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Marketing Plan Precautions

Following the passage of Bill C-45, licensed producers began spending big on advertising. Multi-story electronic billboards in Toronto’s Dundas Square, sponsoring and hosting booths at summer music festivals and cultural events, and online advertisements on social networks have become commonplace. But, that is about to change.

On October 17, 2018, the Cannabis Act came into force, and Health Canada has been clear that prohibitions contained in the legislation on advertising will be enforced. For retailers, getting a clear answer on what advertising is allowed continues to be a challenge.

Contained within the text of the Cannabis Act is direction on marketing and branding restrictions. It prohibits incentives, sponsorship, testimonials, celebrity endorsements, international promotion, and more. Related provisions in the Controlled Drugs and Substances Act, the Food and Drugs Act, and the Narcotic Control Regulations (NRC), also restrict advertising. For example, NRC section 70B says “no person shall publish or cause to be published or furnish any advertisement to the general public respecting a narcotic.”

For your retail store, restrictions will apply not just to how you advertise and market outside of your store, but for marketing at the point of sale as well. For example, you must not promote the sale of cannabis products through inducements that seek to provide you and your staff with incentive to sell the product of one licensed producer to the preference of others. You may have point of sale promotions in your store, however, they are limited to price and general information about the product. Given the purpose of cannabis retail stores is to supply non-medical product only, you and your staff may not make any health claims about the product. However, you can provide information about the strain, its typical effects and available quantities.

Seek counsel from relevant provincial cannabis regulatory agencies, from Health Canada, or from one of many of the industry experts…

To make things even more complicated, each province has layered on some of their own specific provisions for advertising, inducements, and branding and placed limits on what products besides cannabis and cannabis accessories can be sold in your store.

In BC, while you may only sell cannabis and cannabis accessories, they will not allow for the sale of snacks or non-alcoholic drinks. In Alberta, a cannabis retail store is only permitted to sell accessories that promote responsible and legal storage or consumption of cannabis. Alberta stores are also required to sell child-proof lockable containers for storage. In addition, similar to BC, they are not able to sell any consumable product other than cannabis or anything intended to be mixed or consumed with cannabis.

In Saskatchewan, it is permitted for stores to sell cannabis industry magazines, branded t-shirts, ashtrays and artwork, but the sale of other non-cannabis related items is banned. Saskatchewan retailers will also have the ability to sell their products online, though rules around promoting your store and website still refer licensees to the Cannabis Act and Health Canada for more information. In Ontario, the new provincial government just recently indicated their intention to alter the path of cannabis retail in the province and as such these details are still to be determined. Lastly, Manitoba has indicated they will release their own enabling legislation though the information was not publicly available at the time of writing this article.

While all of this amounts to a somewhat frustrating and highly regulated retail experience, it is important to remember that this goes back to the federal government’s stated purpose for the legalization of adult-use cannabis. Their objective to eliminate the criminal component in cannabis and keep the substance out of the hands of children is contingent on legalizing, regulating, and restricting access.

Navigating the layers of rules will not be easy. Seek counsel from relevant provincial cannabis regulatory agencies, from Health Canada, or from one of many of the industry experts that have been preparing for and studying the development of the legal framework since its inception.

Retailers should take comfort that Prime Minister Justin Trudeau has said cannabis legalization is a process, not an event. As such, while we should rightfully celebrate the event that is October 17, we also look forward to additional clarity, and hopefully over time, a little loosening of the marketing and advertising restrictions.

Kim Haakstad, Cannabis Connect, Global Public Affairs –