The move was later mimicked by Vancouver-based Invictus MD who signed up Kiss frontman Gene Simmons as an ambassador willing to speak about the company and his $10-million investment.
Since they’re investors, both deals fall within the rules expected to prohibit celebrity endorsements.
Newstrike has brandished the Tragically Hip’s name on its stock exchange ticker symbol, “HIP,” and recently held an event at the Hip’s legendary studio in Bath, Ont., that was heavily promoted on social media.
The burgeoning Up brand also intends to regularly tap into the Hip’s fan base.
The Hip’s band members are legally allowed to post about Uprelated events to their hundreds of thousands of followers on Facebook, Instagram and Twitter. They can also send out emails to people who have willingly signed up to their mailing lists.
Up Cannabis also secured a long-term agreement with the Hip’s talent agency, the Feldman Group, that promises future arrangements with some of its vast roster of clients.
“The music side of this thing, to us, is a critical way to get the message out,” Wilgar said.
“We intend to do as much as we can within the regulations.”