Edibles to drive Canadian market ahead of new laws

Later this month Canada will make it
legal for merchants to sell and distribute cannabis drinks, edibles and

Regulatory laws in the country that
were once seen as a heavy barrier to entry into the flourishing cannabis market
are beginning to soften, allowing for further growth of the market.

While larger companies seem to be
dominating the production and sale of cannabis via dispensaries,
small-to-medium businesses will have their chance to shine by launching niche
products to specific customers.

Deloitte predicts that the
legalisation of more cannabis products will pave the way for a $2.7 billion
market in Canada, with edibles accounting for around $1.6 billion of the total

“You’d be shocked at the size of the
edibles industry,” said
Brandon Wright, CEO of Dynaleo, which develops and plans to manufacture edibles
at an Edmonton facility.

“Cannabis gummies are already being
purchased by the millions of units.”

Aside from the health benefits noted in a previous Leaf Desk report, edibles also serve as an ideal starting point with cannabis for those who are still curious and who may continue to be put off by the stigma that remains from Richard Nixon’s archaic war on drugs.

The new law enables sellers to keep up with consumer demand, as they shift away from dried cannabis flower and towards concentrates which are usually consumed via vaping or through being converted into oils and added to beverages and food.


Furthermore, cannabis edible products
usually boast more creative and delectable designs, making them easier to
market to a mass audience.

The smaller scale of the production
caters to consumers who would never usually consider the traditional ways of
consuming cannabis and may prefer the more homely, informal nature of
cannabis-based baked goods from a cosy setting.

Forsaking huge corporate greenhouses
in favour of small labs and family run farms enables smaller businesses to get
a foothold in the booming industry without having to undertake overly expensive
ventures as the big cannabis players have been doing.

The beverage industry is also dipping
into the green waters of THC-infused drinks in Canada, with breweries looking
to create new lines of product laced with cannabis to profit off the trend.

Embracing the theme of small, local
and artisanal business, Steve Thorp, co-founder and managing director at
Postmark Brewing - a company planning to make the most out of the new
legislation, stated: “People want small craft…local [products]. They want a story.
They want authenticity. They want uniqueness, and a lot of that comes from the
small-producer market.”

The new legislation is well suited for
business owners in Canada operating on a smaller scale, especially in British
Colombia where there is a strict limit of eight stores per ownership group,
making it harder for larger corporations to completely take hold of a
particular area.

The eight-store limit encourages
local, small-time ownership of all types of businesses while preventing the
market being dominated by established, large competitors.

Incorporating the huge potential-filled
market into the country could also ignite interest from the remaining alcohol
and tobacco industries, as many customers may switch to using cannabis in
favour of alcohol and tobacco and large companies will not want to miss out on
the market share, which will further fuel the thriving market.

Restaurant industry to take off

As cannabis edibles continue to keep
raising in popularity, the idea of cannabis-themed restaurants seem to be
taking the limelight.

The United States’ first cannabis
opened in Los Angeles last week,
leaving several restaurants wondering if the regulatory landscape is safe to
launch a food-only start-up with cannabis as a key ingredient.

Cannabis is still not permitted by the
FDA in the states, this means that the recently opened Lowell Farms cafe gets
around the rules by allowing customers to smoke weed or consume edibles from an
outside source while dining there, although the restaurant can’t cook cannabis
infused dishes themselves.

Currently it seems to be a difficult
environment to launch a restaurant, although the rise of lounges, similar to
coffee shops in Amsterdam, could well be the next route forward.

If cannabis could be utilised in a
lounge or sports bar setting where many typically consume alcohol, the new
style of establishment could be huge for the industry as it will incorporate
cannabis-based drinks similar to the brewery types where the consumers are
still socially drinking but instead of alcohol, it’s cannabis brews.

Across America in New York however,
the opposite has taken effect whereby The New York City Department of Health
recently issued warnings of hefty fines for restaurants that sell CBD and
cannabis products.

Despite the noted health benefits of
CBD, restaurants, bars and cafes have been warned against the trendy additive
as it has been deemed
“not approved as safe to eat” by the health department, putting a spanner in the
works for momentum in the world of cannabis dining.

Retailers expect revenue to soar

Even though pot stocks have suffered the worst months since 2017, Canadian retailers are optimistic on the upcoming year in light of the legalisation of cannabis edibles, which they have aptly named ‘Cannabis 2.0’.

With several reports of retailers
suffering from shortages of dried cannabis flower in the past, being able to
spread the product further by turning it into oil will enable projected sales
to boom once the legislation allows for the sale of edibles and concentrates.

Large investors have already been
observed to be taking advantage of the upcoming new edibles market with
numerous companies partnering with beverage businesses or privately working on
new ranges of edibles.

Corporations such as Canopy Growth are
onboard, with the CEO Mark Zekulin revealing
in a recent interview that the company is currently working on more than 50 new
products for the emerging edibles market.

With cannabis legalisation
encompassing a broader range of products in the near future, small cannabis
businesses will be experiencing increased growth and customers alike will be
welcoming hazy edibles later this month.

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