Backlash 2.0 or Opportunity?
Canada’s legal cannabis maiden anniversary falls on 17th October this year. The date will usher in the next wave of legal products in the market to include previously regulated formats like edibles, topicals, extracts and concentrates. Cannabis brands, regulators, and the regular consumer are racing towards “Legalization 2.0” with anticipation and anxiety. Support for legal cannabis has increased post-legalization in all provinces except Quebec, according to Vividata’s Vivintel, the largest syndicated study of Canadian cannabis consumers. Yet, the same survey reveals that 45% of Canadians report cannabis consumption as unacceptable. In fact, more Canadians would decrease their usage of well-known brands across health and wellness (24%), beverages (30%), CPG (30%), personal care (26%) and restaurants (34%) if they launched products containing cannabis. This indicates that stigma remains entrenched in attitudes towards the plant.
The estimated market size of legal cannabis is $4bn to $8bn in Canada. However, the illegal market remains the top source of cannabis purchases in Canada with over 1/3 of all cannabis sales happening in the black market today (Vivintel 2019). The legal cannabis supply isn’t keeping up with demand and access to the market is still low, especially in Ontario. Moreover, cannabis of sub-par quality acquired from unregulated sources creates a domino effect throughout the supply chain. CannTrust and Canopy Growth received bad press for non-compliance with standards including the sale of unregulated stock and use of unlicensed facilities, triggering a backlash in industry, media and consumer circles.
Canada’s retail provincial rollout has also been perceived as a failure and consumers and citizens are looking to see how or whether this will ferment in the upcoming federal elections. The recent US vaping crisis didn’t improve things for cannabis brands and consumers either. According to Vivintel, only 11% of Canada’s cannabis consumers (current or potential) use vapes. Therefore, the vaping crisis’ impact on sales was noticeable if small, allegedly attributed to low quality THC from unregulated sources along with heavy metal detected in the hardware.
Canada and the US are largely flower markets albeit with fast growing groups of women, medical and senior consumers excited by forthcoming edibles and infused Christmas goodies. Currently only 12% of current consumers consume cannabis edibles according to Vividata. However, the preferred method for most (55%) consumers is reported to be edibles – making this a game-changer as Canadians get ready for new formats of legal cannabis. Cressida Firth, manager of the Superette shop, a cannabis store in Ottawa said:
“Flower is not going away anytime soon. Smoking a joint, hanging by the cottage, it’s all Canadianna.”
Firth transitioned from the airlines industry to cannabis noticing the opportunity in applying her people-skills in hospitality to the booming sector of cannabis. In Canada, much of the cannabis workforce also draws from previously illegal or legacy markets. Whereas in Europe, cannabis professionals are more likely to come from the pharma, health, and related backgrounds, suggest employers.
Global Perceptions Have Changed
As legal cannabis gains support in Canada and globally, it also gains social acceptance:
“Cannabis is no more portrayed as your typical 420 dreadlocks underground culture”
Pete Patterson, COO and Co-Founder of Vitalis Extraction Technology
According to Patterson, the biggest expense in cannabis production is cultivation, demanding specific climate conditions; hotspots include Greece, Portugal, Latin America and the Caribbean. Denmark is a power hub offering the cleanest and cheapest power (using wind and biogass) in all of Europe, said Patterson. 72% of all cannabis companies in Denmark use renewable energy. However, their country’s common goal across political beliefs, is to become 100% reliant on renewable sources by 2030, said Michael Prytz, Investment Manager, Invest in Denmark.
Europe’s focus currently is Germany because of its ease of legislation (Canada is an exporter). However, Patterson pointed to Poland as a sleeping giant – it has had a medical marijuana program since 2017. Throughout Europe, CBD has a relatively small market. “CBD is a ‘novel food’ and to be sold as such, it needs to go through a pre-marketing EU authorization which so far no company has finished,” elaborated Alfredo Pascaul, International Analyst of MjBiz Daily, at the MjBiz International Conference. Locals also share that CBD oil can be found in some stores, like many grey market products. Worldwide, the booming wellness industry presents CBD with new opportunities as a medical product and drug. Two distinct uses of CBD are thus emerging: medical (which is specific) versus wellness (which is broader and includes cosmetics, superfoods, etc.).
Mobilizing Healthy Cannabis Communities
Global movements from Alzheimer’s and cancer researchers and patients, LGBTQ+ groups, waves of immigrants and communities of colour, have all advanced cannabis advocacy. Advocates across the spectrum of causes affected by the ongoing war on drugs have been rallying for justice and legitimacy.
“More channels for cannabis activism are always empowering,” said Patterson. “Cannabis activism comes from an attitude of people in the black market dealing with patients. In past decades, cannabis has been a source of activism for change in bureaucracy. The cannabis community is seasoned by the fight for advocacy.”
The Canadian Chamber of Commerce’s Cannabis Committee exists to give the industry voice and offer direction along with other formal active cannabis groups like the Hemp Trade Association and the Licensed Producers Association that lobby for industry professionals. The question to ask is if groups—whether for advocacy or networking—are effecting change or simply selling membership, warns Patterson.
Brands must keep innovating and collaborating to activate events and experiences that educate cannabis consumers and communities. The excitement nearing Legalization 2.0 in Canada (but also US) is palpable as new formats of legal cannabis will stretch the metaphor of this journey of a forbidden crop to a super-luxury good, casting a whole new canvas for other neglected causes in the clamour to be heard to drive positive change.
