Canada: Promotional Problems — The Challenge Of Promoting Cannabis Products, Services And Accessories

Last Updated: November 30 2018
Article by Matt Maurer

Everyone in the industry had fair warning that promoting cannabis products, services and accessories was going to be exceptionally difficult from a regulatory perspective. When the Cannabis Act was first tabled by the Federal Government on April 13, 2017, section 17 explicitly provided that any form of promotion would be prohibited, unless otherwise authorized under the legislation. Neither section 17 nor the rest of the sections in the legislation pertaining to promotional activities changed in any material way between the first reading on April 13, 2017 and the version of the legislation that was ultimately given Royal Assent on June 21, 2018.

Licensed producers with the appetite to stomach some (in my view minimal) risk, saw not only the writing on the wall, but also an opportunity. The time period between when the Cannabis Actwas introduced and when it ultimately came into force on October 17 provided an 18-month window in which companies could push the envelope on promotion and advertising under the existing legislation, namely the Access to Cannabis for Medical Purposes Regulations (ACMPR) and the Narcotic Control Regulations (NCR) which are made under the Controlled Drugs and Substances Act.

Neither the ACMPR nor the NCR were designed to deal with aggressive promotion and advertising.  The NCR only contains one section that relates to advertising and promotion and simply:

(a) requires any advertising respecting a narcotic to display the symbol “N” clearly and conspicuously in the upper-left hand quarter;

(b) prohibits the publishing or furnishing of any advertisement to the general public respecting a narcotic; and

(c) prohibits the advertising of a certain (non-cannabis related) preparation within a pharmacy.

Some producers pounced at the opportunity to build up brand recognition and good-will in a relatively lax regulatory environment that was going to disappear come October, 2018.  What we saw was a series of pop-ups, websites, sponsored music festivals and events throughout the country.  Some companies complained at their competitors’ conduct which they felt was illegal.  Health Canada took a dim view of the conduct as well which ultimately resulted in Health Canada issuing a warning on July 13, 2018.  The warning noted that Health Canada was “concerned by the decision of some federally licensed producers of cannabis for medical purposes to sponsor events, such as music festivals, and engage in other promotional activities”.  The problem was that at that time the government was essentially powerless to put a stop to the conduct.  The warning pointed out that the conduct was “contrary to the Government’s goal to protect public health and public safety” but the government could only point to section 70 of the NCR and make a vague reference to the Food and Drugs Act, neither of which technically prohibited much of the conduct that was ongoing at that time.

What is most interesting is what has transpired since October 17, 2018.  The companies who were on the edge pushing the promotional envelope have drastically altered the way they go about their business.  Gone are sponsorships of festivals and concerts and in their place are things like messages about responsible consumption and impaired driving.  Clearly these companies understood not only the 18 month window that existed, but more importantly that it would close on October 17, 2018 and the promotional path forward would have to be a different one.  These companies understand that despite the heavy restrictions on promotional activities in the Cannabis Act, exceptions do exist and there are still a number of creative, and legal, ways to build brand awareness and a following.

Conversely, there are clearly companies who have not invested the time, cost or energy in discerning what promotional activities are and are not permitted under the Cannabis Act.  Less than two weeks after legalization, Health Canada announced that it had issued warnings to no less than seven cannabis producers about their promotional activities since the Cannabis Act  came into force.  Advertisements for sponsored events (one of the most explicitly clear prohibitions in the legislation) continue to surface as do questionable statements and images used in the promotion of cannabis.

From a business perspective what strikes me as most concerning about companies who do not understand the promotional restrictions (and more importantly the exceptions to the restrictions)  is not the penalties that may be levied by the government but rather how far they will continue to fall behind the companies that do understand.  In a market where everyone’s packaging is nearly identical and there are limited ways to differentiate yourself in the eyes of the consumer, opportunities to stand out cannot be missed.  Unfortunately for some, fortunately for others, many remain two steps behind those who are taking the time and investing the resources into understanding the regulatory framework and coming up with creative ways to effectively build their brand within it.

This article was originally published in Grow Opportunity Magazine. To read the article there, visit the Grow Opportunity website.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Matt Maurer
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions