April 17th marked exactly six months since Canada became the second country in the world to legalize recreational cannabis. In many ways it represents an important litmus test, with the rollout having far-reaching implications for how cannabis might be sold and marketed in other countries.

In a brand new category with national reach, it was a given that marketing would be crucial in creating consumer awareness and brand differentiation. But licensed producers (LPs) also knew the rules set out by Ottawa would be extraordinarily restrictive. Exactly how they would be permitted to build their brands was very much an open question.

The Message reached out to a number of cannabis marketers, consultants and legal experts to get their thoughts about the marketing and branding of legal cannabis after half a year. What has surprised them most? How are LPs adapting to Health Canada’s marketing restrictions, and which brands’ marketing has caught their attention.

As expected, cannabis marketing has been relatively subdued because of the strict regulations, although the first six months has produced some signposts for what we might see from the category.

There have been smart tactical executions, such as Up Cannabis’ clever out-of-home misdirect campaign that appeared like bank advertising, to Tweed’s collaboration with Mothers Against Drunk Driving and Uber that positioned it as a responsible brand right from the get-go.

There’s been a heavy emphasis on PR and earned media, with tactics that might violate the spirit of the Cannabis Act, yet still fall within what is permitted—such as B.C.-based Invictus-MD Partners’ association with KISS frontman Gene Simmons as its chief evangelist.

Some brands are on the hunt for legal loopholes, preferring to beg for forgiveness rather than ask for permission. The government has been pretty lenient to this point, but our experts predict Health Canada will become more aggressive in clamping down on violations.

In this first of a two-part look at cannabis in Canada at the six-month mark, our experts share their observations about how far the market has come, how much (or how little) the regulators are weighing in, and where we go from here.

Brand building: A work in progress

Rachel Colic, president and chief strategist of the strategic marketing firm YCreative Group, says some research shows that less than 11% of cannabis consumers can recognize or name the brands they have purchased from. She attributes that to packaging restrictions and a lack of “informed” cannabis marketing and education.

With consumers largely undecided on brand preferences, Colic says it’s still “anyone’s game” for the leading LPs. “Brands focused on developing deep meaningful relationships with their customers based on shared values will win,” says Colic. “They always do.”

Alison Hayman, an intellectual property lawyer at Toronto law firm Cassels Brock, says some LPs have taken a conservative approach to interpreting the promotional restrictions, while others have taken a narrower view of what is prohibited under the Cannabis Act to accommodate promotional activities.

“There remains uncertainty as to what constitutes ‘lifestyle’ advertising, which is not permitted,” she says. “This is a broad term and its limits have not yet been established.”

She predicts that Health Canada will become more aggressive in its enforcement of the Cannabis Act regulations going forward. “[Its] enforcement activities have been largely behind the scenes until now,” she says. “However, we may see more significant reprimands going forward now that the industry has had several months to adjust.”

Shawn King, creative director and host of the Turning a New Leaf podcast, says that LPs are still struggling to successfully navigate the Cannabis Act. “[They’re] getting better, but cracking the branding nut in this space is still proving to be a challenge for most,” he says.

The Cannabis Act: Lots of uncertainty

Many LPs are pursuing tactics that skirt the edges of the regulations, says King. That has led to unexpected scenarios and issues that the government is still trying to determine a solution for.

“I’m continually surprised by how many brands are running well outside the regulations, with little repercussion,” adds Colic. “While Health Canada has issued a number of warnings we haven’t heard of any significant fines as of yet.”

One big surprise has been Health Canada’s reluctance to disclose to LPs if what they’re doing complies with the Cannabis Act, only indicating the risk level associated with such activity, says King. “It’s a good reminder that we’re still dealing with a new industry and the rules are still being made up as we go.”

Amanda Wood, founding partner, creative of cannabis consultancy Sister Merci, agrees that much of the confusion stems from a lack of regulator clarity about how to interpret and enforce the rules, pointing to age-gating web content as just one example.

Health Canada favours a birth date entry over the simple “Yes I’m 19+” when it comes to accessing cannabis websites, even sending warning letters to companies that have used the latter. Yet, everyone knows that it’s easy to provide a fake birth date with zero restrictions.

“It is just as easy to pick an arbitrary year as it is to confirm you’re of legal age, so condemning one over the other seems a waste,” says Wood. “I know our own team members, when confronted with the birth date entry, routinely claim to be at least 110 years old.”

Zack Grossman, marketing director with the LP FIGR, says he was surprised by a letter Health Canada sent in March outlining a need for stronger online age verification. “This was somewhat unexpected because, at six months in, it appeared the standards for online age-gating had been set,” he says.

While the Cannabis Act requires brands to take “reasonable steps” to ensure those who are under-age can’t gain access to cannabis content, Grossman says those steps appear to have been interpreted differently across the industry.

Future strategies

Marco Ciarlariello, intellectual property lawyer at Cassels Brock, says that cannabis marketers are placing a greater emphasis on business-to-business marketing, noting that it is largely exempt from the “significant restrictions” placed on direct-to-consumer marketing.

FIGR’s Grossman, meanwhile, says that physical locations such as retail stores or booths at festivals will become a key consumer outreach channel, since brands know they are connecting with someone already interested in the product.

“By capturing their attention in that space, you can make the consumer journey shorter and more engaging,” he says.

“In my view cannabis isn’t special when it comes to marketing. It is a regulated CPG, albeit highly regulated compared to any other,” says Colic. “My team and I continue to rely on tried and true tactics that are Cannabis Act compliant like direct mail, data informed email marketing and segmentation, voice and geo-targeting.”

Sister Merci’s Wood says that creative specifically designed to attract media attention will give LPs a “huge advantage” in terms of reaching mass audiences. “We don’t mean traditional PR, we mean creating something of value worth media coverage,” she says.

Wood also predicts that highly shareable social media content will be a key tool for driving awareness and affinity. “Your social media game has to be on point and, again, create value that consumers or audiences deem worth sharing,” she says.

—With files from David Brown