Canadian cannabis beverages get a slow start

Published Dec 28, 2020 10:00 a.m. ET
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One of the strict regulations that Health Canada requires of the legal cannabis-infused beverage industry, is that the drinks remain stable. Each cannabis-infused drink must provide consistent potency levels for three months before it will be approved for sale in Canada.

Canadian cannabis on the recreational level has been federally legal since 2018. The legalization of edibles, however, followed one entire year later. The market for the edible side of cannabis legalization has been somewhat slow in taking hold. Brands waiting to sparkle are struggling with product preservation. Brands are looking for and needing more guidance and direction from Health Canada.

Roadblocks

There is a grey, not a green area, where edibles come into play. The potential that edible products can be sold out of a medical dispensary has put these products in a tighter restriction position before being introduced into the market. According to Johnathon Storper, a San Francisco attorney who has worked both in the U.S and Canada, and is currently working with BevCanna, there are many roadblocks ahead for the edible market. Finding investors while also funding startups requiring large amounts of money to comply with Health Canada, is a complicated process.

Low numbers

Like Molson Coors Beverage Co. and Constellation Brands Inc, some of the beverage giants are backing the drink portion of the cannabis industry. The slow start is indicated by the 23 million dollars of cannabis-infused beverages sold in the first eleven months. Those numbers only represent 1.5 percent of the total Canadian cannabis market. Manufacturing delays, quality and taste issues, among other things, can be attributed to the low numbers in sales. Trouble convincing cannabis consumers to change their preferred manner of getting high from smoking to something new like drinking a beverage has also added to the low sales.

Canopy Growth Inc

One of the largest cannabis brands in Canada is Canopy Growth Corp. Canopy Growth Corp's spokesperson has reported that their products have been sold out in both their retail outlets and online. The most popular item is their infused-chocolate. In March, Canopy Growth Corp started to ship its first marijuana beverage across the Canadian provinces. Formerly Tweed Marijuana Inc, based in Smith Falls, Ontario Canopy Growth Corp, began shipping their beverages.

Some of the Tweed brands being shipped include:

  • Tweed Houndstooth & Soda with THC.

  • Bakerstreet & Ginger

  • Penelope & Tonic

Truss Beverages Inc

The joint business venture between cannabis producer Hexo Corp and Molson Coors has taken over the lead that Canopy Growth Inc had previously set. November saw a 35 percent share in the market after only three months. The company is launching five different brands totalling 16 new products.

Some of the beverages include:

  • XMG the highest potency beverage

  • House of Terpenes is more akin to a mocktail/cocktail.

  • Vervell is a CBD-only beverage directed at self-care brands.

Policy changes

The future of cannabis-infused beverages in Canada needs to have some policy changes to aid in increasing market revenues. An expansion allowing consumers to purchase more than six cannabis-infused drinks is one necessary change to the policy. Cannabis-infused drinks currently do not contain more than ten milligrams of cannabis per beverage. Another needed change would be that the provinces would loosen the rules and regulations regarding the methods and areas of publicly consumed marijuana.

Final thoughts

You may have heard the words before, " Rome was not built in a day," and those words are just as appropriate when discussing the legal marijuana-infused beverage industry. The cannabis-infused beverage businesses' task is to use more word of mouth to create awareness. Creating ways for people to try the infused beverages will help support this next step in using legal cannabis.

In Ontario, there are no plans for investigating the likelihood of cannabis consumption lounges. However, Manitoba is exploring the idea. Although this part of the industry may have started at a slower pace than we had hoped for, the expectations are for this drink category to reach the 500-million-dollar mark in sales within the next five years in a reality.

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