The two partners initially made the news announcing a cannabis joint venture, in the form of new cannabis company, More Life Growth Co. Then the duo drew coverage a second time – when analysts took a closer look at the structure of this joint venture.
First, the details.
Drake will be the majority partner of More Life Growth, with a 60% interest. Canopy Growth will hold the other 40%. More Life also becomes the “beneficial owner” of a Canopy Growth cannabis production facility in Ontario.
The gist of this structure is that Drake becomes the effective owner of both More Life Growth and a Scarborough, Ontario cannabis production facility. And this is what has attracted additional media attention.
Why?
“The structure of setting up the joint venture between Canopy and Drake’s new company is a very clever way around the general sponsorship prohibition because he’s not technically being paid by Canopy to promote cannabis,” said Chris Bolivar, vice-president of strategic growth at cannabis retail chain Fire & Flower.
This leads to the government stupidity. It’s the “general sponsorship prohibition” with respect to cannabis advertising in Canada.
Canada has fully legalized cannabis for adult use, but it prohibits almost any form of advertising or marketing – for absolutely no reason.
Cannabis is non-toxic and non-addictive. Cannabinoids occur naturally in the human body. They are essential to human health. Mothers pass cannabinoids to infants in their breast milk, to promote infant health. No one has ever died from a cannabis overdose.
There is no medical or scientific justification for restricting cannabis advertising. Just the anti-cannabis paranoia of government.
Yet (in its infinite stupidity) the Canadian government hasn’t completely banned all forms of cannabis “promotion”. The owners of cannabis companies are allowed some latitude in promoting their own company and products.
Obviously, if it’s acceptable for some people/entities to promote legal cannabis products, then it must be legal for everyone to do so. The government cannot bestow rights to a particular group of people based upon their economic status (i.e. as owners of cannabis businesses).
The government cannot even claim that its bizarre and inconsistent restrictions on cannabis advertising are intended to “protect Canadian youth”.
- The anti-cannabis propaganda that cannabis “impairs adolescent development” has now been rebutted by real science.
- Legalizing cannabis actually causes the teenage use of cannabis to decline (due to less access to black market cannabis).
The federal government’s phobic, inconsistent rules on cannabis advertising will never stand up to court challenge.
Until that happens, Drake (and Canopy Growth) will be able to promote More Life Growth – using the music star's status and popularity to their advantage. Exactly what advertising is intended to do.
But almost no one else in Canada’s legal cannabis industry is able to do the same thing. It's one main reason why the cannabis black still controls 85% of sales, one year after full legalization in Canada.