Last week, The Flowr Corporation (TSXV:FLWR) announced their partnership with Ace Hill, a millennial-focused beer and alcoholic drinks company, to market a line of pre-rolled cannabis products in Ontario and British Columbia. According to the Globe and Mail, this licensing agreement could be the spark of a new trend in the cannabis sector. Alcohol companies, such as Constellation Brands Inc. and Molson Coors Brewing Company, are looking to capitalize on the new and rapidly expanding cannabis market. However, conversations are also happening between smaller licensed producers looking to create a brand for themselves and craft brewers that would like a new revenue stream.
Licensed producers wishing to create a brand name for themselves have to navigate a highly restrictive marketing environment. Packaging needs to be plain and there are limited advertising opportunities. On top of this, marketing cannabis as a lifestyle brand is prohibited, which makes partnering with existing brands an appealing option, but partnering with alcohol companies is not simple. Under the regulations, if a company starts to brand their cannabis product line under their alcohol brand, then all of their products will be considered cannabis related and will be subjected to cannabis marketing restrictions.
To get around these restrictions, Ace Hill had to create a separate corporate entity, with a different name, logos and brand elements. By switching things around a little bit ensures that the products being sold are compliant with cannabis regulations, but are still recognizable to consumers of the alcohol brand. Flowr’s partnership with Ace Valley gives them a recognizable brand to sell their products under and it allows them to work with a team that has seen significant growth in the two years since they opened their doors.
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