On Tuesday (October 30) the Canadian Marketing Agency (CMA) issued guidance for marketing in the cannabis industry following confusion and a warning from the federal government earlier in the month.
Due to the implementation of the Cannabis Act on October 17, cannabis companies faced a nebulous time of regulation enforcement in terms of marketing and advertising in the country after the bill was passed in June.
The agency published a report titled CMA Guide on Permitted Cannabis Marketing Activities to help aid companies struggling with the restrictions from Health Canada.
“The guide reviews marketing practices that are permitted by new federal legislation, those that are prohibited, and those where caution should be exercised because the legislation is unclear,” CMA said in the announcement.
The agency confirmed this guideline will be updated as necessary to reflect new regulations.
Cannabis producers fail to comply following legalization
According to a report from BNN Bloomberg, Health Canada issued a warning notice to seven cannabis producers for falling outside the law promoting cannabis.
A spokesperson for the government agency said Health Canada had warned the companies of their activities and received confirmation the parties were targeting the error.
The government wouldn’t reveal which companies failed to comply with the regulations.
“In fairness to the [producers], there was no way to unpack the compliance of specific activities but to try them and see what happens,” Rebecca Brown, founder of Crowns Agency, told BNN Bloomberg.
While the timing matches with the warnings from Health Canada, it’s unclear whether the report from CMA was done in direct response to the errors from cannabis companies.
“A fair bit of confusion exists, not only for cannabis companies, but also for suppliers to the industry, from billboards and packaging to the sale of non-cannabis items such as promotional items,” Chris Bolivar, vice president of brand and marketing for cannabis retailer Fire and Flower, said.
In its report, CMA highlights one aspect which cannabis companies have thrived on: social media. Cannabis companies and personalities have raised their profiles through successful engagement through these platforms.
CMA explains there needs to be more clarification as to the rules when it comes to social media:
It is unclear whether the convention of a description on a social media page only requesting followers that are adults is a “reasonable step” to ensure the promotion cannot be accessed by a minor. If reasonable steps are taken, then Brand Elements, Informational Promotion and Brand Preference Promotion is allowable. If “reasonable steps” are not taken, then the promotion must be limited to a Brand Element and not associate with a way of life or young persons.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.