Most analysts expected that the long-anticipated cannabis legalization in Canada would see an explosion in users both familiar with the plant as well as curious newcomers interested in experimenting. Much to the surprise of most experts, however, new data shows that the number of Canadians using weed has hardly changed since legalization last October. While many consumers switched from black market sources to licensed dispensaries, the total amount of users hasn’t changed drastically.
According to Statistics Canada, around 15 percent of Canadians 15 years or older reported using cannabis in the past three months. While that represents around 4.6 million Canadians, the figure has remained almost unchanged from the previous quarter. Although more Canadians in this report said they were planning on trying the plant in the next three months, the figures remain disappointing for analysts who expected legalization to bring more, new consumers.
While both legal and illegal weed use was counted in the survey, the statistics would imply that there is still a substantial stigma behind cannabis consumption. Many industry experts are well aware of this, with marketing and branding experts likely to play an increasingly leading role in helping destigmatize cannabis consumption. Asides from this focus on the part of companies, more businesses are focusing on providing high-end retail experiences, in contrast to the stereotypical depiction of dispensaries are being somewhat shady establishments.
“There’s a learning process that both the industry, law enforcement and regulatory authorities are going through as industry matures,” said Smoke Wallin, CEO of Vertical Wellness. “Congress and the president didn’t sign a Farm Bill including hemp only to be held up by agencies not allowing the No. 1 most popular use of hemp – CBD.”
At the same time, other experts suspect that Canada’s legalization of cannabis-infused edibles and beverages in October 2019 could help open the market up to new consumers. The appeal of these edibles is quite different from regular cannabis purchasers, with their customers valuing taste over price. By 2022, the combined U.S. and Canadian edibles markets will be estimated at $4.1 billion according to a report from Arcview Market Research , a drastic jump from the $1 billion spent on edibles back in 2017.
“Legal cannabis-derived edible products, from candy and chocolate to infused beverages, is a sector worth watching over the next few years,” the report stated. “It has become clear that the legal cannabis market is about much more than inhaling the smoke of smoldering cannabis flower.”
The news comes as U.S. investors realized that despite the passing of the 2018 Farm Act that legalized hemp production, the U.S. Food and Drug Administration published guidelines that will not be allowing CBD into food or drinks without prior approval. As such, many companies are now in a state of limbo concerning their CBD-infused edibles products.
While both U.S. and Canadian investors ended the week with poor news, so far, the beginning of 2019 has seen strong comebacks in share prices in comparison to Q4 last year. The Horizons Marijuana Life Sciences Index ETF, a composite of a variety of different cannabis companies, lost 2.5 percent in today’s trading session.
