Cannabis advertising a bender for Canadian companies

By Kieran Delamont

2019-08-17

Canadian cannabis industry observers have noticed something unusual in recent weeks. Major industry players Hexo, Aurora and Tweed have all taken to social media to promote their products.

That’s a big no-no if you are going by the letter of the law. Like tobacco, cannabis advertising is prohibited in Canada. The rules also ban sponsorships. But that hasn’t stopped celebrities like Seth Rogen and Wiz Khalifa, among others, from putting their star power behind Canadian cannabis brands.

Questions surrounding advertising rules on cannabis – and how far Health Canada is willing to go to enforce them – have persisted since recreational cannabis became legal in Canada.

Some producers have been more deliberate than others about bending the regulations. But all of them have been careful not to promote their products – until now.

Could recent forays on social media be a trial balloon?

The Globe and Mail’s subscribers-only Cannabis Professional publication posits that Health Canada may be ignoring the trend. Cannabis industry execs have long complained that advertising rules put them at a competitive disadvantage.

In the U.S., meanwhile, there has been an explosion in cannabis advertising.

A new report from the marketing firm Dash Two estimates that U.S. cannabis producers spent $1.1 billion on cannabis advertising in 2018. That number is expected to double in 2019 with some two-thirds going to print advertising.

“It’s kind of the Wild West,” says Dash Two president Gino Sesto.

Billboards pushing cannabis brands have gone up in Los Angeles, for example, where there are relatively few restrictions around street-level advertising. But that has also sparked concerns about promoting cannabis to minors.

Bad or not, cannabis advertising is a welcome trend for a newspaper industry that has been bleeding ad revenue in recent years.

“While newspapers may be losing money in other advertising categories,” says Sesto, “marijuana could provide a nice salve to those wounds.”

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