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Martha Stewart joins the cannabis industry as a brand ambassador for Canopy Growth’s (NYSE:CGC,TSX:WEED) lineup of products in the US market.
Canopy, in partnership with Sequential Brands Group (NASDAQ:SQBG), confirmed the new role for the celebrity businesswoman and television personality.
Stewart will aid in the development of Canopy’s new line of hemp derived cannabidiol (CBD) products in the US.
“I’m especially looking forward to our first collaboration together, which will offer sensible products for people’s beloved pets,” Stewart said.
Canopy announced it holds “several clinical trials underway” for the effectiveness of CBD and other cannabinoids to improve the health of humans and animals.
The Canadian firm indicated it will rely on Stewart’s knowledge of consumer products.
Shares of Canopy jumped in New York and Toronto, with the company raising in value 3.63 and 3.67 percent at the closing bell on Thursday.
The company finished with a price per share of US$47.41 and C$62.38 respectively.
In January, Canopy announced it would break through to the US market, thanks to the passing of a US$867-billion farm bill legalizing hemp and its derivatives including CBD.
The Canadian firm will invest between US$100 million and US$150 million for its new production plans in New York.
Stewart has raised her profile in the cannabis space thanks to a cooking television show, “Martha & Snoop’s Potluck Dinner Party” co-hosted with rapper Snoop Dogg, which also led to the sale of a cookbook.
“Martha is one of a kind and I am so excited to be able to work alongside this icon to sharpen our CBD product offerings across categories from human to animal,” Bruce Linton, Canopy chairman and co-CEO said in a press release.
Canopy did not offer specific terms of the partnership or payment or compensation specifics for the deal.
Canadian cannabis firm finds celebrity partnerships in the US
Through this partnership, Canopy is able to capitalize on a core difference between the US and Canadian cannabis markets.
Health Canada, the government agency tasked with regulated the marijuana industry in the country, has placed strong policies on the role celebrities can have with regards to the promotion of cannabis-based products and companies.
While Canada has legalized the drug for adult consumption first, its heavy restrictions on promotions and partnerships have left companies to scramble for brand awareness plans.
Now, Canopy has attached its name to Stewart and her business savviness thanks to its US strategy.
However, some celebrities have found ways into the Canadian cannabis investing space through business partnerships.
Newstrike Brands (TSXV:HIP,OTC Pink:NWKRF) signed Canadian rock band The Tragically Hip to a multi-year deal and Invictus MD (TSXV:GENE,OTCQX:IVITF) performed a similar manoeuvre by signing Gene Simmons to the role of “chief evangelist officer.”
In these cases, both marijuana firms changed their ticker symbols on the TSX Venture Exchange (TSXV) to “HIP” and “GENE” to reflect these partnerships.
Despite the partnerships, the cannabis companies are not allowed to sell products on the basis of these celebrity endorsements, while Canopy already touts Stewart’s brand awareness with consumer products.
As the Cannabis Act was enacted last October, several celebrity deals in place with cannabis companies were scrapped for the Canadian market as part of the heavy restrictions in place.
“If a name can, in and of itself, be a ‘depiction,’ then yes this will have an impact on branding. Any brand referencing a celebrity by name will be offside in that case,” Trina Fraser, a business lawyer at Brazeau Seller Law told Marijuana Business Daily.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
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