Legal Pot In Canada Could Offer Promo Opportunities

The Great White North is poised to go green. Canada expects to legalize recreational marijuana by the summer of 2018 – a first among G7 nations. The move could create an estimated C$20-billion-per-year industry, and potentially spell opportunity for promotional product companies.

During the week of April 10th, Canadian Prime Minister Justin Trudeau will officially announce legislation that will legalize marijuana by July 1, 2018 – Canada’s national birthday. Enjoying widespread support among Canadians and on both sides of the political aisle, the legislation is likely to breeze through parliament, making it legal for anyone 18 and older to purchase pot for pleasurable consumption.

Under the law, Canadians will also be able to cultivate up to four marijuana plants in their homes. Provincial governments will have the responsibility of controlling how marijuana is sold within their locales, and could also raise the minimum age above 18, if desired.

The decision to proceed with legalization is rooted in the recommendation of a federal task force that was led by former Toronto Police Chief Bill Blair and former Justice Minister Anne McLellan. Legalization and regulation are seen as the most effective tools for keeping pot out of the hands of minors – and for pulling the rug out from under a dodgy black market run by criminal enterprises that have used trafficked children in their cultivation operations.

Speaking to the media earlier this month, Trudeau said that he would use some of the cash the government collects from the pot industry to help people with drug problems. He also emphasized that legalization is a powerful means to reduce underage consumption of cannabis, noting that alcohol laws show proper regulations can work. “It’s easier for a teenager to buy a joint right now than a bottle of beer, and that’s not right,” he said. “We know by controlling and regulating it, we are going to make it more difficult for young people to access marijuana.”

In its 2016 mid-April issue, Advantages reported that 2015 promo product sales in Colorado grew by 10% – a faster rate than any other state in the country, driven by a booming legalized marijuana industry there. Even somewhat similar gains in Canada could provide a significant boost to the market. So far, a number of Canadian distributors feel a mix of caution and optimism about the prospects the legal cannabis industry presents.

Mark Freed, president and CEO of Ontario-based Genumark (asi/204588), told Counselor it will be paramount for distributors to first establish that potential clients in the niche are in compliance with all Canadian laws and regulations. “Assuming that is the case,” Freed continued, “we would expect that promotional products will be an integral and economical component of their marketing plan, just as we would anticipate for any other burgeoning industry. The (distributors) who will capitalize are those who provide the most creative and cost-effective solutions to their clients.”

Pete Thuss, marketing partner at London, ON-based Talbot (asi/341500), told Counselor that there will probably be potential for sales of certain items, such as lighters, within the new niche. Still, just how big a role branded merchandise will play in the cannabis trade could be contingent on regulators, Thuss believes. “I think once we see exactly how the government will legislate marijuana and the promotion of it, then that will dictate how we can approach it as an industry,” said Thuss. “There will likely be some opportunity there.”

Depending on how promotional regulation plays out, it’s possible to imagine a number of applications for promotional products in the pot sector. T-shirts, pens, polos, mugs, tumblers, toques, outerwear, caps, hooded sweatshirts and messenger bags are just some of the items cannabis companies could invest in for everything from employee wear to welcome packages to holiday/anniversary gifts for workers. Marijuana businesses could also tap into totes, lanyards and various giveaways (think logoed hacky sacks and fun-colored ear buds) for trade shows. If ultimately allowed, cannabis brands could sell retail apparel to customers, and could also dispense product in logoed bags/packaging.

Even if all those possibilities turn into realities, certain distributors might still eschew pursuing the pot niche. Some could avoid it for fear of offending other tried-and-true clients that take an unfavorable view of marijuana and its legality. Others might turn away from cannabis companies based on personal conviction. “I would suggest,” said Thuss, “that some distributors and manufacturers may or may not decide to sell into this market, as not all agree with legalization.”