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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.

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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
Suprette 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.).

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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.





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