Balancing revenue and responsibility in the brand-new cannabis industry
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Hey there, time traveller!
This article was published 01/12/2018 (1464 days ago), so information in it may no longer be current.
When a brand-new industry is open for business, this is usually a marketer’s dream. In the case of cannabis, the opportunity includes a customer base that can now legally purchase pot in Canada for the first time since 1923. The legalization of cannabis was a major platform for the federal Liberal government during the 2015 campaign. Today, we’re going to look at the initial marketing — and advertising in particular — for the cannabis industry in Manitoba.
For context, we need to step back and assess the recent history of messaging about drug use, and also compare the changes over time to tobacco and cigarette advertising.
First, the major anti-drug campaigns in North America during the 1980s and ’90s included messages such as “Just say no” when referring to peer pressure on young adults to try drugs.
Graphic commercials featured an egg with the voice-over, “This is your brain.” And the next image was the egg being cracked into a frying pan, sizzling, while the voice-over stated, “And this is your brain on drugs.” Such imagery lasts for a long time.
Over the past 30 years, tobacco companies in Canada have slowly had their advertising eliminated because of the harmful health effects of cigarettes. The only messaging that is now permitted on the package is graphic images of the horrible effects of smoking. Retail stores must lock up cigarettes so they cannot be seen by the public. All these efforts were designed to delay exposure to cigarettes for our youth, and ideally stop them from smoking altogether.
Alcohol advertising cannot show people consuming the product. Ads typically show people having fun with the beverage of choice. Ads have also included fascinating characters such as the Dos Equis “most interesting man in the world,” animal characters and amazing imagery of the finest quality ingredients that are used.
None of these options are available for cannabis companies. The laws are quite clear about this. However, a cannabis company can only position its name via public advertising, albeit without showing or naming the actual product.
Over time and given the increasing number of alcohol-related traffic deaths, alcoholic beverage companies needed to demonstrate their social responsibility with messages of moderation. Some of the campaign messages encourage you to “drink responsibly,” “arrive alive” and “drive sober,” and “take a cab or call a friend.” These are good messages for the overall benefit of society.
The legalization of marijuana presents a different set of challenges and opportunities for advertising platforms and the cannabis companies. The unique twist to this comparison is that alcohol is a legal product, and cannabis had been illegal until Oct. 17. Suddenly, the market was able to tell consumers about the availability of legal cannabis when the switch was flicked.
Media channels now have a brand-new list of potential customers in the legal cannabis distributors and government agencies that control the distribution. Cannabis distributors and media channels cannot show people using, or appearing to hold, the product and they cannot have the ads where people under 18 can see them.
This scenario is classic product positioning as the various cannabis distributors are vying to be the name that is remembered when consumers want to buy their legal weed. There were at least two approved distributors that ran a teaser campaign prior to Oct. 17. This is when the company name is shown with an interesting message, but no actual product description is provided. The “reveal” occurred on launch day, and the companies hope that this approach helped keep their product in the consumer’s mind.
As a supplier in this new market, if you are not aggressively positioning yourself, you run the risk of falling behind in market share. Only time will tell which approach is the most effective.
Despite the positive revenue growth opportunity, there are also social responsibility questions that arise.
Minors will be exposed to the messages, although they cannot be targeted directly. Even the Liquor, Gaming and Cannabis Authority of Manitoba messaging says to “start slow,” among other factual points about use of cannabis.
Compared to alcohol, tobacco and even gaming messages, the government is in uncharted territory with how to best position legal consumption of the product. Because marijuana use was illegal, there is limited research into the long term effects of use, what constitutes safe consumption quantities and what the true long-term physical and emotional costs will be.
What should the message really be and how will it be relevant to society at large?
As a cannabis distributor, you also have a social responsibility. Companies position themselves as being stewards of good corporate governance, in a socially acceptable approach to their company’s operation. How will these cannabis companies be perceived in the near and long term if there are any product problems that result in serious illness or death?
Conversely, if there are no problems, investors will be clamouring to ride the gravy train for this new product. The public relations function appears to be a very important tool now and in the future.
Tim’s bits: Cannabis distributors that are not properly positioned might not realize their full economic potential. When things start bad for a company, they tend not to improve in a highly competitive market. And from the social responsibility perspective, are all cannabis distributors following the laws with a safe perspective or are they pushing the boundaries? Just because something is legal, it does not make it right. A marketer’s dilemma indeed.
Tim Kist is a certified management consultant who works with organizations to improve their overall performance by being truly customer-focused. He can be reached at firstname.lastname@example.org.
Tim is a certified management consultant with more than two decades of experience in various marketing and sales leadership positions.