Compliance in Advertising
What Cann a Brand do to Effectively Market Itself?
New markets are boundless with potential, and while this is certainly true of the emergent cannabis markets in Canada and across many U.S. states, cannabusinesses are limited in how they can advertise their cannabrands and products.
The new regulatory framework associated with cannabis legalization means cannabusinesses and cannabrands must craft a well-planned and thoughtfully executed marketing strategy to ensure compliance with the complex sets of restrictions to which they are subject in their respective jurisdictions.
In Canada, both the federal and provincial governments have a say in how cannabusiness is regulated. The federal government sets strict regulations related to industry standards and procedures, the products that can and cannot be sold, restrictions on labelling, packaging, promotional materials and advertising, as well as standard serving sizes, potency, and good manufacturing practices (GMPs). Cannabis licenses are issued by Health Canada.
Provinces are charged with licensing and oversight of the conditions of distribution and sale in accordance with, and subject to, federal legislation. Provincial governments have the power to set the age of majority for cannabis use and possession, as well as to lower the limits of personal possession from the federally established 30 grams. The provincial government can also restrict where consumption can take place, just as they do with tobacco. In fact, the Cannabis Act 2018 was modelled after the Tobacco Act and it acts very much the same in its objectives and function.
The Cannabis Act came into effect in October 2018 and legalized recreational use of cannabis. The act is designed to protect public health and wellbeing and prohibits the labelling, packaging or promotion of cannabis in any way that could appeal to young people or encourage its consumption.
Promotion of cannabis is regulated by sections sixteen to twenty-four of the Cannabis Act and prohibits the communication of information related to its price or distribution, testimonials and endorsements, depictions of persons, characters or animals, real or fictional, appealing to a positive or negative emotion or way of life such as glamour, recreation, excitement, risk, or vitality.
This has been a major concern of Seth Rogen and Evan Goldberg, Canadians who have made a living working in Hollywood and who have recently launched their cannabrand Houseplant. Both Rogen and Goldberg have been careful not to be involved with direct endorsement of the company or its promotion at events to ensure that they are in full compliance with Canadian laws, which state that celebrity endorsements are prohibited.
The Cannabis Act lays out general prohibitions and identifies exceptions to the rules. These restrictions and allowances are quite complex and often require companies to solicit the services of a lawyer or rely on resources and organizations like the Canadian Marketing Association (CMA).
CMA is an organization that has an established Code of Ethics and Standards of Practice and guides that set best practices, as well as resources to support businesses as they navigate the newly established and extremely complex regulatory frameworks within which they must operate in Canada. The same resources and standards are available from the Interactive Advertising Bureau (IAB) in the U.S. regarding digital advertising.
In the United States, recreational cannabis is legal in ten states, while medical marijuana use has been cleared in thirty-three states, though it remains federally prohibited, making legislative prescriptions even more complex.
The easiest place for cannabusinesses to start when considering how to effectively market or advertise your cannabrand is compliance; be sure to be in compliance with the legislative powers that be in various markets. Simply stated: don’t market your business to or near minors, know your limits and work within them. Traditional marketing platforms and advertising channels are not necessarily out of the question for cannabusinesses, but their use and reach is limited. Because of the regulatory framework, it’s not as simple as taking out an ad in the local newspaper or other print, radio, or television stations.
Cannabusinesses do, however, have a growing cross-section of cannabis-centric advertising platforms to choose from. Alternative newspapers, magazines like Cannabis Brightline, and social media platforms that are cannabis industry-specific serve as great advertising opportunities that will reach a target market.
As a new industry with residual stigma from the prohibition era, it is important that cannabusinesses represent not only their own cannabrand but the entire industry, doing so with the utmost professionalism, integrity and enthusiasm. It is important to not only thoughtfully consider what you want your cannabrand to represent, but also to communicate your brand values and company culture instead of focusing on the products alone. This is especially critical when selecting a name for the company and its products, logos and designs and other branding opportunities.
When branding a company and its products, one must be careful not to infringe on the copyrights and brands of existing and established companies across industries. This was the case with Snoop Dogg and Maple Leaf Sports and Entertainment (MLSE), parent company of the Toronto Maple Leafs. MLSE challenged the trademark for Snoop Dogg’s signature cannabrand, Leafs by Snoop, which it claims infringes on the trademark and logo of the Maple Leafs franchise and could lead to confusion between cannabis users and hockey fans.
The challenge by MLSE has been ongoing since 2016, though Snoop Dogg did not file for a trademark for his brand until 2018. At that point, the legal paperwork was filed by MLSE, highlighting how it feels its logo and brand is being infringed upon.
The first point of issue for MLSE is the spelling of the company name, which is similarly misspelled in both cases. Whereas the correct way to pluralize the word is leaves, both companies have chosen “leafs” in their names. Similarly, both logos have the company name branded over a leaf. In the case of MLSE, it is a blue maple leaf and in the case of Snoop Dogg, a green seven-point cannabis leaf. While there are certainly similarities between the two, it will be up to a judge to decide whether intellectual copyright was violated in this case. Regardless of the decision, it has been a mess and something new cannabrands should endeavour to avoid.
Whether marketing a cannabrand or a standard commodity, it is important to meet consumers where they are and one of the most practical ways to get your cannabrand to the masses is the internet and social media. There are a myriad of ways to leverage online platforms to bring your message to your market, but as social media outlets prohibit paid cannabis advertising due to its federal designation as an illegal Schedule 1 drug, this avenue must be carefully pursued to ensure legality and compliance.
Digital marketing is a great opportunity for cannabrands, though it too comes with its challenges. Take for instance, Google: Google Ads does not allow for the promotion of products or services associated with mind-altering substances or drug use for recreational purposes and ads will not be run on websites that do the same.
While Google Ads might be off limits, there are still several ways to take advantage of digital marketing. From blogs and websites to email marketing, native advertising campaigns and search engine optimization (SEO), there are countless ways to make leverage Big Data and make it work for your business.
But Big Data is useless if your focus is collection alone. It is important to keep track of your advertising efforts and develop the capacity to collect and analyze data in order to be most effective in understanding where your markets are and how best to communicate to them. Data can inform and direct your strategy and help to streamline your efforts.
To be most effective, be sure that the voice of the company accurately communicates the utmost professionalism and personalism, and reflects the integrity of your cannabrand consistently across platforms. From blog posts to photos, articles and videos, be true to your brand. Use compelling content that goes beyond entertainment value to educate and inspire your market.
Collaboration is another good way to bring your cannabrand to the market in a more effective way. Partnering with other brands and companies can bolster a reputation and influence in new market spheres, as well as sharing resources and expertise.
All of this, of course, could be for nothing if you are not responsive to and regularly engaging with your audience. There is no point in having multiple social media platforms going at once if content is not consolidated and consistent across the online marketing footprint. In fact, it is best to selectively take on social media unless you can ensure a regular presence and engaging, educational or innovative material.
When it comes to marketing and advertising your cannabrand, there is certainly a lot to unpack. While these are all great places to start, sometimes the best way to ensure compliance with the law is to consult a lawyer and ensure that your investments and your efforts are protected, as are your customers and the markets you serve. Be thoughtful, creative, and compliant – and let your cannabrand shine.