The new Drake-Canopy partnership is a major pop culture endorsement for the cannabis industry…
We all expected Snoop Dogg to jump headfirst into the cannabis industry.
But now, more and more “suit and tie” celebrities are getting in on this rapidly growing multi-billion-dollar industry.
The latest artist to get into the cannabis game is Drake.
Known for many things, from his roots acting on teen drama Degrassi to his four Grammy Awards, Aubrey Drake Graham (“Drake”) is a force to be reckoned with in the 21st-century popular culture zeitgeist.
Although most will recognize Drake from his few dozen number one radio hits, including 2015 hip hop sensation, “Hotline Bling,” the 33-year-old Canadian already has a huge following and is looking to add business mogul to his resume.
So, it’s no wonder Mark Zekulin, CEO of Canopy Growth Corp. (NYSE: CGC), decided to partner with Drake to launch its new cannabis brand, More Life Growth Company, in Toronto – Drake’s well-known hometown that also happens to be Canopy’s home base.
According to a statement from Zekulin, the goal of this partnership is to “…bring best-in-class cannabis products to the world” by combining Drake’s experience in business, and not to mention, his name recognition, with Canopy’s vast cannabis knowledge.
What the Drake-Canopy Partnership Means for You
As part of the deal, Drake now owns a 60% share of More Life Growth Company. Structuring the partnership this way was a brilliant move by Canopy.
By making Drake a part-owner of the company, Canopy’s new brand, More Life Growth, can skirt by some of Canada’s cannabis advertising regulations that prohibit any advertising or endorsement that glamourizes the product or lifestyle.
The idea is that Drake, as an owner of the brand, can market his brand on social media without falling under the advertising regulation because he is not being paid by Canopy.
While this does enter More Life Growth into a legal gray area, Canopy could massively benefit from its association with Drake if Health Canada doesn’t try to interfere.
Drake’s Instagram account alone has 61.5 million followers, making him an extremely valuable influencer. His first More Life promo on the platform has already gained over 1.4 million views. So, we will have to wait and see how the legality of his More Life social media promotions shake out.
Just looking at the short-term effects of this partnership, we should mention that after the announcement was made on November 7, Canopy’s stock price had increased by 11.8% the next day. But whether this partnership will affect Canopy’s overall stock value in the long term remains to be seen.
We’ll have additional updates for you on Canopy after they release their earnings report tomorrow.
Celebrities Taking Over the Cannabis Industry
Drake isn’t the only celebrity looking to cash in on cannabis.
In 2017, Martha Stewart was the one making headlines when Canopy brought her on as an adviser. Stewart is expected to launch a line of CBD pet products, cosmetics, and food products with Canopy in the near future.
At this point, Stewart is a well-known acquaintance of cannabis enthusiast, Snoop Dogg, so maybe her partnership with Canopy isn’t as surprising as it once would’ve been.
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But the next wave of celebrity cannabis endorsers might be even more influential.
Athletes, in particular, seem to be drawn to the cannabis industry. So far, they have largely flocked toward CBD-based products and companies concentrated on the wellness aspect of cannabis.
Renowned Olympian Lolo Jones has partnered with cbdMD Inc. (NYSE: YCBD) to help promote their CBD-based products to other athletes as a way to manage pain and promote recovery without failing a drug test. Her endorsement opens up the possibility of cannabis products to an audience that would otherwise avoid these products altogether due to the stigma and potential career-ending ramifications.
And former Hall of Fame quarterback, Joe Montana, helped secure a major $75 million investment in California cannabis brand, Caliva, earlier this year.
It’s clear that celebrities are no longer just advocating for cannabis, but investing their hard-earned cash in the industry because they believe in the products that these companies are creating.
Are Celebrity Endorsements the Key to Cannabis Legalization?
The celebrity support shows cannabis is going mainstream.
But what do the politicians think?
Lawmakers in the U.S. have long been working to legalize cannabis on the federal level.
Alexandria Ocasio-Cortez (also known as “AOC”) voiced her support of cannabis legalization before the International Drug Policy Reform Conference last week in a video that went viral.
And leading Democratic presidential hopefuls like Bernie Sanders and Elizabeth Warren have made cannabis legalization a core part of their platforms.
Even Republican lawmakers have been warming up to cannabis legalization in recent years. Senate Majority Leader Mitch McConnell (R-KY) was one of the key supporters of the 2018 Farm Bill that removed hemp from the Controlled Substances Act entirely, paving the way for a CBD market boom.
As more and more mainstream celebrities, athletes, and politicians publicly associate themselves with the cannabis industry, we expect public opinion for legalization in the U.S. to skyrocket from its current stagnation at 66%.
This will bring big bucks to a market that is already the crown jewel of the global cannabis industry, which means more money for investors like you who are getting in on the ground floor.
P.S. Here at NICI, we called 2019 “the Year of CBD” early on. We knew that the sector was going to take off once the 2018 Farm Bill passed… and we haven’t been disappointed. In fact, the CBD market is on track to hit $22 billion in the next 12-36 months. And investors who get started in this sector today have an almost unprecedented shot at major profits. That’s why we’ve laid out everything you need to know about this market – and how to get started – right here.
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November 13 2019