Deloitte is predicting the soon-to-be legalized edibles market in Canada will be worth $2.7 billion and will generate higher profits for retailers than cannabis products that are already legal.
In their new report Nurturing new growth: Canada gets ready for Cannabis 2.0, Deloitte says “the legalization on October 17, 2019, of edibles […] will create new product mixes that will reach consumers who may have been reluctant to try traditional cannabis consumption methods that are currently available. Many of these novice or “cannabis-curious” consumers will be older, often female Canadians who will prefer more familiar consumption formats, notably edibles such as baked goods.”
Cannabis retailers may reap the benefits but the liquor industry should be worried. “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, a partner and Deloitte Canada’s Cannabis National Leader, and Consumer Advisory and Analytics Practice National Leader.
The Canadian cannabis industry could also be under threat from the changing United States market. Canadian companies currently enjoy significant advantages over the US, like government support, access to capital markets and the banking system, and a unified market, but the introduction of the US Farm Bill could change all that.
Other highlights from the report:
- 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
- Canada’s edibles market will help maintain the country’s leadership position in the global cannabis market, worth US $100 billion today and predicted to reach US $194 billion by 2025
Find the full report here.