Published on June 5, 2019 by oz. staff
The Canadian cannabis industry is about to tap into a brand new market — and it could be worth billions.
A new study by consulting company Deloitte predicts the legalization on Oct. 17, 2019, of edibles and concentrates will generate $2.5 billion a year.
In fact, the report says this new untapped group of people who are reluctant to smoke or vape weed will generate even higher profits for retailers than current cannabis products on the legal market.
These “cannabis-curious” consumers are expected to be older, often female Canadians who prefer more familiar consumption methods, notably edibles like baked goods.
Okanagan cannabis producer Flowr sees the potential of the edible market and has partnered with chef Ryan Reed to develop edible products for the company.
Nibbling at the booze market
“The introduction of cannabis-infused edibles will clearly threaten the alcohol industry as consumers are using the product for similar usage occasions,” says Jennifer Lee, who’s with Deloitte.
Alcohol and tobacco companies are looking for opportunities to enter the legal cannabis industry to avoid losing that market share.
That’s good news for investors, as it could continue to fuel an already strong market for mergers and acquisitions in the cannabis sector.
The report says pharmaceutical companies are also entering the market, as people are turning to cannabis-infused products, like topical creams, to manage various health and wellness issues.
$100B up for grabs
Canada has a tremendous advantage over competitors worldwide in the global cannabis market, which is worth more than $100 billion among the top 13 cannabis markets.
“The global cannabis market is enormous, and Canadian firms are well-positioned to play a pivotal role as this market grows and evolves,” says Lee. “Cannabis companies with strong professional leadership and business fundamentals, a focused strategy, and a willingness to place bets — while playing the long game to wait out the changing regulatory environments — will be the ones who succeed and prosper.”
More than half of the estimated $2.7-billion Canadian market for edibles and alternative cannabis products will be spent on edibles ($1.6 billion), followed by cannabis-infused beverages ($529 million), topicals ($174 million), concentrates ($140 million), tinctures ($116 million), and capsules ($114 million).
Nearly half of likely edible users are planning to consume gummy bears, cookies, brownies, or chocolate at least every three months.
(We should note that Deloitte does have a shaky track record when it comes to cannabis sales projections.)