As legalization draws ever closer in the Great White North, we have learned that advertising opportunities for licensed producers will be limited.
The guidelines provided in Bill C-45 recommend plain packaging and a cautious approach to branding when it comes to pot.
Because of these limitations, Licensed Producers (LPs) need to come up with creative ways to waive their flag for potential customers. Case in point, the recent announcement that Canada’s supergroup, The Tragically Hip, will be partners in Newstrike, one of Canada’s latest LPs.
Newstrike Ltd. is a licensed producer who joined HPI Holdings last February. HPI received the go-ahead to be a part of the cultivation club in December of 2016. The company is set to launch on the Toronto Stock Exchange today, and they preceded the announcement by declaring that The Hip are significant investors in the company.
“After much discussion and assessment on our part, we’ve decided that this company and the many creative people in it, are a perfect fit for The Hip,” the band said in a news release.
The Tragically Hip are so interwoven into the branding of this LP, that the stock exchange symbol for the company will be HIP.
“With their involvement and support, Newstrike firmly believes we are developing the brand that adult consumers who choose to use cannabis will turn to,” said the company’s executive chairman, Scott Kelly.
Although the inclusion of The Tragically Hip is clearly a marketing tool, Newstrike CEO Jay Wilgar was quick to point out that the coupling is a business partnership at its core, as the band has significant shares in the company.
The partnership details state that the group will receive 2.5 percent of gross revenues from products that contain their brand or likeness. The Hip also received 3 million shares in the company and an advance payment against future royalties of $1,000,000 CAD.
Endorsement deals with celebrities could easily be something seen more often as Canada legalizes marijuana. The amount of partnerships that will come to fruition will more than likely depend on how strict advertising regulations will be.
Bill C-45 is currently being debated in the House of Commons, and business marketing is likely to be a prominent topic of discussion.