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Cannabis 2.0 Has Arrived

The second wave of the cannabis legalization wave arrived last month on October 17. “Cannabis 2.0” saw the government approval process begin for infused edibles and drinkables, as well as other alternative cannabis products, including extracts, topicals and vaping products.

With a two-month government approval process required for all new products, Canadians will start to see alternative cannabis products start to appear on retail shelves and online stores by mid-December, and then really gain steam in 2020. The introduction of these new products is forecasted to add substantial new revenues to the growing legal cannabis market and appeal to many consumers who are looking for other form factors for their consumption.

The spread of the products will be spurred by the opening of new stores in markets that have been slow to get going, such as Ontario and British Columbia. And as safe, regulated cannabis edibles become widely available, industry observers believe that this may start to make a dent in the unregulated market.

“Convenience, price and selection within a regulated framework, all three of those things will ensure the adoption, expansion, growth and sustainability of legal cannabis consumption,” says Andrew Udell, CEO of the blog The Cannalysts.

Tightly Regulated Sales of New Cannabis Products

For cannabis merchants and licensed producers, the new products represent a great new opportunity, with estimates of the new market being worth $2.7 billion annually. Since cannabis was first legalized a year ago, approximately 11 percent of Canadians say they are already consuming edibles and this number is expected to rise to 13 percent when legal edibles finally hit the retail shelves.

While the derivative cannabis products offer a chance for more diversified inventory and greater sales, they will also present certain challenges for merchants and producers, with new government regulations designed to keep the products out of the hands of children (especially foods they might be attracted to, such as THC-infused gummies and baked goods) and to further diminish the unregulated market.

Government regulations include plain packaging with the standard THC symbol, health warnings and levels of THC and/or CBD. For edibles and drinkables there is a cap of 10 milligrams of THC per container, and extracts and topicals are limited to 1,000 milligrams per container.

The new cannabis products also cannot contain nicotine, caffeine or alcohol, and companies cannot call cannabis beverages beer or wine.

How Cannabis 2.0 Will Roll Out Across the Country

Besides federal regulations, the individual provinces and territories can also add their own regulations on the new cannabis products sold through licensed retail stores, Crown corporations (such as the Nova Scotia Liquor Corporation) and online.

For example, Quebec said it wouldn’t allow the sale of some cannabis edibles, such as gummies and baked goods, but would others, such as cannabis butter and oil. The first products to become available in the province are expected to be teas, various types of carbonated water, vape pens and non-alcoholic beers.

In British Columbia, the government wants to see a lot of small-scale production of edibles to help encourage regional economic development, perhaps even permitting farm-to-gate sales in small communities.

“I don’t want it to be dominated by one or two large-scale variety of producers,” says B.C. solicitor general Mike Farnworth. “I think there’s room in this market for a considerable variety of product and a considerable variety of producers.”

In Alberta, the Alberta Gaming, Liquor and Cannabis Commission isn’t expected to start shipping edibles and other products to its retailers until some time in 2020.

Other provinces and territories are predicting a slow rollout of products in mid-to late

December, but with the bulk coming in the New Year.

Health Canada has also said it will not for the moment delay the rollout of vaping products, but it will continue to monitor the situation to see if further regulation is necessary.

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