Are Canada’s Cannabis Advertising Laws Justified or Overkill?

If you are a Canadian cannabis user, you may have noticed rather plain packaging and not much public advertising for the newly legal drug.

This is no mistake, but intentionally done by the Canadian government in order to prevent cannabis from appealing to those younger than the legal age.

Canada’s cannabis marketing laws are fairly strict — they don’t allow any public portrayal of cannabis related to a lifestyle that can be considered exciting or glamourous, any use of mascots or a public figure, or for companies to use more than one brand element.

The penalty for breaking cannabis advertising laws could be a fine of up to $1 million, depending on the severity of the violation.

What they do allow the companies is the following: to give purely factual information about the product, to carry out educational campaigns, and to promote the product in age-gated places, such as bars or dispensaries.

But with cannabis legalization picking up steam around the world, other places are offering more business-friendly rules and the ability to better build a brand, which leads to the question — are Canada’s rules justified or overkill? Let’s take a look.

A competitive disadvantage

Joshua Otten is one cannabis executive who argues that Canada’s ad laws are too restrictive.

Otten is the CEO and co-founder of Ronin, a cannabis branding agency for big names such as Pax Labs. He says that there is “general frustration” among companies that Canada’s cannabis advertising laws are causing them to lose market share.

Otten argues that the restrictions on cannabis branding ultimately hurt companies by inhibiting their ability to differentiate their products.

Instead of being able to create brand identities with robust ad campaigns, companies right now are simply listing facts about their products, such as its THC or CBD levels, due to the restrictions.

“If you’re hoping that your logo, color or packaging is going to be what your brand is, you’re already screwed from the start,” Otten said. “That’s not a brand, that’s a commodity.“

Otten points to the alcohol industry, which can air ads featuring lifestyle AND daring, as a guide for how cannabis should be advertised.

“They’re creating brands based on lifestyle and creating an identity so that when consumers have a choice, they say ‘I want this product over that,’” he said. “It’s about an association — that’s why someone wears a Red Bull hat versus someone else wearing a Monster Energy jacket.”

Given that studies have shown that cannabis can be less harmful than alcohol, Otten says there is “zero scientific evidence” cannabis should be limited as it is.

He also argues that brand identity is important for when the industry becomes international and Canadian companies want to appeal to foreign consumers. The beer industry has done this successfully in the past, such as Molson’s “I am Canadian” campaign in the 1990s.

Currently, Canadian cannabis companies can’t advertise in foreign markets any differently than they’re allowed to in Canada.

This hinders a huge opportunity to grab market share abroad, according to Otten, who points out that Canada’s population is smaller than California’s alone.

Is more advertising in the public’s best interest?

However, not everyone is as optimistic about the positive impact of more cannabis advertising.

University of Waterloo public health professor David Hammond says that ultimately cannabis companies’ mandate is to sell more pot so of course they want looser restrictions, but it may not be in the public’s best interest.

“It’s virtually impossible to [advertise] without also promoting consumption and appeal of the product more generally,” he said. “That’s the key.”

Hammond knows a thing or two about the effects of advertising — he has testified on behalf of governments fighting pot, tobacco and alcohol companies, and has researched the subject for over 15 years.

He says that the World Health Organization has concluded that advertising is connected to the adoption of tobacco smoking, and the same could apply to cannabis.

The problem is there is no guarantee that people under the legal age won’t see the advertising.

Hammond points to the vaping crisis in Canada and the U.S. that has led to over 50 American deaths and over 2,400 cases. Before news broke of the illnesses, advertising was prevalent in convenience stores that led to an increase in youth vaping, he says.

Hammond isn’t worried, though, that restrictive advertising puts companies at a competitive disadvantage.

He points to the tobacco industry, which he says has been making that argument for 40 years, but continues to make “handsome profits” in Canada, where tobacco restrictions are even stronger than for cannabis.

“It sounds to me like an idle threat,” Hammond said.

Neither should the alcohol industry be a model for Canada’s cannabis advertising laws, Hammond argues.

Instead, he says that for some reason alcohol companies have gotten a pass on basic rules applied to other industries, such as listing nutritional facts on its products.

“The question of why alcohol has got a pass on these things is probably more to do with social norms and politics than it does with public health and evidence,” he said.

Ultimately, Hammond thinks that Canada’s cannabis laws are working because the numbers have shown there hasn’t been a big increase in exposure to advertising since cannabis was legalized in the country.

“[The restrictions] are doing what they’re meant to do,” he said. “But I certainly understand why the companies would like more [advertising].”

Making the most of workarounds

While Canada’s laws are strict, they are not necessarily a death sentence for cannabis companies in the country to get their message out.

Sandy Rossignol is one marketer who is slowly learning the ropes of how to skirt around the rules to help companies brand themselves.

Rossignol owns and operates Studio 549, a video marketing boutique based in Victoria, British Columbia. He is currently working on a video ad series for the city’s FARM dispensary.

To be both compliant and send a positive public message, Rossignol has decided to create the ad in the form of a Public Service Announcement (PSA). He points to famous PSAs such as Canada’s “The House Hippo,” which promoted media literacy in the late 90s, as a guide for the direction cannabis advertising can go in.

“It’s the difference between Budweiser promoting a lifestyle and a really good PSA like we had when we were growing up in the 90s,” Rossignol said.

He explains that PSAs and educational content are a good route to take for cannabis advertisers because they are exempt from many of the Cannabis Act’s restrictions on content.

Rossignol figures that if he is representing real-life facts in his PSA, such as highlighting Canada’s diverse cannabis consumers, then it should be compliant.

“Can we not show a guy in a suit? Or can we not show somebody who’s an old person who smiles? Does that evoke a positive emotion and vitality?” he asked. “It’s kind of hard to say.”

Rossignol explains that the Cannabis Act’s language is somewhat vague and much of it is left to interpretation.

This has him treading lightly. If his ad is found non-compliant it could result in a fine, having to scrap the video or worse — losing a marketing license that is difficult to obtain from the government.

Otten agrees that the law’s ambiguity can leave the door open to interpretation, and admits that some companies have pushed that ambiguity to areas that seem non-compliant, but haven’t received any punishment.

Otten says ambiguity is “scary,” though, and leaves companies in limbo, not sure if they should push the rules or play it safe.

For example, Otten says big Canadian media company Rogers opted out of doing any work with cannabis about six months ago because of that ambiguity — they don’t want any risk of being fined.

“Ambiguity is not good for anyone,” he said.

However, Otten is also concerned about greater clarity that could limit advertising even further.

For now, he is pushing companies to do “corporate social responsibility” work to send a positive brand message and also give back to communities.

He points to Canopy Growth as an example, which has partnered with Parent Action on Drugs and Canadian Students for Sensible Drug Policy to help inform responsible decisions on cannabis use.

“There’s still plenty of room to operate compliantly in Canada with marketing and content that most brands are still not taking advantage of,” he said.