Wu-Tang Clan concert may be breaking sponsorship rules: Health Canada

Hazy rules around cannabis marketing, sponsorship and promotion have caused confusion, just weeks before recreational cannabis becomes legal coast-to-coast.

Confusion swirls around rules for cannabis companies sponsoring events

Wu-Tang Clan's Method Man performs in New Jersey in 2013. Wu-Tang Clan will be in Toronto Sunday night at the Rebel Nightclub. (Charles Sykes/The Associated Press)

It may seem like a good fit for a cannabis company to bring a 90s hip-hop band to Toronto, but a Wu-Tang Clan concert being held Sunday night may be breaking Health Canada sponsorship rules.

Promoters Never Jaded have a series of 19+ private events planned across the country that include concerts, fashion shows and movies. The tour, which brings the Wu-Tang Clan to the Rebel Nightclub in the Portlands, is completely free thanks to HEXO Corporation.

"It's really just about bringing together the explorer, the curious music lovers around arts, culture and music, to immerse themselves in these diverse cultural events and introduce them to HEXO," said Isabelle Robillard, the company's director of communications.

Members of the Wu-Tang Clan perform at the 2013 Coachella Valley Music and Arts Festival in Indio, Calif. They hit the Rebel Nightclub Sunday night in Toronto. (The Associated Press)

Quebec-based HEXO Corp. produces medical cannabis products under the Hydropothecary brand and recently announced a deal with Molson-Coors Canada to produce cannabis-infused beverages.

But Robillard says the Never Jaded events are not about promoting HEXO or Hydropothecary's products.

"No, basically the spotlight is really on the artists. We were working with that bunch of different artists, really exciting people across the country. And it's really focusing on the artist and the shared values that I mentioned and targeting that group of people in Canada that are explorers — the people that we identify with the company," said Robillard.

HEXO requires interested event-goers to register their names, email addresses and postal codes.

"We get to know them, they get to know us. They get to walk away with some free apparel, you know baseball hats, water bottles that kind of stuff, and they get to come in, come together with people like them from across the country," she said.

Isabelle Robillard, director of communications for Quebec-based HEXO Corp. The company produces medical cannabis products under the Hydropothecary brand and recently announced a deal with Molson-Coors Canada to produce cannabis-infused beverages. (LinkedIn)

HEXO isn't the first cannabis company to throw this type of promotional event.

Tweed is the recreational brand of Canopy Growth, a marijuana company based in Smiths Falls, Ont. It sponsored recent concerts by both classic rockers Jethro Tull and rap superstar Kendrick Lamar.
Alberta-based Aurora Cannabis held contests to see free shows by Kings of Leon, The Cult and Sam Roberts, among others, at venues across the country.

Pot purveyors are exploiting a once-in-a-lifetime chance to market their products before government restrictions fully kick in.

Once the Cannabis Act comes into force on Oct. 17, however, this type of promotion will be prohibited. The government is placing strict regulations on how cannabis can be advertised or marketed — just as it does with alcohol and tobacco products.

Health Canada concerned about promotional events

In a statement, Health Canada said it's concerned about  "some federally licensed producers of cannabis for medical purposes to sponsor events, such as music festivals, and engage in other promotional activities."

It said such kinds of corporate sponsorship and other promotional activities are prohibited by the Cannabis Act and "are contrary to the Government's goal to protect public health and public safety, including the goal of protecting young persons and others from inducements to use cannabis as set out in the purpose section of the Act. The actions of some companies have underscored the need for the prohibitions in the Act and their rigorous enforcement."

Professor David Soberman of the University of Toronto Rotman School of Management says the federal government has not communicated the rule around marketing and sponsorship of cannabis products very well, so the confusion is understandable. (Bill Arnold/CBC)

Health Canada said the advertising of cannabis is subject to several prohibitions in both the Narcotic Control Regulations (NCR), made under the Controlled Drugs and Substances Act and on conviction a producer's licence could be suspended and face a maximum fine of $5 million.

"We are working with Health Canada to be in compliance. We are in compliance," said Robillard of HEXO. And she said as recently as last month, company representatives went through the regulations with Health Canada officials to make sure they were being followed.

"The government of Canada has put in place regulations that we do follow and will continue to follow as we consider them a partner," Robillard said.

Confusion understandable, prof says

David Soberman, a Professor of Marketing at U of T's Rotman School of Management, says the confusion is understandable since the government has not been clear about the rules around marketing and promotion of cannabis products.

"Before the government starts allowing the marketing of these products, I'm assuming there's going to be some announcements," he said. "But we haven't heard anything. People don't know what exactly is happening, it's unclear."

The government's cannabis task force suggested something similar to the Tobacco Act which would prohibit all promotion of cannabis and cannabis accessories, including information about price, distribution and use of endorsements.

It also prohibits depictions of real or fictional people and characters, sponsorship and communicating in any way that "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"  which is referred to as "lifestyle advertising" in the Tobacco Act.

"There's not really been clarity on this issue, whether it's going to be more like alcohol, where you can sort of advertise to certain people of a certain demographic in certain places, or is it going to be more like tobacco were you can't advertise it all," said Soberman.

He also said it was unclear if the rules around marketing, promotion and packaging would be different from province to province.

About the Author

Philip Lee-Shanok

Senior Reporter, CBC Toronto

From small town Ontario to Washington D.C., Philip has covered stories big and small. An award-winning reporter with more than two decades of experience in Ontario and Alberta, he's now a Senior Reporter for CBC Toronto on television, radio and online. He is also a National Reporter for The World This Weekend on Radio One. Follow him on Twitter @CBCPLS.