Canadian weed producers want to advertise like beer companies

“There is ample evidence to show marijuana is a more benign substance than alcohol.”
July 24, 2017, 4:12pm

A group of major marijuana producers in Canada are banding together to convince the federal government to ease up on restrictive regulations when it comes to how recreational weed should be branded and promoted.

The sixteen producers, who control over 90 percent of the legal medical marijuana market in Canada have turned to the Advertising Standards Council of Canada for help in developing advertising guidelines, which they hope will mimic that of the alcohol industry.

“What we should do in this country is we should treat cannabis like beer, wine and liquor. We should not be reinventing the wheel at this point,” said Cam Battley, Executive Vice-President of Aurora Cannabis, one of the sixteen producers lobbying for looser rules when it comes to promoting cannabis for public consumption.

“There is ample evidence to show that marijuana is a more benign substance than alcohol. We believe there’ll be a substitution effect on alcohol by cannabis products. That’s why there’s no need to do anything different when it comes to advertising,” Battley told VICE Money.

The federal government’s proposed Cannabis Act prohibits any “promotion, packaging and labelling of cannabis that could be appealing to young persons or encourages its consumption.”

It also proposes banning the public display of marijuana products in storefronts, which means they they have to be plainly packaged, and hidden — similar to how cigarettes are currently sold.

“Look, the group of us have different views and thoughts on how we want our products to be advertised, but if we can walk forward with advertising regulations that are more closely defined like alcohol, that would be our preference,” Vic Neufeld, CEO of Aphria Inc., told VICE Money over the phone.

“We want to be able to reach out to consumers of recreational products like alcohol, to get them to spend their entertainment dollars on weed, just like they spend it on alcohol,” Neufeld said.

The argument the marijuana sector is pitching to the federal government is that in order to be able to supplant the black market for recreational weed, they should be granted the flexibility to advertise in a way that draws consumers to want to purchase legal weed.

“We know we can’t have advertising that appeals to children — we agree with the government on that. But we should be able to differentiate our brands, and signal to consumers that we are an attractive alternative to the black market,” said Jordan Sinclair, Director of Communications at Canopy Growth Corp., currently the biggest producer of legal medicinal marijuana in Canada.

Advertising not the only priority

Canada is poised to legalize the use of recreational weed by July 1, 2018 but the details of how the drug will be packaged and sold have yet to be ironed out.

Just last week for instance, the provinces announced they would seek an extension on the July 2018 date if issues related to safety, taxation, training for distributors and public education aren’t adequately addressed by November this year.

For Aphria’s Neufeld, this back and forth federal-provincial tussle could spell trouble for his company’s production timeline.

“Advertising guidelines are less of a priority for us right now. I would like to know when the government will give us some clarity on weed-infused products. Our e-pens, topicals, sublinguals… will we be able to sell those in the recreational market?”

“We are building a 700,000 square feet greenhouse. By December I will need exact clarity on products, so I can figure out whether to eliminate certain capital expenditures,” said Neufeld.

But when it comes to advertising, weed analyst Vahan Ajamian at Beacon Securities, thinks it’s unlikely that the government will roll back its hard stance.

“Unless it’s an LCBO-type model where the government owns the distributor, it is likely that they will continue leaning towards a tobacco-type model. The last thing the government wants is to be deemed as irresponsible in this legalization process.”

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