As we have reported here and here, the Canadian government is getting set to legalize recreational cannabis through the introduction of the proposed Cannabis Act (Act) later this year.
In anticipation of legalization, industry players are starting to make plans for advertising. Not surprisingly given that one key objective of the Cannabis Act is to protect Canadians from enticements to use cannabis, the proposed Act contains prohibitions on promoting cannabis, many of which mirror prohibitions in the federal Tobacco Act.
What's prohibited
At a high level, the proposed Cannabis Act adopts the same approach to restricting promotion as the Tobacco Act, banning all promotion of cannabis and cannabis accessories except as specifically authorized under the Act. This means that, presumptively, any promotion is prohibited unless it is specifically permitted. Both statutes include essentially the same broad definition of "promotion" and both contain similar authorizations.
Both statutes also define specific (non-exclusive) types of promotion that are prohibited. For example, both statutes prohibit testimonials or depicting any person, character or animal, real or fictional, in advertising.
Both acts also prohibit promotion that could be appealing to young persons and what the Tobacco Act calls "lifestyle advertising," meaning presenting a product or its brand elements "in a manner that associates it or its brand element with, or evokes a positive or negative emotion about or image of, a way of life such as one that includes glamour, recreation, excitement, vitality, risk or daring."
These provisions have been interpreted in the context of the Tobacco Act, most notably by the Supreme Court of Canada in a 2007 judgment. Although it is reasonable to assume these interpretations will also apply to the prohibitions in the Cannabis Act, it will be open to cannabis producers to interpret them more liberally until Health Canada and/or the courts provide clarity.
The Supreme Court of Canada read down the prohibition against advertising that is "appealing to young persons," construing it as applying only to advertising that "could be particularly attractive and of interest to young persons, as distinguished from the general population" (emphasis added). Therefore, an advertisement is not prohibited merely because it is of general interest and, as such, appeals to young people in the same way as it appeals to older people. The prohibition targets advertising that is particularly attractive to, i.e. intended to be appealing to, young persons as opposed to the general population.
With regard to lifestyle advertising, the Supreme Court attempted to strike a balance between the prohibited advertising and "true information and brand-preference advertising," which is permitted. The court considered that the prohibition is intended to prevent the use of emotions and images that may induce people to start to use or increase their use of tobacco. According to the Supreme Court, "even advertising that does not appear on its face to connect a lifestyle with a tobacco product is prohibited if it subliminally connects a tobacco product with a lifestyle."
What's permitted
In terms of what's allowed, the Cannabis Act, like the Tobacco Act, authorizes only very limited promotion. The most significant authorization is for "informational promotion" and "brand-preference promotion," narrowly defined in the Act. However, even such promotion is allowed only in communications addressed and sent to adults identified by name, or in places where young persons are not permitted by law, or when communicated by means of a telecommunication where reasonable means have been taken to ensure it cannot be accessed by young persons. These rules may be further refined by future regulations.
The rules on promotion are complex and open to significant interpretation. We expect the innovative cannabis producers will likely test the boundaries on what is authorized promotion under the Cannabis Act, just as tobacco companies did in the past, and that Health Canada, and eventually our courts, will have to grapple with interpreting and applying these prohibitions. One could conceive of some producers aggressively promoting their products and thereby establishing effective brand awareness and public profiles, before the regulator steps in.
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