Brand development vital for Canadian cannabis companies

Government restrictions on packaging and on using celebrities to market products makes word of mouth, swag more important to gain customers

Portland-based Higher Promos has produced a wide range of promotional items for cannabis-sector clients and was at a business conference in Vancouver on June 25 | Glen Korstrom

Canadian cannabis companies will lack many of the marketing opportunities that American counterparts enjoy south of the border because restrictive Canadian regulations forbid everything from celebrity endorsements to the seemingly banal lure of different colours on packaging.

Attendees at the International Cannabis Business Conference, held June 25 at Vancouver's Sheraton Wall Centre, however, heard that it is because of these restrictions that brand building and word of mouth will become vital for many companies' survival. 

Packaging for cannabis products sold in Canada after legal sales launch October 17 must have a single uniform colour, a standardized font style and no logo. Those restrictions limit licensed producers' ability to make dazzling packaging that encourages consumers to give a product a try. 

Advertising is also limited with licensed producers unable to claim in marketing material anything about the product's price. Nothing in advertising could also be reasonably believed to be appealing to young people. That means not only no celebrity endorsements, or endorsements from fictional characters, but also no presentation of the brand in a way that associates the product with a particular way of life. 

"We can’t insinuate that this strain is good for drumming and this one is really good for snowboarding," said B.C.-based Hilary Black, Canopy Growth Corp.'s director of patient education and advocacy.

"We’re not allowed to talk about lifestyle or quality or performance or effects."

The silver lining in these onerous restrictions, she believes, is that recreational-cannabis legalization is going to usher in a "competition of creativity" among media and marketing agencies as Canadian society moves from what she calls an "era of civil disobedience to an era of creative compliance."

The Senate, before its third reading of the Cannabis Act, had amended the bill to forbid licensed producers from putting brands on merchandise – a prohibition that would have kept brands off T-shirts, baseball caps, golf balls, dried-flower grinders and other items. 

The House of Commons, however, refused to accept that amendment and the Senate relented. That means that brands in Canada will be able to don a wide range of household items. The B.C. government has said that those items will not be able to be sold in either government-run or private cannabis stores but head shops that do not sell cannabis will likely carry a wide range of these products. 

Black also called for honesty among consumers and advocates.

"Now is the time for us to come out of the closet as people who use cannabis for pleasure and to manage our stress," Black said.

"I'd also think it's important to tell stories about somebody who is using cannabis in a way that maybe isn't healthy and how to address that. One of the things I've always struggled with is cannabis advocates who present cannabis as a panacea, as a cure for everything, a fix for everything, and they won't adequately address the legitimate concerns around driving or the legitimate concerns around youth consumption."

That honesty, she believes, will go a long way to having cannabis accepted by the mainstream population and could prompt government to loosen marketing rules. 

Hilary Black | Glen Korstrom

(Image: Canopy Growth Corp. director of patient education and advocacy, Hilary Black speaks on a panel at the International Cannabis Business Conference in Vancouver June 25 as Liberty Health Sciences CEO George Scorsis looks on | Glen Korstrom)

Until changes happen, however, cannabis producers will have to be savvy not only in how to create quality products that provide the desired effect, they also must put thought into brand development that creates the desired buzz among consumers, said Liberty Health Sciences (CSE:LHS) CEO George Scorsis, who was on the same panel as Black. 

"What I'm seeing right now is that in many cases people are great cultivators, but do they know how to develop a brand?" said Scorsis, whose Toronto-based company has invested in many U.S.-based medical-cannabis companies.

"You see great brand developers who probably aren't that great cultivators. Then you're seeing sometimes both of those but not great at regulatory [adherence]."

He then related that to what he sees as the the hallmarks of what great consumer packaged-goods brands are: they are great brand marketers, great regulatory managers and great at producing great products and having the supply chain to deliver them.

Drake Sutton-Shearer | Glen Korstrom

(Image: PRØHBTD Media CEO Drake Sutton-Shearer speaks about branding at the International Cannabis Business Conference June 25 in Vancouver | Glen Korstrom)

PRØHBTD Media CEO Drake Sutton-Shearer moderated the panel and later gave his own presentation on brand development and how traditional and new media will be key for many brands. 

"Content is one way [to get your brand out] because it is not biased," he said. "If you produce great content, you can tell great stories. If there are platforms online where you can distribute that content, and there are many, you can get people to learn about the stories you want to tell."

If you are interested in learning more about opportunities in the cannabis sector, and hearing a panel presentation that Business in Vancouver is hosting on July 12, check out BIV's Business Excellence Series: Legalizing Cannabis at the Vancouver Club.