Article by Joseph Hall, Toronto Star via Our Windsor
And the battle begins in earnest.
With the introduction of edible, beverage, vape and other new products over the coming months, the country’s legal pot industry will finally bring both passive fists to the fight with its shadowy, illicit counterpart, experts say.
And the range of confections, booze alternatives and vaping products that will increasingly pack the shelves of pot stores — with the first wave expected to hit in January — is likely to attract vast numbers of new users to the pleasures and pitfalls of cannabis.
“Cannabis 2.0 marks an important milestone for the sector,” said Canopy Growth president Rade Kovacevic, as he introduced his company’s line of products at a swish Toronto ceremony late last month. “It’s the first time that the legal industry has had the fulsome opportunity to compete with the black market.”
Alanna Sokic, a cannabis watcher with the Toronto consulting firm Global Public Affairs, says the new market will be essential in any attempt to tame the illegal trade.
“However, it is important to note that price will still serve as a key barrier to purchase. Illicit market products remain a much cheaper alternative for the cost-conscious consumer.”
The new sector — known generally as the edibles market and dubbed Cannabis 2.0 — became legal Oct. 17, exactly one year after its combustible counterparts. The country’s licensed producers then had to submit their intended offerings to Health Canada for review and approval, a process expected to take between two to three months per item.
These new legal lines include true edibles like candies, chocolates and brownies as well as beverages, vaping juices and devices, capsules, topical lotions and concentrates such as hash and resins.
While a limited array of products will appear in stores and online this month, the true rollout is not expected to begin until late winter and into spring.
However substantial that first wave proves to be, it will surely pale in comparison to the cornucopia of edible cannabis products available in U.S. states that have legalized pot. The industry here has opted for the “start low and go slow” strategy for its edibles introduction — the same path experts have cautioned new cannabis users to follow when trying their first pot products.
Mateo Olaru, CEO of the cannabis resource and information company Lift & Co., says it could be a decade or more before Canadians have access to the same array of edibles as consumers in the U.S. — where everything from cannabis-laced candy floss to breath strips can be bought.
Producers here, Olaru and other experts say, have opted to concentrate initial sales on a small array of products that have proven popular in other legalized jurisdictions.
“The industry itself and the suppliers have learned (from the first year) that you can’t just put forth a whole whack of products,” says Sokic. “The suppliers are going into 2.0 with a much more strategic mindset.”
Although industry officials predict a far smoother rollout than last year’s halting combustibles introduction, some sector watchers say the limited product variety will also be due to a fear of distribution glitches.
“As we saw with the 1.0 products — the flowers and the oils — the influx of such a large number of products into supply chains that are still working out kinks will be a challenge,” Sokic says. “We have this whole mass of beverages, chocolates, vapes coming onto the market and I think it’s going to take some time before the supply chain gets its rhythm.”
Cannabis 2.0 rhythm will eventually be worth $2.7 billion a year in Canada, according to a report last year by Deloitte Canada.
Pot-infused edibles like chocolates, gelatins, candies and brownies would account for some $1.6 billion of that total, with cannabis-laden beverages taking in $529 million; tropical rubs, $174 million; tinctures, $116 million; and capsules, some $114 million.
Newly available cannabis concentrates like hash and resins are expected to take in some $140 million a year, the Deloitte report said.
Vaping liquids and devices, also part of the Cannabis 2.0 lineup, are expected to grab between 25 and 30 per cent of the country’s legal cannabis market, which some have said could grow to some $9 billion a year by the mid-2020s. This large, if initially conservative market, producers and retailers hope, will cater significantly to new or infrequent cannabis users who have been turned off by the stench and stigma of smoking or are wary of breaking the law.
Cameron Brown, an executive with Toronto’s Hunny Pot Cannabis Co. pot shop, says this influx of new users will help build the market and sustain the growing number of stores slated for Ontario, which has just 24 provincewide.
“It’s huge — a lot of people don’t want to consume by smoking a product,” says Brown, communications director with the city’s first legal shop.
And while many producers have complained about the onerous regulations the new laws impose — especially around packaging and promotion — the quality control and regulation of intoxicant levels that Health Canada has laid out are an enticement for new users who may have heard “horror stories” about bad experiences, Brown says.
None of this means there won’t be an impressive array of products in the growing number of pot stores Queen’s Park has promised will open across Ontario next year, Sokic says.
For Canopy Growth, based in Smiths Falls, Ont., that first batch of offerings will be split into three groups: chocolates, beverages and vapes.
The chocolate line, which will include three varieties, is a natural for a company whose main plant was formerly a Hershey Canada factory.
“We’ve created a lineup of chocolates based on our ‘bean to bar’ ” chocolate strategy, Kovacevic said in a Steve Jobs-like launch event at the downtown Toronto Design Exchange.
He said the company was “taking every step from selecting the beans ourselves, roasting them in our Smiths Falls productions facility and ensuring we own the quality from start to finish.”
One of the lines — the Bean & Bud chocolate medallions — will be 70 per cent cocoa, contain five milligrams of the intoxicating cannabis component THC each, and will be sold in packages of two.
That combined 10 per cent THC level is the maximum limit under federal laws for any single edible or beverage product or package of products sold in Canada.
The cap — much lower than those found in many U.S. and black-market products — was set by Health Canada to limit the overdose freakouts common among neophytes. It also helps reduce the risks to children and animals who might consume carelessly stored cannabis chocolates or candies.
Prices for the Canopy chocolates will start at $7.99 a bar.
The company also introduced a beverage line that includes 355-ml mixed drinks boasting two milligrams of THC each. With distilled versions of some of its largest-selling pot brand mixed with ginger ale, tonic and soda, the company hopes these beverages will compete with ready-to-drink alcohol cocktails like those sold at the LCBO.
There is also a pure cannabis distillation that will be sold in 150-ml bottles, contain 10 milligrams of THC and can be used to mix your own drinks as with vodka or gin.
A line of flavoured sparking waters with two milligrams of THC and 28 milligrams of the soothing cannabis component CBD, and a 10-milligram THC drink know as Deep Space — aimed at veteran users — help fill out the company’s beverage lineup. Retail prices will start at $3.49 a can.
Kovacevic says the new users he hopes will be a key consumer of the drink lines will be able to gauge their intakes by their past alcohol experiences.
“Our beverages have been made to have the same onset (time), effect and duration as beverage alcohol,” he said to an often exuberant crowd. “This will allow people to substitute for beverage alcohol in their daily lives,” he said, noting the cannabis drinks have zero or low calories and produce no hangovers.
Two milligrams of THC in a drink is considered the equivalent of a single alcohol serving.
But Brown warns that as with alcohol, different body types and metabolisms will vary the effects of cannabis and that customers will have to find their own tolerance levels.
The Canopy vape lineup includes both refillable and rechargeable cartridge devices and disposable pen-like products.