To Market or Demarket? Public-Sector Branding of Cannabis in Canada

Abstract

Many governments provide goods and services that are deemed too sensitive for the private sector to deliver. This places public administrators in the difficult situation of having to sell products while also shaping consumer demand. Government agencies in Canada found themselves in this situation when the country legalized cannabis in 2018. Our findings suggest they responded with a demarketing approach, attempting to limit and shape, rather than increase, consumer demand. We conclude this demarketing strategy hinders public agencies’ ability to displace competitors in the illicit market, a key public policy objective.

Dimensions of competition in urban cannabis markets

“…If most cannabis users are unlikely to switch between the legal and illicit markets, legal market retailers would not consider illicit market sellers as important competition. If correct, any industry growth will have to come from new users or greater consumption by existing users, which makes provincial and federal decisions to pursue demarketing policies (Wesley & Murray, 2021) important. Saskatchewan uniquely does not run a provincially owned distribution monopoly.…”

Blowing in the Wind: Cannabis Legalization, Insiders, and Methodological Insights from British Columbia

“…Ensuring public safety by disrupting illicit markets may mean embracing market thinking, the opposite of approaches taken to date. Wesley & Murray (2021: 1080 note that in Canada a "demarketing approach toward cannabis sales," has been taken which suffers from a "…lack of attention to displacing the illicit market may have long-term ill effects on public safety." An example of the ever-shifting carceral continuum is how despite the absence of any solid evidence that cannabis-impaired driving would rise, fears of deadly crashes caused by legal cannabis permeated the narrative.…”

“…One respondent worried that governments had allowed cannabis to be sold at costs that tended to "…price themselves out of the marketplace." Numerous challenges remain related to branding, advertising, and the difficulty of embracing market thinking within an area of public health prioritization (Wesley & Murray, 2021). Re-negotiating this emphasis may require more engagement with people who use cannabis and other insiders.…”

“…The stigma around cannabis use will continue to diminish as more jurisdictions liberalize policy; however, it is likely that conceptions of stigma and stereotypes will persist and evolve for many years. Stigma will be prolonged by the tendency of governments to embrace public health goals that are rooted in a prohibition mindset and by limiting cannabis markets (Wesley & Murray, 2021). If this emphasis is too extreme, it may bolster illicit cannabis markets and relink cannabis and other more dangerous illegal drugs.…”

Public Branding and Marketing: Theoretical and Practical Developments

“…There are many other examples of branding being practiced across the public sector. Universities use branding to tout their strengths to potential students and donors (Fay and Zavattaro 2016); nongovernmental organizations build brand value to increase their salience with corporate sponsors (Becker‐Olsen and Hill 2006) and audiences (Johnson 2013); and government agencies use marketing to brand public sector products ranging from state lotteries to cannabis (Wesley and Murray 2021), as well as branding regions, cities, and towns as a tourism destination and economic investment hub (Eshuis, Braun, and Klijn 2013). Internally, negative images can influence how public servants behave and act, taking away their motivation if they are the cause of political pandering (Rho, Yun, and Lee 2015).…”