OTTAWA Dec 16 Canadian marijuana firms, facing
potential limits on advertising for recreational pot, are
selling health food products and cultivating a lifestyle image
to win customers in an anticipated multibillion dollar market.
Canada is set to become the first G7 country to legalize
recreational marijuana nationally when it introduces legislation
next spring. Medical marijuana is already legal.
If the government incorporates an expert panel's
recommendations, outlined on Tuesday, it could strictly limit
advertising and require plain packaging on products.
That means companies will need to be creative to set
themselves apart from the competition, with the advantage going
to those who have already established a name, said Aaron Salz,
founder of Stoic Advisory Inc, a cannabis advisory firm.
"If you've been able to build a brand presence ahead of
potentially more restrictive rules on advertising, you're going
to have a leg up."
Alternatives could include sponsoring events or companies
putting their name on products other than cannabis, he said.
Medical marijuana producer Peace Naturals has a line of food
products, such as hemp hearts, sold in health food stores. It is
a strategy that owner Cronos Group, which is changing
its name from PharmaCan Capital Corp, might consider for its
other brands, said Chief Executive Officer Michael Gorenstein.
Gorenstein plans to use British Columbia-based In The Zone,
which is licensed for medical marijuana cultivation, to appeal
to the outdoor crowd when recreational use is legalized, with a
focus on hiring like-minded employees to connect with customers.
"If you build a culture and recruit a group of people that
really represent what your brand is, you don't need to
advertise," said Gorenstein. "The brand recognition will
Wholesaler Supreme Pharmaceuticals Inc is putting
its focus on the quality of marijuana it grows. The end product
is sold under other companies' names, but Supreme gets a
producer's mark and is betting on customers recognizing where
their marijuana came from and coming back for more.
"A good analogy would be Intel chips," said Chief Executive
John Fowler. "Whether you're buying an Apple or a Dell, you're
looking for Intel inside as a mark of quality."
Canopy Growth Corp, which operates Bedrocan and
Tweed, plans to use the potential plain packaging to educate
customers about the strength and strain of marijuana they are
buying, said Chief Executive Bruce Linton.
"We were not going to be using swirly, psychedelic colors,"
Linton said. "We're going to be using the chance to put the name
'Tweed' on the package."
Executives said education through events or customer service
will be key. It is a strategy Olivia Mannix, chief executive of
Colorado-based cannabis marketing agency Cannabrand, recommends.
"Be professional, that's really the best advice," said
Mannix. "Have education and information behind your brand."
(Reporting by Leah Schnurr; Editing by Lisa Shumaker)