‘Ottawa’ Joints by Snoop Dogg or white label cannabis? Government ponders ad restrictions for pot
The elegant white box shipped from the Tweed Inc. medical marijuana plant in Smiths Falls is stamped with a gold cannabis leaf that signals the dried bud inside is endorsed by Snoop Dogg himself.
The rapper who once boasted of smoking 80 blunts a day has a partnership with Tweed that helps both parties: Snoop promotes his Leafs by Snoop cannabis line and Tweed benefits from an association with “the world’s most renowned cannabis connoisseur,” as Tweed describes Snoop.
Tweed is poised to jump into the recreational market, and the marketing deal with Snoop Dogg was a major coup.
But with the federal government poised to legalize recreational pot, there is a big question mark around the issue of advertising and promotion as marijuana emerges from nearly a century of prohibition.
Will customers in Canada’s world of legal pot be scooping up Leafs by Snoop, or perusing plain packages packed with health warnings? Some clues might be revealed this week, with speculation the federal government will introduce its long-promised legislation to legalize marijuana. The legislation is expected to provide a framework, with many of the regulatory details worked out over the next year or more with the provinces and municipalities.
The federal task force of experts studying legalization recommends restrictions similar to those on tobacco: a ban on advertising, promotion, endorsements, branding and sponsorship of cannabis and accessories. The report also calls for plain packaging that provides only basic information, such as the company name, strain, price, and amounts of THC, the chemical component that causes users to get high, and CBD, another chemical component.
That would rule out celebrity endorsements and attractively designed packages such as the ones encasing Snoop Dogg’s “Ocean View” and “Sunset” medical marijuana.
The task force said it listened to the concerns of health-care professionals, municipalities, police, youth experts, parents and educators who said advertising restrictions are needed to counter efforts by the marijuana industry to promote consumption.
“As with other industries, this new cannabis industry will seek to increase its profits and expand its market,” warns the report. Canada should learn from experiences with tobacco and alcohol, since promotion of those products increases consumption of them, it said.
The Canadian Medical Association suggests not only plain packages, but inserts inside to warn consumers about the health risks, the need to keep products away from children, and not to drive or work with hazardous chemicals or equipment after using marijuana.
The task force does recommend loosening restrictions slightly to allow “limited” promotion, as well as information about products, inside stores if cannabis is sold in outlets not accessible to minors.
Medical marijuana producers poised to jump into the recreational market are concerned. Half a dozen of them, including Tweed, sent a letter recently to federal politicians saying they support limits on advertising but companies should be allowed to brand their products.
Brands are vital to help educate consumers and lure customers away from the black market, they argue. There are thousands of strains of cannabis, and hundreds of products, says Brendan Kennedy, the chief executive of Tilray, a marijuana producer in B.C.
Branding also helps companies build loyalty and promote their differences.
In a sea of plain packages, companies would end up competing for customers based on “price and potency,” said Kennedy. It would be a “race to the bottom,” with the winner offering the lowest-price product with the highest amount of THC.
Brands also allow companies to express their values, says Alexander Close, a partner in Tantalus Labs, a company promoting environmentally sustainable cannabis growing that has built a huge greenhouse near Vancouver. Close says the greenhouse is the first of its kind, and uses about 90 per cent less electricity than indoor grow-ops. “If a company creates a high-quality product, they want to be known for it,” he says. Even a picture on a package — a sun, for instance — helps to convey information, he says.
Trust and loyalty from good production practices only matter when products can be distinguished on a shelf, says Close.
Ray Gracewood, CEO of OrganiGram, says he can’t imagine the government will impose marketing restrictions for recreational marijuana that are stricter than those now in place for medical marijuana.
Medical marijuana companies are not allowed to advertise or promote their products, although that doesn’t extend to celebrity partnerships and attractively designed packages.
OrganiGram, which hopes to expand into the recreational market, has a partnership with the Trailer Park Boys, the trio of losers from the satirical TV series. There are no Buds by Bubbles for sale yet, though — that licensing deal is contingent on what happens with regulations surrounding recreational pot.
But when recreational pot is legal, OrganiGram hopes to “leverage the Trailer Park Boys brand equity to bring to market a product that is specific to their target demographic,” in Gracewood’s words.
The demographic would be mainly guys in their mid 20s to mid 30s. Don’t call them potheads, though. In marketing lingo they are “experienced users within the cannabis space.”
Gracewood says he supports advertising restrictions as well as the cautious approach displayed by the federal government toward the “complicated, momentous project” of becoming the first G7 country to legalize pot. However, he says plain packaging would unfairly associate cannabis with tobacco. “That only helps reinforce the stigma that cannabis currently has … any steps they take to make consumers think about cannabis the same way they think about tobacco is doing the industry a disservice.
“One of our high-level goals is to eliminate the stigma of cannabis to the general public. And allowing brands to exist within the space allows the industry to become relatively normalized, and removes that negative stigma.”
That goal, though, is not necessarily aligned with the intent of federal politicians, who have promised to “strictly regulate” cannabis, not promote its use, favour a “public health approach” and guard against “commercialization” of pot.
There is a contradiction of competing interests, says Chris Damas, a stock analyst who researches the cannabis industry. “The government has said, ‘We’re going to err on the side of public health.’ But obviously the stockholders and the insiders and the (medical marijuana producers), and if they are publicly traded the investors as well, have much more of a motivation to make some money, so branding and advertising is key.”