Pubdate: Thu, 07 Dec 2017
Source: Record, The (Kitchener, CN ON)
Copyright: 2017 Metroland Media Group Ltd.
Author: Laura Kane
Page: A8


Marketing, packaging of legal marijuana sure to cause headaches

VANCOUVER - David Brown's marijuana marketing students are often
shocked to learn how difficult it is to - well - market marijuana.

Advertising medical cannabis is essentially banned in Canada, with
some exceptions. Restrictions on recreational weed are set to be a bit
looser, but Brown still advises students to think of the constraints
as opportunities.

"These limitations can really aid in creativity. Marketing weed isn't
difficult, but marketing a highly regulated cannabis product is a lot
more of a challenge," said Brown, an instructor in Kwantlen
Polytechnic University's cannabis professional series.

As legalization looms, observers say Ottawa faces a tricky balancing
act on marketing. Large growers say branding is necessary to convince
consumers to switch to the legal market, while health advocates call
for plain packaging and strict advertising limits.

The Cannabis Act, which would legalize recreational marijuana next
July, would restrict marketing similarly to tobacco. It would ban
promotion that appeals to youth, contains false or misleading
statements or depicts people, celebrities, characters or animals. It
would allow ads that present facts or promote brand preference. But
they could only be shown in places where youth are not legally
allowed, or broadcast if "reasonable steps" have been taken to ensure
they "cannot be accessed by a young person."

The rules have been criticized as hazy. It's unclear, for example,
whether a commercial could air before a TV show or movie that is
intended for adult audiences or how internet ads would be policed.

Health Canada spokesperson Tammy Jarbeau said the "reasonable steps"
to ensure an ad cannot be seen by a young person would depend on the
circumstances. For example, websites could use age verification
mechanisms, she said.

"This would provide an opportunity to communicate factual information
about cannabis, as well as information about a product's brand
characteristics, to allow adult consumers to make informed decisions,"
she said.

She said the government was not considering changes to the advertising
provisions of the legislation, but if it's passed by Parliament,
Health Canada will develop guidance documents to help industry comply.

Seventeen licensed producers have formed a Coalition for Responsible
Cannabis Branding and put forward proposed guidelines, including that
ads be allowed on TV, radio and websites where at least 70 per cent of
the audience is expected to be over 18.

Provinces can introduce additional marketing rules. Quebec's framework
allows some ads in newspapers and magazines where 85 per cent of
readers are of the legal age, as well as in displays inside cannabis

"Off-loading it to the provinces is not the answer," said Lindsay
Meredith, a Simon Fraser University marketing professor, who added it
can lead to "spillover advertising," where ads that comply with rules
in one province are shown in another where they don't.

Mark Zekulin, president of Canada's largest licensed producer, Canopy
Growth, said branding breeds accountability. If consumers are going to
be more likely to remember their experience, companies will put more
effort into ensuring it's a good one.

"If everybody's in the same white packaging, maybe they'll remember
what they bought, maybe they won't," he said.

Health Canada recently proposed regulations that would limit the use
of colours and graphics on packages and require labels to have
specific product information, mandatory health warnings and a
standardized THC symbol.

They would also restrict brand elements, including requiring a
standard font, size and colour relative to other information on the
package. Public consultation on the rules ends Jan. 20.

Restrictions on fonts, graphics and colours open the door to brand
prohibition, limiting the ability of companies to differentiate from
each other and the black market, said Brendan Kennedy, president of
Tilray, a leading licensed producer.

"What you'll see is a race to the bottom, where all these products are
essentially competing on price," he said. "You'll see less investment
in high-quality products."

Rebecca Jesseman of the Canadian Centre on Substance Abuse and
Addiction said the regulations were positive overall but restrictions
on brand elements should be clearer.

"It's a tricky balance, because we don't want to promote increased use
and we don't want (packaging) to be flashy, but we do certainly want
to use it as a way to convey information effectively," she said.

"I think we're looking at something that's informative, truthful and
perhaps a little bit bland."

Canada can learn from U.S. states that have legalized pot. Colorado
allows print, radio, TV and internet ads if there's reliable evidence
that 70 per cent of the audience is over 21, while Washington state
requires ads to contain a number of warnings.

Colorado banned promotions that appeal to kids when it legalized
cannabis, but over time the rules became more specific, including
prohibiting edibles shaped like animals, said Lewis Koski, the state's
former marijuana enforcement director.

The federal government has given itself extra time to allow edibles,
such as candies and cookies, in the marketplace, with regulations
expected by July 2019. Koski, co-founder of consulting firm Freedman &
Koski, praised the strategy.

"Health Canada has done a really, really good job," he said. "They've
been very thoughtful in their approach and they recognize that this is
going to take some time and it's going to evolve."

The department said companies that violate the advertising or
packaging rules, if passed, could face licence suspensions or
revocations, fines of up to $1 million and potentially be referred to

Brown, the Kwantlen instructor, said he expects Health Canada to make
examples of those who don't comply early on. The department already
sends a stern letter about once a year to all the licensed medical
producers, he said.

"Inevitably, it's a cycle where they all agree and they all comply,
and then six or seven months later, they tend to drift away from that
compliance," he said. "We've yet to see any enforcement of that."
- ---
MAP posted-by: Matt