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Will Canada 2.0 Help Stop The Cannabis Rot?

recreational canada
Written by Peter McCusker

Canadian companies are hoping the launch of the second wave of legal cannabis products will boost ailing revenues and halt a severe slide in share prices.

It’s one year since recreational cannabis was legalized in Canada and the anniversary has been marked by introduction of a new range of cannabis products including; edibles, drinks and vapes.

It will be a while before any go on sale – early December is predicted as they have to be individually approved by Health Canada. And a report from Deloitte estimates the market could be worth almost $3 billion a year, reports Health Europa.

13 New Cannabis Drinks

At the forefront of the drinks market is Canopy Growth which has the backing of U’S drinks giant Constellation following a $4 billion investment in 2018. A report in BNN Bloomberg says it has developed 13 beverages that contain contains what it calls ‘distilled cannabis’. 

Health Canada regulations set the THC limit for cannabis drinks at 10 mg per package, and Canopy says it is targeting a different audience to the United States, where cannabis beverages (and many other products) can come with THC dosages of 100mg.

Canopy says its low-dosage drinks are meant to appeal to consumers who might never ‘got high before ‘and want to try a a cannabis drink comparable  with their usual alcohol tipple of choice .

“One RTD (ready-to-drink cannabis beverage) is like having one beer,” said Canopy Growth CEO Mark Zekulin.

Shortage Of Shops

BNN Bloomberg refers to a survey which finds 60% of cannabis consumers were interested in trying cannabis beverages, 80% of cannabis novices — someone who may ‘never have been high in their entire life’— were also interested.

On the strength of these potential new market opportunities Reuters reports industry hopes they will boost sales. But Reuters also highlight a lack of retail outlets as being a potential drag on earnings.

With cannabis stocks down on average by around 50% in the last six months Reuters reports a ‘crucial factor for a turnaround is a significant increase in the number of stores selling the products’.

Cannabis producers, investors and analysts have blamed Canadian regulations on the slow opening of new retail outlets. Investment bank and advisory firm Seaport Global says Canada needs about 1,055 stores to realize the cannabis market’s true potential. About half that number currently exist, with about 300 of those stores in Alberta. 

Seaport analyst Brett Hundley, says the slow roll-out of stores ‘creates a real problem for Canadian licensed producers, because they’ve expanded rapidly with cultivation and production facilities and have nowhere to go’, reports Reuters.

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About the author

Peter McCusker

Peter McCusker is an experienced news and business editor, who believes it’s time to fully embrace the multiple, proven, medical benefits of the cannabis plant.