Cannabis in Canada: the lowdown on branding

04-04-2018

Cannabis in Canada: the lowdown on branding

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As legalisation of cannabis products for personal use approaches, the Cannabis Act contains restrictions on how a cannabis product or service can be marketed in Canada. Ashlee Froese of Froese Law spells out some of the rules for brand owners.

Slowly but surely, Canada has been taking measured steps to legalise cannabis for mass consumption. The cultivation of cannabis in Canada and sale for medicinal purposes is currently legal (and regulated by Health Canada), and its full legalisation for recreational consumption is imminent.

In November 2017 the Canadian House of Commons passed Bill C-45, titled “An Act respecting cannabis and to amend the Controlled Drugs and Substances Act, the Criminal Code and other Acts”. The effective date of implementation has not yet been determined.

The Cannabis Act amends criminal penalties for the possession of cannabis for personal consumption, but also bolsters criminal charges for supplying cannabis to minors and driving under the influence.

The decisions of how to regulate the distribution and sale of cannabis products lie at the provincial level. Although cannabis products will become legal, they will still be a regulated consumer product and service, similar to alcohol and tobacco products.

Branding issues

The Cannabis Act contains restrictions on how a cannabis product or service can be marketed in Canada. The definition of what constitutes a cannabis product or service is expansive and includes “cannabis, a cannabis accessory or a service related to cannabis”, as well as “a brand of any cannabis”.

It specifically delineates what constitutes promotion of a cannabis product, accessory or service: “… for the purpose of selling the thing or service, a representation—other than a representation on a package or label—about the thing or service by any means, whether directly or indirectly, that is likely to influence and shape attitudes, beliefs and behaviours about the thing or service”.

In addition, the definition of what constitutes brand preference promotion of cannabis, a cannabis accessory or cannabis service is also expansive: “… by means of its brand characteristics …”.

There is a specific carve-out on restrictions for promotion on a business-to-business level. However, restrictions are placed on the business-to-consumer model, such as:

  1. a) Appealing to young persons;
  2. b) By means of testimonial or endorsement (ie, it’s goodbye to influencer marketing campaigns);
  3. c) By depicting a person, character, or animal, whether real or fictional (ie, take care when creating your brand logo); and
  4. d) By presenting it or any of its brand elements in a manner that associates it or the brand element with, or evokes a positive or negative emotion about or image of, a way of life such as one that includes glamour, recreation, excitement, vitality, risk or daring (ie, take care with the messaging).

The Cannabis Act does proscribe limited scenarios where informational and/or brand preference promotions are allowed. However, the age limits of audience are considered, as are points of sale of authorised distributors.

The messaging contained in the promotion is also governed and extends to the health effects of cannabis products. The ability to sponsor events is restricted, as well as the ability to name an events facility. This means that if you host events and are approached by a cannabis-related company to sponsor the event, take care.

Similarly, the packaging and labelling of cannabis products is strictly regulated, as is the public display of cannabis products.

If the cannabis product or accessory is associated with a tobacco product, the branding, promoting and/or marketing of the product will be also governed by the Tobacco Act, which contains strict restrictions on how brands can penetrate the Canadian marketplace.

In addition, the Canadian government has released proposed regulations that accompany the Cannabis Act. The regulations further govern packaging and labelling of recreational cannabis.

As currently drafted, the regulations indicate that the Canadian government has adopted plain packaging, which mandates the inclusion of specific information and images and restricts creative branding by mandating modified plain packaging.

Proceed with caution

In this burgeoning industry, the Canadian government has tried to ensure that it does not become a ‘Wild West’ free-for-all.

Controversies surrounding cannabis are still prevalent. The Canadian government has taken great care in creating a system of checks and balances in the production, sale, distribution, branding and marketing of cannabis-related products and services.

Whether you are operating a cannabis retail company, or operating a business that is associating itself with a cannabis company (by way of sponsorship, endorsement, product placement, point of retail sale, brand execution, etc), take measures to ensure that you are compliant with the Cannabis Act, once it comes in force.

Also, bear in mind that the Cannabis Act and its regulations may be susceptible to further revisions as they proceed through Canadian parliament.

Ashlee Froese is a branding and fashion lawyer. She is the founder of Toronto-based boutique branding firm Froese Law. Her scope of practice includes trademarks, copyright, domain name, social media, marketing, advertising, packaging and labelling, licensing and commercial agreements. She can be contacted at: @froese_law.

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