Cannabis edibles, drinks will mark '2nd wave' of legalization

Now that recreational cannabis is legal in Canada, producers are looking forward to what they're calling the "second wave" of legalization edibles, drinks and vaping products expected to become legal starting next year.

Bruce Linton, the founder and co-CEO of Canopy Growth, said new products developed by Tweed the cannabis brand owned by Canopy and based in Smiths Falls represent the next big opportunity.

"I think if you're not preparing things two years in advance, you're never ready," he said.

"Right now, none of the chocolate or gummy bears or beverages can be prepared or sold, but we're doing experiments on how to make them."

Recreational cannabis became legal on Oct. 17, though only dried and fresh cannabis, oil, plants and seeds are allowed under the legislation.

The federal government has said edibles containing cannabis and cannabis concentrates would be legal on or beforeOct. 17, 2019.

The legislation left asignificant portion of the illegal market untouched, saidJay Rosenthal, the co-founder and president of the news site Business of Cannabis.

"[Edibles] are the products that the black market has been really good at marketing and selling," he said.

"As a specific goal of driving out the black market, these products are really important to bring online."

Market expands

Since legalization, the demand for cannabis products has been high in many provinces.

Shipping for orders from the Ontario Cannabis Store (OCS)tooklonger than promiseddue to the volume ofordersand brick-and-mortar retail locations in Quebec had to trim store hours amid stock shortages.

Edibles and infused beverages may come with even higher demand, Linton said, as some consumersmight consider eating and drinking the products to be more socially acceptablethan smoking them.

"If you come to my house, do you want me to pour you abeverage that makes you feel a little happy?Or do you want to smoke marijuana?" he said.

"Many people find it socially comfortable to have a beverage."

Rosenthalsaid edible products and beverages also contain consistent doses of cannabis oil and have a reproducible effect, while the effects from smoking cannabis can vary widely.

Brand-building starts

Some Canadian companies have been looking to states such asColorado, where recreational cannabis sales became legal in 2014, to see how producers there are keeping up with demand for edibles.

"It's about getting commercial grade kitchens up and running, because that is not easy," Rosenthalsaid.

"Creating the next wave of products and facilities to actually churn those out is going to be a challenge."

Chuck Rifici, the chairman and CEO of AuxlyCannabis Group, said his 18-month-old company is jumpingright into developing edible products.

"We're calling it the second wave of legalization," he said.

"We're focusing on everything from different types of edibles to ready-to-serve drinks and vape pens, all the types of products that one might find if they wander into an unlicensed dispensary today."

That "second wave" will give companies the chance to develop their brand, he said, with the development of unique products, from candy to chocolate to specialty beverages.

"The average Canadian will be able to have a lot more brand differentiation because whether it's packaging or taste, there will be a lot more factors beyond just flower and bud," he said.

"The brands will really start being built next year."