Canada rolls out legalization 2.0 as CBD products hit the shelves

6660
Canada's 2.0 legalization

Many cannabis investors remember clearly the excitement and anticipation surrounding Canada’s initial pot legalization back in October 2018. This time around, however, the excitement seems to have died down for Canada’s 2.0 legalization, which now allows cannabinoid (CBD) derivative products such as beverages, Edibles, and oils, to be legally sold in retail shelves all across the country. While the law official passed in October, the actual date that the products themselves were supposed to start hitting the shelves was on December 17.

At the moment, Health Canada has restricted the amount of certain cannabis compounds – specifically tetrahydro cannabidiol (THC) – to just 10 milligrams per edible product, although this could easily prove too much for consumers that haven’t tried these types of products before. Legalization 2.0 is expected to help pot producers in Canada a lot as it would add new demand and hopefully help out their financial positions. Most pot stocks are losing money at a rapid rate, so analysts will be paying close attention to how their revenue figures change post-legalization 2.0.

Edibles, beverages, and oils are also expected to act as “gateway” products to help people who initially were reserved about trying out the marijuana plant. For a decent number of potential consumers, the stigma behind marijuana use still deters many from trying it out. The idea is that these types of CBD-products are easier to market to potential customers and could open the door to future cannabis sales from these consumers down the road.

Many marijuana companies have been waiting for this patiently, taking the time to fine-tune their own CBD-derivative products in the meanwhile. One of these was Tilray (NASDAQ: TLRY), which announced on Tuesday its new line of cannabis 2.0 products, which include gummies, CBD-chocolate, beverages, vape products, and more. Despite the news, shares of Tilray ended up dipping 2% over the day.

Although most stores across the country will carry these products, the provinces of Alberta, Quebec, and Ontario – three of the largest markets in the country – won’t see any of these new products hit the shelves until sometime in January. This is because these provinces have their own, unique distribution systems that involve intermediary provincial entities rather than just letting pot producers ship directly to dispensaries.

Ontario, in particular, has been struggling with its own distribution process as here haven’t been enough dispensaries to go around, leading to product stockpiles and bottlenecks. Although the provinces is now adding a number of new retail outlets in an effort to fix this problem, cannabis stocks might not see much in sales from the province until this problem gets sorted out by officials.

Tilray Company Profile

Tilray, headquartered in Nanaimo, Canada cultivates and sells medical and recreational cannabis through a portfolio of brands that include Canaca, Dubon, and Manitoba Harvest. The bulk of Tilray’s sales are in Canada, but the company also sells CBD Products in the U.S. and exports medical cannabis globally from its production facilities in Canada and Portugal. Tilray also has a partnership with AB InBev to develop cannabis-infused drinks.- Warrior Trading News

NO COMMENTS

LEAVE A REPLY