The booming marijuana sector and the ever-growing hemp-derived CBD industry has attracted the attention of celebrities and athletes who are signing up to pitch for either of the brands. On Thursday, the hip-hop artist Drake whose full name is Aubrey Drake Graham, entered into a partnership with Canopy Growth, a Canadian pot company, to launch his own cannabis company, More Life Growth in his hometown, Toronto.
Drake has joined the wave of celebrities who are partnering with cannabis companies either by selling products, being brand ambassadors, joining their Board of Directors, or in his case, partnering with Canopy Growth on a joint venture business.
Some of the other celebrities who are in cannabis business include Gweneth Paltrow, Jay-Z, Martha Stewart, Montel Williams, Snoop Dogg, Tony Hawk, Willie Nelson, and Whoopi Goldberg. And the question on everyone’s mind is if we have gotten to the peak of celebrity cannabis?
Kantar is a business insight and brand consulting firm whose senior Vice President, Ryan McConnell, said that celebrity involvement in the marijuana businesses is yet to be fully saturated.
Marijuana is an emerging industry that is still regarded as illegal by some, and through celebrity endorsement and collaboration, the sector is gaining credibility and trust among the citizens.
Diana Eberlein, who is an entertainment marketing specialist, said that celebrity involvement is not a guarantee for brand growth because people are attracted to real and authentic brands.
Eberlein, who is now the head of marketing at SoRSE, further said that a brand would lose its audience faster if it does not feel authentic. SoRSE is a marijuana company that produces water-soluble cannabis oil. Mad Tasty is a company that develops hemp sparkling water. Ryan Tedder, One Republic singer, founded Mad Tasty. Tedder’s company worked with SoRSE in the production of water-soluble marijuana oil.
Eberlein said that although Drake is very popular, he is not readily associated with marijuana. However, he has a huge following, and the More Life Growth Company’s success will depend on his and his team’s marketing efforts.
His agreement with Canopy Growth is not very different from those of other celebrities as it will involve endorsements, investments, and offering advice on some issues. Drake is the majority shareholder of More Life Growth, said Cassel’s, the law firm representing the Canadian company.
The agreement between Drake and the company shows that 60% of the shares of More Life Growth belongs to Drake, while Canopy Growth retains 40%. This gives the company the ability to utilize certain intellectual property rights in Canada and across the globe.
According to Andrew Carter, an analyst working with brokerage and investment banking Stifel, brand development in Canada is under strict restriction against using celebrity names; Carter believes that Canopy is yielding to financial gain since the company has been in an operational and financial bind.
It remains to be seen what marijuana industry players like Youngevity International Inc. (NASDAQ: YGYI) and Green Growth Brands Inc. (CSE: GGB) (OTCQB: GGBXF) make of this technique of trying to break into new markets by partnering with celebrities.
CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of two informative articles each business day. Our concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. Articles are released each business day at 4:20 a.m. and 4:20 p.m. Eastern – our tribute to the time synonymous with cannabis culture. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.
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