Drake attempts to circumvent health Canada's strict cannabis promotion rules
Popular Canadianrapper Drake is has decided to join the cannabis game through anexpertlycrafted deal that marketing experts say could successfullyevade strict advertising rules that govern cannabis promotion. Drake recently announced the launch of his new cannabis company More Life Growth Co., a joint venture with Canopy Growth Corp. in which he will own 60 percentwhile Canopy owns the remaining 40 percent. According to the report on Financial Post, part of the deal requires that More Life will become the beneficial owner of a cannabis production facility in the Toronto suburb of Scarborough, Ont., which is already being operated by Canopy.
“The structure of setting up the joint venture between Canopy and Drake’s new company is a very clever way around the general sponsorship prohibition because he’s not technically being paid by Canopy to promote cannabis,” said Chris Bolivar, vice-president of strategic growth at cannabis retail chain Fire & Flower.
Cannabis rules in Canada demand that any kind of endorsement that glamourizes cannabis or encourages it as a lifestyle is severely prohibited. As a result of this law, hundreds of different cannabis brands sit on the shelves in retail stores, and none of them are being advertised or promoted or even packaged in anything besides plain packaging.
However, the fact that Drake now owns a Cannabis producing company, may end up giving More Life Growth an upper hand over other cannabis brands, because even though Cannabis brands cannot make use of paid advertising, owners of companies can very well show off their brands on their personal webpages without fear of legal repercussions. This means that Drake can very well decide to promote More Life on Instagram.
“The issue around sponsorship by a celebrity is whether or not the celebrity is paid consideration for the endorsement of the product,” said Bolivar.
It is all veryclever, because according to Financial Post, Drake’s YouTube channel has over 13 billion views, and he has almost 53 million followers on Instagram. It’s reported that in less than one hour after Drake had posted about the launch of More Life onInstagram, the company's account had gained more than ten thousand followers.
“I’m not sure whether the association right now is stronger between More Life and Drake or between Canopy and Drake, but as this rolls out, this is going to continue creating publicity,” said David Soberman, a marketing professor at the Rotman School of Management. "It is very smart because it is certainly a run around the regulations. You're not supposed to use a person in the promotion of cannabis and that's exactly what this is if you think about it," he added.
It is apparent that Drake and his team have inarguably found a grey area to cannabis advertisement regulations and many believe this strategy would be successful.
“As a cannabis business person, I’ve seen these celebrity strategies work and not work. When it works best, it is with a celebrity that has true involvement with the cannabis plant and plays an active role in building the brand,” said Steve DeAngelo, chairman of California cannabis company, Harborside.