The consumer packaged goods company, IGNITE International Brands, Ltd., is pulling up its Canadian cannabis stakes and is none too shy about why it feels the move is a good one: product marketing, sales and distribution restrictions.

“We applaud the Canadian government for leading the way in legalizing cannabis, but, unfortunately, there remain too many barriers to build a successful cannabis business,” IGNITE CEO Dan Bilzerian said in a statement.

The company was even forced to block Canadians from accessing its ignite.co website because of its involvement with cannabis, Bilzerian contends.

Even provincial governments that adopted a “conservative” approach to the branding behind cannabis legalization suggest it may not be as effective as it could be. “They all built brands that were competent and sincere, but not particularly exciting, or attractive in terms of getting people to consider buying the product,” say the authors of a new study out of Alberta.

Regulations under the federal Cannabis Act have strict rules around promotion with regard to cannabis, cannabis accessories and cannabis services that are likely to influence and shape attitudes, beliefs and behaviours.

Applying to those who produce, sell or distribute cannabis and related accessories and services, the rules also make it a no-no to promote in a manner that could be appealing to young persons, by means of a testimonial or endorsement and by presenting the brand or any of its elements so that the brand is associated with glamour, recreation, excitement, vitality, risk or daring.

“Many in the industry see the review (of the federal Cannabis Act) as a chance for the government to revisit the tobacco-inspired restrictions on cannabis advertising and promotion.” 

It’s certainly not the first time the stringent rules have come under fire.

“Many in the industry see the review (of the federal Cannabis Act ) as a chance for the government to revisit the tobacco-inspired restrictions on cannabis advertising and promotion,” Pierre Killeen , executive director of the Institute on Cannabis, wrote in a piece for The GrowthOp last year. The industry’s hope is that the review “will lead to industry-friendly licensing standards, an alcohol-like marketing regime, and a practical approach to the elimination of the illicit market.”

There’s also the difference between what Canada and other legal jurisdictions allow when it comes to promotion and marketing.

Compared to the U.S., “you definitely see a huge difference in the Canadian cannabis industry,” Lisa Campbell, founder and CEO of Mercari Agency, recently told Jay Baruchel, host of the newly available audio series, Highly Legal.

As it stands, Campbell’s advice is to work with the regulator. ”You can do really fun things within the legal framework if you’re just marketing to other businesses,” she explains. “It just gets really dicey when it comes to consumers.”

The strict requirements of the Cannabis Act were meant to accomplish three main goals, notes the federal government. The idea was to keep cannabis out of the hands of youth, keep profits out of the pockets of criminals and protect public health and safety by allowing adults access to legal cannabis.

At least some people in some provinces are not seeing as much progress they would like on all three fronts.

According to The Daily Courier , the Okanagan Cannabis Collective in B.C. is calling for the resignation of Mike Farnworth, the province’s public safety minister and Solicitor General. “We’re not seeing any real change here in the Okanagan. Weed is plentiful here. The black market is thriving,” Spiritleaf Vernon owner Sarah Ballantyne is quoted as saying.

The group wants the provincial government to eliminate a number of cannabis-related taxes and fees.

In the IGNITE statement, Bilzerian says “very few licensed producers in the cannabis industry are making money.” 

In the IGNITE statement, Bilzerian says “very few licensed producers in the cannabis industry are making money.”

A look at some recent financial results shows that Tilray recently reported that net revenue was up 43 per cent to $168 million during its first quarter of 2021, but it still saw a net loss of $34.6 million. Canopy Growth, for its part, generated net revenues of $136 million for its first fiscal quarter, but lost $64 million on an adjusted basis and shed some market share.

IGNITE’s decision to pull out of cannabis in Canada may not be permanent, although it does have some tough asks.

“Whenever the government decides to remove and/or reduce the restrictions in marketing, sales and distribution and allow the business community to properly serve the consumers, IGNITE will consider returning to the market,” Bilzerian suggests.

But leaving cannabis doesn’t mean an overall company exit from Canada. “By discontinuing our cannabis operations in Canada, IGNITE will be in a much better position to introduce and promote its vodka, tequila, seltzers, energy drinks, vapes and apparel products to the Canadian market,” he adds.