In this Wednesday, Aug. 22, 2018, photo, edible marijuana samples are set aside for evaluation at Cannalysis, a cannabis testing laboratory, in Santa Ana, Calif. THE CANADIAN PRESS/AP/Chris Carlson

Canadian cannabis edibles, topicals market worth $2.7B already: Deloitte

The federal government wrapped up its consultation on the draft edible rules in February

The Canadian market for next-generation cannabis products is worth an estimated $2.7 billion annually, with edibles contributing more than half, according to a new report from Deloitte.

This spending once the final edible pot regulations roll out in the coming months is expected to be on top of the roughly $6-billion estimated domestic market for recreational and medical cannabis, the consultancy said Monday.

Consumers are looking to snap up these new pot products in addition to the dried flower, oils, plants and seeds they have been buying from legal retailers since legalization last fall, a recent survey of 2,000 Canadians conducted by Deloitte suggests.

The first wave of legalization last October was quite limited in terms of product range and the type of consumer, said Jennifer Lee, Deloitte Canada’s cannabis national leader.

“When we legalize in October again for edibles, we are in a world where the formats and the assortment is much broader,” she said. “The use cases are much broader.”

Canada is gearing up to legalize cannabis-infused foods, beverages, topicals and other next-generation products in the coming months, once Ottawa rolls out the final regulations.

Pot companies, as well as food and beverage makers, have been preparing to roll out their own pot-infused products which they anticipate will appeal to a broader audience — particularly those who aren’t interested in smoking weed.

The federal government wrapped up its consultation on the draft edible rules in February, and has said the regulations must be brought into force no later than Oct. 17, 2019.

READ MORE: Edibles legalization fraught with hurdles, lack of clarity, companies say

Deloitte estimates that roughly $1.6 billion will be spent on edibles in Canada, followed by cannabis-infused beverages at $529 million and topicals at $174 million. Spending on concentrates is expected to hit $140 million, followed by tinctures at $116 million and capsules at $114 million.

Roughly half of likely edible users surveyed by Deloitte say they plan to consume gummy bears, cookies, brownies or chocolate at least every three months.

The global market for alternative cannabis products is expected to nearly double over the next five years, the consultancy added.

Lee doesn’t expect these new products to eat into revenues from existing categories in Canada, at least in the early days.

“Over time, in the long term, you may,” she said. “But right now, there’s too much demand in the market and there’s not enough product.”

Legal pot retailers, both government and privately owned, have been contending with a shortage of cannabis since legalization last October, but have said the situation has improved in recent months.

For example, the Alberta government lifted its moratorium on new cannabis retail licences, citing an increase in the pot supply.

Deloitte’s market estimates for cannabis 2.0 products reflect overall Canadian consumer demand, but realizing the market’s full potential too may take some time. Many of the new pot products may not be available, or available in sufficient quality, come October, Deloitte said.

Companies should take a three- to five-year view on the market, said Lee.

“The regulations will need time to settle, even after legalization in October,” she said.

While this presents a growth opportunity for companies readying themselves for the next wave of the green rush, it may come at the expense of sales in more established industries.

“Our research is showing that the occasions that consumers use the product, i.e. mostly edibles, overlap a lot with alcohol … On a limited wallet, there are going to be tradeoffs,” Lee said.

As well, consumers view topical cannabis products such as lotions used for ailments such as pain as a potential replacement for other medicinal products, Deloitte’s survey showed.

“This could be cause for concern for the traditional pharmaceutical sector, as 45 per cent of current consumers and 48 per cent of likely consumers say they see cannabis topicals as an alternative to prescription medications, not a complement,” Deloitte said in the report.

Deloitte surveyed 2,000 adult Canadians online between Feb. 26 and March 11.

According to the polling industry’s generally accepted standards, online surveys cannot be assigned a margin of error because they do not randomly sample the population.

ALSO READ: B.C. police officer raises concerns about online edible sales

Armina Ligaya, The Canadian Press


Like us on Facebook and follow us on Twitter.

Just Posted

Mrs. Warren’s Profession a delightful comedic romp

Chemainus Theatre Festival did not disappoint with their production of Mrs. Warren’s Profession

Youth restore Crofton senior’s garden of earthly delights

Summer program provides a free service and gives participants a wage

Campground on the chopping block as ALC deadline looms

Owners fighting to continue facility’s operation, with a huge outpouring of support

Thetis tower project: flawed process

Primary issue not so much the outcome as the process

First Nations given max compensation for Ottawa’s child-welfare discrimination

2016 ruling said feds didn’t give same funding for on-reserve kids as was given to off-reserve kids

VIDEO: Liberals make child care pledge, Greens unveil platform on Day 6 of campaign

Green party leader Elizabeth May unveils her party’s platform in Toronto

Psychiatric assessment ordered for man accused in Salmon Arm church shooting

Lawyer tells court accused was diagnosed with psychosis hours after his arrest

Surrey mom allegedly paid $400,000 for son in U.S. college bribery scam

Xiaoning Sui, 48, was arrested in Spain on Monday night

Nanaimo RCMP officer ‘walks on water’ to rescue lost camper

66-year-old assisted earlier this month by Mounties who can seemingly work miracles

Winnipeg student, killed in bus crash, remembered as passionate, kind

University of Victoria student Emma Machado, 18, was killed in the bus crash near Bamfield on Friday

Boy overdosed on illicit anti-anxiety drug found on Kelowna classroom floor, RCMP say

Noah Mills, 8, ingested a pink powdery substance off his Kelowna classroom floor

Fewer trees, higher costs blamed for devastating downturn in B.C. forestry

Largest driving factor is the province’s complex stumpage system that results in high fees, expert says

20 day search for missing Labradoodle in Princeton, B.C. ends with tears of joy

The search brought out bloodhounds, and groups hoping to find Mordy

Most Read