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Hexo’s deal with Mike Tyson cannabis brand gets thumbs-down from Quebec, Alberta

2022-09-09
Canadian cannabis producer Hexo Corp.’s partnership with boxing legend Mike Tyson’s new company, Tyson 2.0, is off to a rocky start in Canada.

The provincial wholesalers for recreational marijuana in Quebec and Alberta say they won't sell the former boxer’s cannabis products in their respective provinces.

Canadian law bars cannabis promotions through endorsements or depictions of people – a fact that Alberta’s government-run wholesaler noted.

Without going into specifics, a spokesperson for Quebec’s monopoly wholesaler and retailer said the organization didn’t “want to be associated with this image.”

Tyson was convicted of rape in 1992 and sanctioned by the Nevada State Athletic Commission in 1997 for biting off part of Evander Holyfield’s ear during their World Boxing Association heavyweight championship bout.

Tyson’s company offers bitten-ear-shaped edibles.

Last week, struggling producer Hexo announced an exclusive partnership to produce Tyson 2.0 products in Canada, including flower, pre-rolls, edibles and vapes.

That partnership follows a more positive reception for Tyson 2.0 in the United States.

The company secured $9 million in funding in June and orchestrated a national product rollout with wrestler Ric Flair last month, Forbes reported.

Last December, multistate operator Columbia Care announced plans to partner with the former boxer to launch Tyson 2.0.

But in Canada, not all provinces are on board with Hexo’s new partnership.

Alberta’s monopoly cannabis wholesaler also threw cold water on the idea.

Some Media reached out to Tyson 2.0 for comment but did not hear back from the company by deadline.

Hexo is swimming against the current in bringing Tyson’s cannabis brand to Canada.

A number of celebrities either retreated from the Canadian market altogether or rebranded for various reasons.

For example:
Organigram rebranded its Trailer Park Buds products after Health Canada said the branding “appeared to set out a depiction of real or fictional persons through reference to the Trailer Park Boys characters and show,” the federal regulator noted.
Canopy Growth’s plan to bring Leafs By Snoop to Canada needed an overhaul to remove the reference to rap musician Snoop Dogg’s name.
Canopy ended arrangements last year with rapper Drake’s More Life Growth Co. and actor Seth Rogen’s Houseplant business.

Canada’s cannabis regulator, Health Canada, previously told Media that any celebrity affiliation with a marijuana product or brand, including promotions and marketing, has the potential to be noncompliant with federal law.

The decision by the wholesalers in Alberta and Quebec not to carry Hexo’s Tyson 2.0 products would be a blow to the company.

Gatineau, Quebec-based Hexo has lost nearly 1 billion Canadian dollars ($760,000) so far this financial year.

Regulatory filings show more than half the company’s sales came from Alberta and Quebec.

Last year, roughly 42% of Hexo’s net cannabis sales came from the SQDC, while 14% came from Alberta.

The Tyson 2.0 products are expected to launch across Canada this fall.

Some other provinces are taking a wait-and-see approach.

British Columbia’s Liquor Distribution Branch, which manages cannabis wholesale in that province, said it needs to review the specific product application before making a decision.

Cannabis NB, which manages wholesale orders in New Brunswick, said it “certainly wouldn’t carry a product that we felt violated the Federal Act; however we don’t know enough about the packaging or branding in Canada to speak to that.”

Asked why Hexo wants to be associated with Mike Tyson’s image, the spokesperson said the company “is committed to educating consumers and building awareness of the benefits of its products and how they can help manage pain, anxiety and stress.”

“We believe this partnership will help raise awareness of the medicinal value of cannabis and allows us to bring more products to the Canadian market that could help improve the overall mental, emotional, and physical wellbeing of our customers,” the Hexo representative continued.

Hexo said the brand will be compliant with federal rules but did not answer specific questions with regards to federal law.

“The products launched by HEXO in partnership with any cannabis company are and will continue to be compliant with the Cannabis Act and regulations,” the spokesperson said.

The company’s shares trade as HEXO on the Nasdaq and Toronto Stock Exchange.
 
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