Subliminal Success: Navigating Cannabis Advertising in Canada Amid Regulations

Introduction

The Canadian cannabis industry, despite facing stringent advertising regulations, has shown remarkable resilience and growth. In 2022, the Canadian recreational cannabis market reached an all-time high, finishing the year with a staggering $4.6 billion in revenue, marking a 13% growth since legalization​​. This upward trajectory is projected to continue, with the industry's revenue expected to hit US$3.90 billion in 2023 and forecast a steady annual growth rate of 15.40% from 2023 to 2028​​.

Regions like Ontario and British Columbia have witnessed particularly impressive growth. Ontario's cannabis sales soared by an astonishing 295.8%, while British Columbia experienced a 140% increase between May 2020 and May 2023. Even provinces like Saskatchewan and Alberta, with smaller increases of 71.5% and 62.6% respectively, contribute to the nationwide surge in cannabis consumption​​.

This growth narrative, however, comes with its unique challenges. Canadian cannabis businesses, including High Flyer Media's partners, grapple with navigating the complex web of regulations that govern cannabis advertising in Canada. These regulations are stringent, aimed at controlling the promotion of cannabis and related products to ensure responsible consumption. For a company like High Flyer Media, these limitations necessitate innovative and strategic approaches to marketing and brand promotion.

Understanding and creatively working within these regulations is key to tapping into the rich and evolving Canadian cannabis culture. Our experience at High Flyer Media has taught us that success in this industry doesn't just come from understanding the rules but mastering the art of subtlety in advertising. It's about striking a balance between compliance and creativity, ensuring that the essence of cannabis culture is communicated effectively without crossing regulatory lines.

In this article, we will delve into the strategies and tactics that can be employed to navigate the complex landscape of cannabis advertising in Canada. We aim to offer insights that not only comply with regulations but also resonate deeply with the Canadian cannabis consumer, a demographic that is continuously expanding and evolving.

Understanding Canadian Cannabis Regulations

The cannabis industry in Canada operates under a complex regulatory landscape, particularly concerning advertising and promotions. A pivotal moment in understanding these regulations came on June 12, 2023, when the Alberta Gaming, Liquor and Cannabis Commission (AGLC) provided crucial guidance on the permissible content for cannabis advertisements in Alberta. This decision is significant as it offers clarity in an area that has generally lacked specific guidelines, thereby helping cannabis advertisers across Canada navigate these complex rules​​.

Key Regulatory Challenges and Restrictions

1. Ambiguity in Regulations: The AGLC’s policies on cannabis advertising are generally drafted, offering little in the way of concrete guidelines or examples. This broad approach allows for flexibility but also leaves advertisers to interpret the policies, resulting in potential financial, operational, and reputational risks​​.

2. Prohibition on Certain Types of Content: An investigation into Canna Cabana Inc.’s promotional strategies revealed the specific types of content that are non-compliant with AGLC policy. This includes the promotion of irresponsible cannabis consumption, the use of testimonials or endorsements, and claims of positive or negative impacts as a result of cannabis usage​​.

3. Guidelines for Compliant Advertising: To avoid penalties, it’s crucial for retailers and their advertisers to avoid comparative phrases that suggest immoderation, such as "get higher." Moreover, even anonymous consumer product reviews are considered endorsements and are subject to prohibitions against claiming positive impacts from cannabis consumption​​.

4. Importance of Consultation with Regulators: One of the key takeaways for maintaining compliance is the importance of consulting with the appropriate provincial regulator, especially when an advertising campaign is in a gray area. This proactive approach can support a due diligence defense and help avoid non-compliant advertising​​.

High Flyer Media's Perspective

At High Flyer Media, we understand the delicate balance required to navigate these regulations. Our approach is to focus on the educational aspect of cannabis, highlighting its diverse uses and cultural significance in Canada without making direct claims about its effects or encouraging irresponsible consumption. We believe in leveraging storytelling and subtle messaging to connect with our audience, emphasizing the lifestyle and cultural aspects of Canadian cannabis without contravening regulations.

The evolving nature of these regulations requires continuous vigilance and adaptation. Our strategy includes regular consultations with regulatory bodies to ensure our content remains compliant while effectively reaching our audience. By focusing on the cultural and lifestyle aspects of cannabis in Canada, we can create engaging, informative content that resonates with consumers and supports our clients' goals within the regulatory framework.

The Role of Cannabis Culture in Branding

The cultural landscape of cannabis in Canada, especially post-legalization, has been a significant driving force in shaping the branding strategies of cannabis companies. The legalization of cannabis in 2018 marked a turning point, launching a multitude of brands into the "green rush" to capture market share. This shift from a loosely defined marketing framework pre-legalization to a highly regulated environment post-legalization forced brands to rethink their approach to connecting with consumers​​.

Understanding the Audience

The core of successful cannabis branding lies in understanding the audience. Cannabis brands need to identify their unique position in the market and tailor their messaging accordingly. For instance, a wellness brand targeting those seeking natural solutions will have a different approach compared to a premium flower brand looking to attract cannabis enthusiasts transitioning from the illicit to the legal market. The key is to develop narratives that resonate with the specific needs and preferences of each segment of the cannabis consumer base​​.

Navigating Regulatory Restrictions

The Cannabis Act imposes significant limitations on traditional and digital marketing, making earned media and relationship-building critical components for brand awareness. Tapping into existing relationships and leveraging them to co-create stories can help circumvent the challenges of traditional advertising restrictions. Brands must also navigate the negative perceptions attached to “stoner culture” and work towards re-educating the public to view cannabis in a new, more positive light​​.

Community Building and Engagement

Community-building is another crucial aspect of cannabis branding. Creating an owned database for direct communication about the brand is essential, given the constraints of the Cannabis Act. This process involves more than just collecting emails; it requires engaging the community with smart content strategies and leveraging the audience for word-of-mouth promotion. Hosting closed, age-gated events with educational programming or unique experiences can be an effective way to engage and expand the community. Strategic partnerships, like collaborations between wellness brands and fitness platforms, can also be effective in reaching new audiences​​.

High Flyer Media’s Approach

At High Flyer Media, we recognize the importance of aligning with cannabis culture in our branding strategies. Our approach involves deeply understanding our audience's preferences and crafting messages that speak directly to their interests and values. We focus on building strong community ties and utilizing creative content strategies to engage our audience. By fostering these relationships and continuously adapting to the evolving cannabis culture, we aim to create branding that not only resonates with our audience but also sets our clients apart in the competitive Canadian cannabis market.

Creative Strategies in Cannabis Advertising

Navigating the Canadian cannabis market's regulatory landscape has led to innovative and creative advertising strategies by licensed producers (LPs). Despite popular belief that regulations severely limit branding opportunities, many LPs are finding unique ways to convey their stories and brand identity within the confines of the law.

Innovative Product Branding and Packaging

Carmel Cannabis, for example, highlights the importance of anchoring a brand in quality, bypassing the need for celebrity endorsements and billboards. They were the first to bring key product information to their packaging, such as lineage, aroma, and flavour, and uniquely packaged their pre-rolls in glass tubes with corks. This approach leverages the packaging itself as a branding tool, a critical strategy given the Cannabis Act's strict packaging requirements and limitations on advertising psychoactive effects or lifestyle connections​​.

Education-Based Marketing and Budtender Engagement

Another effective strategy is education-based marketing. Carmel Cannabis, through their collaboration with CannSell, launched 'Carmel College,' providing Craft Cannabis 101 to retail partners. This strategy helps differentiate their product in a saturated market. Similarly, BZAM focuses on community-building, particularly with budtenders, who significantly influence consumer purchases. By educating budtenders and consumers on product specifics, LPs can indirectly market their brand through these key influencers, navigating around direct-to-consumer advertising restrictions​​.

Digital Platforms and Direct Consumer Engagement

With restrictions on where cannabis products can be advertised, individual LP websites have become crucial platforms for brand storytelling. Pure Sunfarms, for example, uses its age-gated website to provide information and establish its unique brand identity. This digital focus allows LPs to directly communicate with their audience, offering detailed product information and brand stories that resonate with consumers​​.

Targeted Product Strategies

Understanding the target audience and catering to their specific needs is paramount. Pure Sunfarms focuses on informing consumers about new products and explaining the rationale behind different product launches, addressing the occasions and needs they fulfill. This targeted approach ensures that marketing efforts are focused and impactful, connecting with the audience in meaningful ways​​.

High Flyer Media's Take

At High Flyer Media, we advocate for a blend of these creative strategies. Our approach involves harnessing the power of storytelling and education to foster a deep connection with our audience. We believe in the strength of digital platforms to engage directly with consumers, offering them valuable insights into the cannabis culture and lifestyle. By embracing these innovative approaches, we aim to create a distinctive and memorable brand presence in the Canadian cannabis market, all while staying within the bounds of regulatory compliance.

Digital Marketing and Canadian Cannabis

The digital marketing landscape for cannabis in Canada is rapidly evolving, reflecting global trends and unique challenges within the industry. The global legal cannabis market, valued at $17.8 billion, is projected to grow at a compound annual growth rate of over 25% until 2030. This growth is driving increased investment in advertising and marketing to combat stigmas, expand brand awareness, and drive sales​​.

Trends and Strategies in Digital Marketing

1. Celebrity Partnerships and Entertainment Integration: Many cannabis brands, facing strict platform rules on spaces like Facebook and Instagram, are turning to celebrities and entertainment collaborations. Curaleaf, for instance, focuses on connecting cannabis with communities through music and art, finding these mediums highly relatable for cannabis consumers​​. Celebrity endorsements and even celebrity-headed brands are gaining traction in the cannabis space, as seen with personalities like Gwyneth Paltrow and Willie Nelson investing in CBD and cannabis ventures​​.

2. Product Innovation Beyond Flower: The industry is witnessing a shift from traditional flower products to a broader range of offerings. A decade ago, flower accounted for 80% of sales, but now it's down to 47%. This change reflects the growing consumer interest in edibles, infused products, and other manufactured cannabis goods​​.

3. Out-of-Home Advertising: Out-of-home (OOH) advertising like billboards and signage remains a vital channel for cannabis brands. It's one of the few advertising methods that doesn't face the risk of being taken down or questioned, making simple and straightforward OOH advertisements an effective tool​​.

4. Wellness-Focused Messaging: As health and wellness trends grow, cannabis brands are finding lucrative opportunities in this space. For example, Curaleaf started as a medical marijuana business and remains committed to positioning cannabis as a wellness product. This positioning is increasingly important in the industry​​.

5. CBD as a Gateway: CBD, already popular in the health and wellness sector, is seen as a gateway into the THC world. Brands are using CBD to build trust and familiarity with consumers, potentially leading them to explore other cannabis products. This approach is particularly effective in introducing new consumers to the cannabis market​​.

6. Learning from the Alcohol Industry: The cannabis industry is taking cues from the alcohol sector, particularly in developing a marketing code that sets responsible advertising standards. This approach helps in building trust with platforms and networks, ensuring responsible promotion of cannabis products​​.

High Flyer Media's Perspective

At High Flyer Media, we recognize the importance of these trends and strategies in shaping our digital marketing efforts. We focus on leveraging celebrity partnerships and entertainment avenues to connect with our audience in a meaningful way. Additionally, we emphasize product diversity and wellness-focused messaging to align with consumer preferences. By adopting these innovative strategies and learning from successful industries like alcohol, we aim to effectively navigate the digital marketing landscape, promoting our brand and reaching our target audience within the complex regulatory environment of the Canadian cannabis industry.

Compliance and Innovation in the Canadian Cannabis Industry

Balancing compliance with innovation is a critical aspect of the Canadian cannabis industry, especially given the stringent regulatory environment. Health Canada, responsible for oversight in this sector, conducted 662 inspection activities from April 2022 to March 2023, focusing on the highest risks to public health and safety. This involved onsite, offsite, and hybrid inspections of cannabis license holders, emphasizing a risk-based approach to ensure the safe and responsible use of cannabis​​.

Compliance Challenges

Health Canada issued 15 non-compliant inspection reports to license holders during this period. The issues observed included non-compliances related to licenses or permits, unauthorized activities, insufficient record-keeping, unsatisfactory packaging or labeling, and inadequate security measures. These challenges highlight the importance of strict adherence to regulations and best practices in the industry​​.

Enforcement Actions and Education

To address non-compliance, Health Canada may issue warning letters, seize and detain products, or suspend or revoke licenses. For example, two warning letters were issued, and one partial suspension and seizure occurred as a result of these inspections. Additionally, Health Canada increased its risk-based inspections of personal/designated production sites by 40% compared to the previous year, demonstrating its commitment to rigorous enforcement and safety​​​​.

Health Canada also focuses on educating registrants about the requirements of the Cannabis Act and Regulations. Compliance letters are sent to registrants to inform them of their responsibilities and the compliance tools available. This educational approach, along with a graduated enforcement strategy, is crucial in managing the risks associated with cannabis production and ensuring public health and safety​​.

High Flyer Media's Perspective

At High Flyer Media, we understand the importance of compliance in fostering a responsible and sustainable cannabis industry. We believe that innovation within the regulatory framework is not only possible but essential for growth and success. Our approach involves staying abreast of regulatory changes, investing in educating our team and partners about compliance requirements, and developing creative solutions that adhere to these regulations. By balancing compliance with innovation, we aim to drive the industry forward responsibly, ensuring safety and quality while embracing new opportunities for growth and development in the Canadian cannabis market.

Conclusion

As we conclude, it's evident that the Canadian cannabis industry, valued at $4.6 billion in 2022, is navigating a complex and evolving landscape​​. This journey involves balancing compliance with creative marketing strategies within a heavily regulated environment. The shift from traditional flower products to diverse offerings like edibles and infused products is reshaping consumer preferences and marketing approaches​​.

From High Flyer Media's perspective, success in this space requires a deep understanding of both the regulatory framework and the Canadian cannabis culture. We believe in leveraging digital platforms, innovative packaging, and education-based marketing to connect with consumers while adhering to regulatory guidelines. The future of cannabis advertising in Canada, much like the industry itself, is poised for growth and innovation. It demands a strategic blend of compliance, creativity, and consumer engagement to thrive within the confines of the law.

As we move forward, the key will be to stay informed and adaptable, continually seeking new ways to resonate with consumers and represent the dynamic nature of Canadian cannabis culture. The growth and evolution of the industry depend on our ability to navigate these challenges, turning them into opportunities for success and connection with the cannabis community.

Join the Conversation

As we've explored the intricate world of Canadian cannabis, a market projected to continue its growth trajectory, we invite you to delve deeper and become an active participant in this evolving narrative. Whether you're a part of the industry, a consumer, or simply curious about the cannabis culture in Canada, there's always more to discover and discuss.

At High Flyer Media, we're committed to fostering a community where ideas and experiences are shared, helping to navigate the complexities of cannabis advertising and regulations. We encourage you to explore more about Canadian cannabis, engage with our content, and share your insights. Your perspective is valuable in shaping the future of cannabis culture and its representation in the media.

Let's continue this journey together, learning, sharing, and growing in the vibrant world of Canadian cannabis.