Posted by Div on August 15, 2018
With the federal legalization of recreational marijuana just around the corner, several Canadian provinces are scrambling to develop plans to sell cannabis to consumers safely and responsibly. Although marijuana will be federally legal to consume and grow, it has been left up to each individual province to decide how they want to regulate sales. For example, although the government will have a hand in distribution across the country, retail sales of the drug will be privatized in Alberta, Saskatchewan, Manitoba, and Newfoundland. While a hybrid public-private system will be adopted in British Columbia, and up until a few weeks ago, a public system would have been adopted in Ontario.
Since the recent and controversial political shake up in Ontario, the Ford government has vowed to privatize the province’s sale of marijuana. This is historic for Ontarians as it will not only produce thousands of new business opportunities for “budding” entrepreneurs, but it will also allow for innovation and price competition between both vendors and retailers. This model is very similar to Colorado’s plan to sell and regulate recreational marijuana– a plan that has earned over $100 million USD in tax revenue in its first year. Colorado’s plan was so successful that it is now being used to generate money for the “Marijuana Tax Cash Fund”, to support the homeless, aid mental health programs in state prisons, and give back to public school health programs.
Apart from generating much needed tax dollars, reducing mass incarceration, and alleviating stress on law enforcement, the privatization of marijuana means that there are new fortunes to be made in Ontario, and entrepreneurs are already starting to plot and scheme. The problem, however, is that marketing a once-illicit drug will inevitably be controlled by many government-set barriers. Part of the federal government’s plan to legalize marijuana included regulations governing the way the product can be marketed. The reason for this is simple, the legalization of marijuana was a tactical move to reduce the number of criminal dealers, rather than to encourage more use of the substance.
The advertisement of marijuana is illegal in Canada- and although the rules have not yet been completely set in stone, the marketing of recreational marijuana is expected to be similarly regulated. The government of Canada has proposed regulations similar to those imposed on tobacco sales in the country. Cannabis packaging will have to be simple, with just the logo and a health warning on the package. The bill that will legalize marijuana in Canada is called bill C-45. The bill is not entirely finished yet, but in its present state, it will prevent any form of presentation that associates cannabis with recreation, risk, vitality, glamour, or courage. One proposal even suggested keeping marijuana branding off “swag” such as t-shirts, and even removing dispensaries from online maps.
To make matters worse for marketers, several social media platforms already have systems in place to monitor the marketing of marijuana products on their sites. Platforms such as YouTube and Facebook will block ads and content related to marijuana, as well as demonetize such videos. Ultimately marketers will be unable to run digital ads in the marijuana space due to these filters. One way to get around this is through the booming influencer sector. Social media influencers have hundreds of thousands of followers to whom they can show cannabis products. This is an extremely successful strategy for a number of other verticals, so why not cannabis?
Larger businesses looking to make a major mark in the industry are looking to more modern, innovative ways of getting around these regulations. Royal Canadian Cannabis is a marijuana producer in the prairies that is currently in the early stages of being approved for a license. In order to stand out, they are looking to use augmented reality to spruce up their packages a little bit. Customers will eventually be able to use AR to view marketing and creative packaging on their cannabis products. Furthermore, regulations around the design of dispensaries can be countered by AR technology that helps the customer visualize the product with a 3D graphic and retrieve more information about each strain.
Despite these limitations to market, the cannabis industry is expected to see colossal growth over the next year. Since the plan to legalize cannabis was announced, over 20 public marijuana producers have emerged in the Canadian market and have a combined value of over $23 billion. Analysts at CIBC predict that the marijuana industry in Canada will be worth more than the market for hard liquor in just 2 years, a whopping retail value of $6.8 billion.
As the market for legal cannabis just begins to open its gates, hundreds of entrepreneurs are flocking to get their piece of the pie. In such a controversial and highly regulated industry, knowledge and experience are king.
Contact BTI Brand Innovations today for an ironclad strategy to take your cannabis business to market.