The prospering North American cannabis industry — and, notably, the booming hemp-derived CBD sector — has become a red-carpet-like affair with celebrities and athletes signing on to pitch some brand.
On Thursday, Aubrey Drake Graham, best known as hip-hop artist Drake, partnered with Canadian cannabis giant Canopy Growth to launch the More Life Growth Company cannabis maker in Graham’s hometown of Toronto.
Drake joins a surging wave of celebrities who have aligned themselves to the cannabis industry by selling products, joining corporate boards, or, for this situation, making a joint venture business.
With a list that as of now incorporates Jay-Z, Snoop Dogg, Willie Nelson, Montel Williams, Rob Gronkowski, Martha Stewart, Tony Hawk, Gweneth Paltrow, and Whoopi Goldberg, the inquiry becomes: Have we arrived at top celebrity cannabis?
“I don’t think they’ve reached full saturation yet,” said Ryan McConnell, senior vice president at Kantar Futures, business insight, and brand consulting firm.
Celebrity supports and associations are an approach to help loan validity and trust to business, he said. What’s more, for a rising — and to some degree illegal — industry, that can be enormous.
“[Cannabis] is a field that is not, in some people’s eyes, legitimate yet,” he said. “It still has that veneer of being illegal.”
Yet, not all big name tie-ups are made equivalent. Individuals are pulled in to brands that are real and authentic, said Diana Eberlein, an entertainment marketing specialist.
“If it feels inauthentic, they will lose that audience very quickly,” said Eberlein, who now heads up marketing efforts at SoRSE, a company that helps make cannabis oil water-soluble. SoRSE worked with Mad Tasty, a brand of hemp sparkling waters launched by OneRepublic lead singer Ryan Tedder.
Canopy Growth’s other celebrity partnerships have struck that chord well, she said. It seemed well and good that Snoop Dogg, actor Seth Rogen, and even Snoop’s pal Martha Stewart were wandering into the cannabis industry.
Drake, while massively well known, doesn’t earn that quick relationship with cannabis, she said.
“But Drake is such a big name,” she said. “So, it really depends on how he drives the brand moving forward.”
Drake’s arrangement with Canopy Growth stands separated from the greater part of the celebrity cannabis deals, which are for the most part supports, minority investments or advisory roles. Drake is the dominant part proprietor of an organization that has a license from Health Canada, which oversees the country’s regulated cannabis market.
Under the agreement, Drake will own 60% of More Life Growth Company while Canopy Growth will hold the other 40% and can “exclusively exploit certain intellectual property” in Canada and globally.
For Canopy Growth, which has gotten somewhat of an ideal example for the traded on an open market cannabis organizations in operational and financial flux, the deal disappointed at any rate one examiner who follows the organization.
“We take a relatively dim view of the venture’s Canadian prospects in justifying the implied value ceded by Canopy,” Andrew Carter, an analyst with brokerage and investment banking firm Stifel, said in a research note on Thursday. “Canadian cannabis brand development is difficult with restrictions specifically prohibiting utilizing celebrity names, and we believe Canopy is ceding a cash flow positive asset.”
When seeing the deal long-term, be that as it may, it could play out well for Canopy.
“But, we believe Canopy is creating another option to enhance its positioning for the US,” Carter wrote. “Canopy’s continued investment towards the larger global opportunity is a differentiating factor versus peers pursuing actions to ensure viability.”
Disclaimer: The views, suggestions, and opinions expressed here are the sole responsibility of the experts. No Newsline Hub journalist was involved in the writing and production of this article.