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HIGHLIGHTS
  1. Martha Stewart will decide which Canopy products or initiatives to support on a case-by-case basis
  2. Celebrity relationships are “a risk as much as" an opportunity, Supreme Cannabis founder says
  3. In the United States, fewer restrictions means even more celebrity involvement in legal pot

Martha Stewart thinks legal marijuana is the latest good thing.

The 77-year-old food and design icon has accepted an advisory position with Canopy Growth, the Smiths Falls, Ont.-based cannabis grower announced Thursday morning. As the latest celebrity to join the cannabis industry, Ms. Stewart’s new relationship with Canada’s largest legal pot grower highlights the unique challenge cannabis companies face when securing high-profile endorsements that are banned in Canada but broadly allowed in the United States.

Martha Stewart speaks in New York City on February 05, 2019.

NOAM GALAI/Getty Images

“We are doing this out of the U.S. and that is just building out branding,” said Bruce Linton, Canopy’s co-CEO, “and if it happens to convey over to Canada that would be okay but not intentional.”

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Multiple celebrities already have relationships with legal cannabis producers. Newstrike and the Tragically Hip, Organigram and the Trailer Park Boys and Supreme Cannabis working with Cameron Thomaz (a.k.a. Wiz Khalifa) represent just a handful of examples, though Canadians can be forgiven for being unaware of them given strict cannabis marketing rules prohibiting celebrity endorsements.

Wiz Khalifa/Trailer Park Boys

Frazer Harrison/Getty Images, Netflix

Striking deals with famous people “is a risk as much as it is an opportunity,” said John Fowler, president and founder of Supreme Cannabis, which signed an “exclusive consulting services agreement” with Khalifa Kush Enterprises in late 2018. “We have to be very careful in how we manage that.”

That deal, which saw Supreme agree to annual royalties as well as an up-front payment of roughly $8-million in cash and stock, was not motivated by Wiz Khalifa’s celebrity status, Mr. Fowler said.

“The value of the transaction was not for Instagram posts or anything like that, [Wiz Khalifa] is not endorsing products,” said Mr. Fowler. “This was a deal where we had to ask ourselves, if we aren’t allowed to use that name in the product architecture in Canada, is this a transaction we would still do? And internally we said absolutely yes.”

While the trend of celebrities tying up with cannabis companies is accelerating, it remains fairly new. Even in jurisdictions with fewer marketing restrictions such as California, the level of interest among high-profile individuals still catches cannabis industry executives by surprise.

David Dancer, chief marketing officer for California-based retailer MedMen, said the company received an “overwhelming” response when their third-party agency, Mekanism, put out a call for directors interested in making a pro-cannabis commercial. MedMen ended up working with Academy Award winner Spike Jonze and Grey’s Anatomy star Jesse Williams on an ad, though Mr. Dancer said that was not the company’s original intent.

MedMen worked with Spike Jonze and Jesse Williams on an ad

Frazer Harrison/Getty Images, Dia Dipasupil/Getty Images

“We actually did not have an objective at that time to go after celebrity talent, or top-tier names,” he said, “it just kind of worked out that way.

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Two years ago, Mr. Dancer said it would have been difficult for a cannabis business just to get someone with household name recognition on the phone, but that now “my colleagues and I are constantly fielding conversations with… various celebrities [who want] to get involved in the cannabis space.”

The partnership Canopy announced Thursday has been in the works for “months, months and months,” Mr. Linton said, having been borne out of the company’s previous relationship with rapper and entrepreneur Calvin Broadus (a.k.a. Snoop Dogg) that dates back to February, 2016. The deal is structured such that Ms. Stewart can choose which Canopy products or initiatives to endorse or support on a case-by-case basis, beginning with a focus on CBD products, Mr. Linton explained, adding he was directly involved in bringing the household name in homemaking on board, but that the relationship got off to a somewhat awkward start.

Snoop Dogg speaks at a ceremony on November 27, 2018

MARIO ANZUONI/Reuters

“The first time I met her in New York, she had a bit of a hair trim at lunch and there was one or two trim pieces on her collar and about five minutes into the meeting I asked if it was okay to take a locket of her hair because it was sitting right there telling me to take it,” Mr. Linton said, “And she was like, ‘er, okey dokey’... [but now] we have a whole structure so that whatever she gets comfortable with over time and what regulations allow, she is comfortable with us so now we will figure out what she is comfortable with as an ingredient.”

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