Although this market is estimated to be worth over $2 billion annually, cannabis extract-based products including edibles will account for over $1.6 billion alone!
Deloitte surveyed Canadians and found that not only do Canadians already consume cannabis edibles and other alternative products, but many would consider buying them.
The reason being is edibles and other alternative products offer a more discreet and accessible way to consume cannabis and avoid any stigma surrounding smoking it.
With almost one in four Canadians consuming or likely to consume cannabis edibles and other alternative cannabis products, legalising these products should clearly create valuable new growth opportunities for Canada’s cannabis sector.
In fact, some major pot companies have already set their sights on the edible market.
For example, Canadian company, Aurora Cannabis announced that it would manufacture vapes and edibles at its Aurora Air and Aurora Polaris facilities. Also, the company has started making mints, gummies, and chocolates.
And, Canopy Growth will also make several cannabis-infused chocolates. In fact, the company bought a former Hershey chocolate factory to help make its products.
The market will be a “slow-burn at first” – but will gain momentum in the long-term
While it is a massive step for cannabis enthusiasts, companies and the whole industry, the Cannabis 2.0 market won't explode (like Cannabis 1.0 did back in 2018).
The reason being is no cannabis derivative products will hit the market, just yet.
Although the new regulations are now in effect, licensed cannabis producers must provide a 60-day notice to Health Canada, before actually marketing any new cannabis products.
This means, cannabis derivative products won't be available to consumers until mid-December.
And even after the new products are available for sale, it could be a while before we know how well the marijuana 2.0 launch was.
Also, the first quarterly reports from companies that will include Cannabis 2.0 sales won't come until February or March 2020.
However, over the long-term, this market could be a boon for cannabis companies and investors over the long-term and a recent report from the Deloitte agrees….
It said, the marijuana 2.0 market will be, “a slow burn at first, but as more products become available it will catch fire and gain momentum”.
See you next week.
Analyst, The South African Investor