Canada’s new Cannabis Act[1] (the “Act”) will provide legal access to cannabis to adults across Canada. The main objective of the Act is to regulate adult-use cannabis “to protect public health and public safety”, especially the health of young persons.[2] These policy objectives are apparent in the rules around packaging and labeling[3] and display of cannabis and cannabis accessories.[4] Although these provisions arguably contribute to the government’s policy objectives, they significantly limit industry’s ability to brand their cannabis products and accessories, including in choosing brand names, trademarks and/or logos.

The Act prohibits the selling of cannabis or cannabis accessories in a package or label: (a) that could be appealing to young persons; (b) that sets out a testimonial or endorsement; (c) that depicts a person, character or animal; (d) that associates cannabis or one of its brand elements to a way of life especially one that includes “glamour, recreation, excitement, vitality, risk or daring”; or (e) that contains false, misleading or deceptive information.[5] Additionally, the Act allows the Governor in Council to make several regulations to enable the enforcement of the Act, including regulations “specifying terms, expressions, logos, symbols or illustrations” which shall be forbidden on cannabis or cannabis accessory packaging and labeling.

Following consultations by Health Canada on regulatory proposals[6], the Cannabis Regulations[7] (the “Regulations”) have now been enacted and include details around requirements for the packaging and labeling of cannabis products and accessories. During the consultations, it was debated whether “plain packaging” should be applied strictly, by prohibiting the display of any branding or logos altogether. Luckily for future cannabis brand owners, this extreme approach to “plain packaging” was not adopted mostly because it was argued that “the ability for the legal industry to brand their products was necessary to allow them to differentiate their products from their competitors, including illegal producers operating outside of the legal framework”.[8] The Regulations therefore allow cannabis producers to display one “brand element”[9] on their packaging in addition to the brand name, subject to a considerable number of restrictions.

The significant restrictions on packaging and labeling set out in the Regulations will make it challenging for industry to create distinguishable brands. Only certain elements, in a certain size, font and colors can appear on the packaging, including uniform color; matte finish and smooth texture; and no hidden feature, scent, sound, cut-out window, special covering.[10] This will make it hard for brands to stand out on the shelves.  As a result, brand owners in the cannabis industry will have to be very innovative if they wish to create strong brand identity. The brands chosen by the producers will have to be particularly distinctive and well enforced over time in order for them to acquire any significant value.

Interestingly enough, “plain packaging” is now also a vivid topic in the Canadian tobacco industry. Health Canada launched consultations in June 2018 on a proposed Tobacco Products Regulations (Plain and Standard Appearance)[11] which proposes to “standardize the appearance of tobacco product packages, as well as the appearance of the tobacco products themselves”.[12] The proposed regulations seem to be even stricter than the Cannabis Regulations when it comes to the limitations with respect to brand colors, logos and images. It will therefore be very interesting to see how tobacco brand owners will be forced to change their branding strategy in the event that these regulations are adopted.

[1] 2017, SO 2017, c 26, Sch 1.

[2] Act, s. 7.

[3] Act, ss. 25-28

[4] Act, ss. 29-30

[5] Act, ss. 26-27

[6] https://www.canada.ca/content/dam/hc-sc/documents/programs/consultation-proposed-approach-regulation-cannabis/proposed-approach-regulation-cannabis.pdf

[7] SOR/2018-144 : http://www.gazette.gc.ca/rp-pr/p2/2018/2018-07-11/html/sor-dors144-eng.html

[8] https://www.canada.ca/en/health-canada/services/publications/drugs-health-products/summary-comments-public-consultation-regulation-cannabis.html#b1.2 at s. 6.2.

[9] Act, s. 2(1)

[10] Regulations, ss. 111-121.

[11] http://gazette.gc.ca/rp-pr/p1/2018/2018-06-23/html/reg9-eng.html

[12] http://gazette.gc.ca/rp-pr/p1/2018/2018-06-23/html/reg9-eng.html