The Hazy Boundaries of Canada's Cannabis Advertising Restrictions
Coming into force on October 17, Canadaâs legislation to legalize cannabis contains provisions that ban endorsements and testimonials, as well as depictions of people, celebrities, and characters on cannabis packaging.
But just how far do the provisions go? What will these restrictions mean for Canopy Growthâs line of Snoop Dogg-affiliated products, or the infamous appointment of KISS bassist Gene Simmons as Invictusâ chief evangelist?
The Cannabis Act says that âit is prohibited to promote cannabis,â including âby means of a testimonial or endorsementâ and âby means the depiction of a person, character or animal, whether real or fictional.â The same prohibitions apply to cannabis product labels.
However, the Canna bis Act permits limited advertising via âbrand-preference promotion,â which involves promoting a brandâs specific characteristics. The Cannabis Act also permits âinformational promotion.â
But just how far can licensed producers go with their advertising before Health Canada takes notice and considers enforcement action?
Cannabis Lawyers Parse the Facts
For more insight, I spoke with two leading cannabis-industry lawyers: Toronto-based Matt Maurer, who heads the Cannabis Law practice at Minden Gross LLP, and Ottawa-based Trina Fraser, who heads the CannaLaw group at Brazeau Seller LLP in Ottawa.
âThey say itâs okay because Gene Simmons isnât promoting the product, heâs promoting the company,â Maurer tells me. âWhere is the line?â
Fraser, who sat front row at Simmonsâ MJBizCon talk, believes the former rock star was very carefully coached to avoid crossing any lines. âEvery speech or statement Iâve read from him says â I am not here to promote or sell cannabis, I am here to promote the stock of Invictus MD.â You can tell theyâre positioning it as not being an endorsement or promotion of cannabis, but rather promotion of a stock of a publicly-traded company that just happens to own a wholly-owned subsidiary that happens to sell cannabis.âThe Cannabis Actâs prohibitions on endorsements and testimonials only get triggered when representations âpromoteâ cannabis.
Maurer understands the argument. âSome would say âWhy shouldnât they be able to talk about how great the company is?â But on the other hand, it seems like itâs circumventing the law if you just give Hulk Hogan, for example, a bunch of shares.â
That distinction is important, because the prohibitions on endorsements and testimonials in the Cannabis Act only get triggered when representations âpromoteâ cannabis.
That word is defined as âto make, for the purposes of the selling the thing or se rvice, a representation about the thing, whether directly or indirectly, that is likely to influence and shape attitudes, beliefs and behaviours about the thing or service.â Cannabis companies could argue that their use of a celebrity does not strictly fall within that definition, and both Fraser and Maurer agree the whole industry could use more guidance from Health Canada.How Trina Fraser Became the Canadian Cannabis Industryâs Go-To Lawyer
âI donât think the wording makes it clear where the line is,â says Maurer. âWhen Invictus says Gene Simmons isnât promoting the product but is just an employee, that certainly defeats the spirit what [the Cannabis Act] is trying to do. I think they need to make an amendment to make it more clear, or put out regulations so itâs consistent and everyoneâs playing by the same rules.â
And what abou t Canopyâs âLeafs by Snoopâ lineâ"will it become prohibited to name your line after a celebrity or feature a quote and signature from a star?
âSnoop signing his box is putting his stamp of approval on the product,â Maurer says. âIs it an explicit endorsement? No, so it could go both ways. But my personal opinion is that it would be considered an endorsement and wonât be allowed.â
In lieu of legislative clarity, the industry will certainly continue to push the rules to their limits.
âI donât have issues with companies pushing the envelope because thatâs the only way youâll get clarity,â says Maurer. âThese are questions that have to get resolved, whether thatâs by amendments to the language or a policy directive clarifying whatâs permitted and whatâs not.â
Pushing the Envelope Until the Government Pushes Ba ck
As for now, pushing the envelope is the name of the game. Canadian cannabis producers signed on to sponsor Canadaâs summer music festivals before the new anti-promotion laws were announced. As Leafly prepared to publish this article, Health Canada issued a press release condemning event sponsorship âand other promotional activities by federally licensed producers of cannabis,â citing a section of the Narcotics Control Regulations that forbids publishing any advertisement to the public in respect of âa narcotic.â Health Canada ended the release citing the possibility of imprisonment and a fine of $5 million.
What will happen next is anyoneâs guess. But ahead of October 17, licensed producers of cannabis should maybe slow down with their celebrity endorsements and other legally-risky promotions and stick with more clearly compliant options.Curious About Cannabis?Explore dispensaries nearby Harrison Jordan Harrison Jordan is a graduate of Osgoode Hall Law School in Toronto and enjoys reading and writing about the regulatory affairs of cannabis in Canada and around the world. Close Sign Up for More Leafly News Thank you for subscribing!