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Toronto
Canada

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Nick Pateras | Cannabis

oN the business of CANNABIS

Earlier this year I cut the corporate umbilical cord and stepped into the nascent cannabis industry. Often asked about the market's current state of affairs, I penned this piece outlining what makes it such a fascinating business challenge. (Forewarning that I also squeezed in two call-outs for our team's work!)

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          Commonly cited as one of the world’s most forward-thinking countries, few examples better underscore Canada’s progressive character than its attitude towards cannabis. When it first established a medical cannabis program sixteen years ago, Canada was hailed as a leader. Now it again finds itself in the global spotlight as the Liberal government readies to be the first G20 nation to federally legalize recreational adult-use next July. To the incisive business mind, the emergence of these two distinct markets – medical and recreational – signifies a propitious opportunity, though not without unique challenges in either case.

          Consider medical first, and here it is perhaps best to provide some context: when a Supreme Court decision ruled that it was a constitutional right for Canadians to be able to access cannabis for medical purposes, a wholly new category was effectively birthed overnight. However, what Health Canada did not do in setting up the medical program was revoke cannabis’ status as a Schedule II narcotic under the Controlled Drugs and Substances Act. The licensed producers of medical cannabis are therefore tightly handcuffed in what they can say about their own products. Any marketing claims purporting to a product’s therapeutic benefits, such as if a particular strain is good for PTSD or epilepsy or nausea, are prohibited. Likewise, nothing can be mentioned about whether the potency of a product’s psychoactive properties dictate that it should only be consumed in the evenings. Producers can’t even display imagery of the cannabis itself, only the whitewashed packaging they are forced to use. This is all problematic as it places the onus squarely on the patient to conduct their own research and make consequential medical decisions in an information-restricted environment.

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          It’s at this early juncture of the patient journey that platforms like Lift can step forward, offering patients a method of sharing their experiences through quantitative and qualitative product reviews. Because the market is in its infancy and defaced by external conjecture, building trust through information is paramount to success. This extends to basic education: many new and prospective patients may not know that cannabis can be cultivated in such a way that it can have little to no cerebral effects. (Growers achieve this by minimizing THC levels, THC being the plant’s primary psychotropic compound.) Cynics will instinctively pivot to the health risks associated with smoking, but this objection can be pre-emptively addressed as well, as more producers commercialize cannabis in new formats such as oils, sprays and even pills that resemble a typical pharmaceutical.

          Doctors too can benefit from learning that, for example, nearly 70% of cannabis patients use cannabis as a substitute for previously prescribed medications. The most notable of these is opioids, compared to which cannabis has a dramatically lower addiction risk profile. Essentially, the more the industry invests in hosting thoughtful, evidence-backed conversations about cannabis’ medical usages, the wider people’s eyes will swell in enlightened surprise.

"The stoner archetype ... engenders a social climate of discomfort for the many cannabis-consuming lawyers, artists, academics and soccer mums."

          However, this is only one puzzle piece amongst a mountain-high pile. Another barrier to overcome – and this will be prevalent in the recreational market too – is obviously the stigma associated with decades of prohibition. Herein lies our greatest challenge as an industry: disassembling and replacing the stoner, pothead archetype that serves as cannabis’ unwanted poster child. Beyond the irony of how lazy the use of this caricature is, it engenders a social climate of discomfort for the many cannabis-consuming lawyers, artists, academics and soccer mums. These individuals, whether consuming for medical or recreational purposes, and by exemplifying both professional and personal success, boldly defy the unwelcome stereotype.

          It was on this insight that Lift launched its Faces of Cannabis campaign this summer, focused initially on the legal medical consumer. By holding space for patients to tell their stories in their own words, we were able to break down many banal misconceptions and contribute to the collective effort to redraw the boundaries of social norms. In a category whose primary growth inhibitor is lack of understanding, having patients as advocates offered a genuine, trustworthy showcase of the power of cannabis. For Lift, the campaign supported our mission of empowering informed cannabis decisions and amplified the oft-ignored voice of the patient.  

          All said, medical cannabis continues to grow astronomically despite the constrained regulatory environment – and as more clinical trials are funded in pursuit of proper medical indications, its increased disruption of the traditional healthcare sector is inevitable.

          Swapping a different slide under the microscope, the more rapacious industry investors are fixated on the recreational adult-use market. Some projections call for this to be eight or nine times larger than the medical market, though of course the proof to this claim is in the pudding, which currently sits decidedly uneaten.

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          In many ways, the Canadian recreational market will be even more advertising restrictive than medical, as the proposed legislation repurposes much of the nigh-censorious Tobacco Act. The key question for marketers then becomes what storytelling tactics can be used to build a brand when most forms of promotion are effectively forbidden. This concern also encompasses distribution, since major touchpoints across the traditional customer journey are now defunct. If we don’t solve how to communicate the benefits of a safe, regulated supply, we risk allowing the proliferation of the black market and therefore the plant’s continued demonization. The ultimate goal though, is clear – in the same way a drug like alcohol is normalized across much of the globe, the cannabis industry must strive to build a world where responsible cannabis consumption goes without judgment.

          What this all means for those interested in joining the industry is that the time is ripe. Canada is at the vanguard of both medical and recreational legalization, with several European and South American markets in hot pursuit. As the domino effect builds momentum and we gentrify what is now not unfairly labelled the Wild West, the next five to ten year period will be colossal. Indeed, it represents an exceptional opportunity to leave one’s fingerprints on a global industry that will shape healthcare, lifestyle and culture. Get excited – this may well be one of the defining phenomena of our time.

- NP, October 20 2017