Brands Play an Important Role in Legalizing Marijuana

July 26, 2017 Facebook Twitter LinkedIn Google+ News

With Canada’s move to legalize, regulate and restrict access to medical marijuana for responsible adult use, Prime Minister Justin Trudeau’s lofty goals of choking off the illegal market won’t happen overnight.

Deloitte estimates the illicit cannabis trade in Canada totals $8 billion, as stated in a Huffington Post recent article. That’s a lot of money flowing to gangs and organized crime and simply changing the law won’t automatically take the money and power away from that black market.

Legal producers will likely be undercutting their illegal counterparts, while incurring the added costs of taxes and other regulatory costs.

The challenge here requires a sensible, and progressive regulatory framework that enables legal producers to eliminate black market producers through competition.

Low taxation, responsible branding and in-store marketing are the most powerful tools we have at our disposal to eliminate this black market. Professional legal producers must be allowed to explain to consumers why their products are superior to those offered by all competitors, including illegal ones.

Consumers need to know what they’re buying and feel safe and secure in obtaining from their source. With thousands of cannabis strains offering different effects, numerous ways to consume cannabis and the myriad agricultural processes used to grow the plant, packaging information is critical to give consumers a secure and informed choice.

Packaging and critical corporate branding will be a must to ensure no advantage is given to black market operators and other, less scrupulous producers able to offer low-quality products at low prices.

With no branding, informative branded packaging and/or information on their products to explain the advantages of their brand to their potential customers, the result would only push consumers to purchase larger quantities of low-quality product, which is the exact opposite desired result of the vision our public health professionals are advocating.

Plain packaging would also have the unintended effect of closing down the smaller growers, whom without branding, will not be able to differentiate their products from larger, well-financed competitors who can undercut them.

Furthermore, limiting THC potency and restricting product formats will give the black market a monopoly on products that a portion of the market desire. Legislation should provide reasonable product restrictions aimed to prevent overconsumption, such as requiring producers to sell defined quantities of marijuana in tamper-proof packaging. Overly strict prohibitions on already-popular products, however, will only serve embolden the black market and prevent the federal government from protecting Canadians.

The federal government would be wise to look at Colorado and Washington, where marijuana advertising is restricted, but branding and in-store promotion are still allowed. These jurisdictions understand that because cannabis is a complicated product, brands play an important role in helping adults make informed purchasing decisions.

This is a supremely difficult time for Canada as we approach cannabis legalization and regulation. If the desired result is to keep cannabis out of the hands of our young people, and over consumption then we must allow producers and distributors to brand their products in a responsible way.