Cannabis was approved for recreational use in Canada in 2018 in the form of dried cannabis, cannabis oil, fresh cannabis, cannabis plants and cannabis plant seeds. The new law has opened up a whole new crop of innovative businesses that are positioning themselves for a unique market opportunity. Cannabis products can be used in infinite ways to create new products and new markets. From candies, cookies, pies and cakes, to teas, capsules, vapes and topical ointments, the marketplace is opening wide to new products and new types of customers.
In an effort to understand where the cannabis marketplace is going in Canada and elsewhere, Deloitte conducted comprehensive research to anticipate the consumer response to cannabis edibles and alternative products. Deloitte also interviewed key Canadian stakeholders in the business and around the world in the cannabis market. Headset, an analytics service provider for the cannabis industry, partnered with Deloitte to compare the current Canadian market with the smaller entry into the market in the United States.
As with any new product and market, there will be plenty of opportunity along with the risks in both countries. While Canada is a front-runner in the market currently, a few smart moves by a strong competitor could set them back.
At present, each province is progressing at its own pace, so the growth is vastly uneven across the country. As cannabis businesses progress from startups to established businesses, there is a need for strong business fundamentals. The current environment is ripe and ready for major mergers and acquisitions activity. While cannabis is the new hot market, players need to proceed cautiously, and not pass over due diligence in their haste to enter this viable market.
The cannabis market will be driven by data and analytics to discover key insights that will assist boards and CEOs in making quicker, wiser business decisions.
Deloitte forecasts that the annual worth for edibles and alternative cannabis products will be $2.7 billion in Canadian dollars. The firm estimates that the bulk of the products will be edibles and cannabis extract-based products, which could reach $1.6 billion in Canadian dollars. Additional estimates for products may reach the following numbers in Canadian money:
Education is sure to be a major factor in marketing to consumers. Some customers will be familiar with the products and their effects while the majority will need to be educated. Cannabis companies will need to get to know their competitors, which will also be fairly new to the marketplace. According to Deloitte, about 54% of customers will prefer to buy cannabis products from government retailers. Approximately 53% of consumers will probably buy from licensed private retailers, while around 46% of consumers will purchase cannabis products from licensed producers or manufacturers.
Other countries have been slower to legalize or decriminalize cannabis. This means that Canada has the best chance to become the front-runner for the market in a global sense.
Canada has set the stage for new players to enter the arena with cannabis offerings in new categories. With so many product offerings possible, edible and alternative cannabis products have strong growth potential. These products will likely energize mergers and acquisitions activity within the industry in a major way.
According to Deloitte estimates, the Canadian market for edibles and alternative cannabis products could reach up to $2.7 billion (in Canadian dollars) in annual sales. Researchers predict that cannabis extract-based products, including edibles, will yield $1.6 billion alone in Canadian dollars.
Currently, about 11% of Canadian citizens are purchasing and consuming cannabis edibles and alternative products. That percentage is expected to jump slightly to 13% as edibles and other alternative products are a more discreet way for people to consume cannabis and not draw attention to their habits or create a stigma.
CBG is a form of cannabis that is nonintoxicating and that doesn't produce the highs of traditional cannabis cigarettes. CBG suppliers will be looking for their niche in this market as well.
Cannabis companies that have their eyes on the markets in the U.S. will be encouraged and enlightened by the success of these products with their northern neighbors. Canadian companies would be wise to note the differences between U.S. consumer behavior and Canadian consumer behavior. The U.S. market may take on a different appearance and shape than its Canadian counterparts.
Cannabis edibles and alternative products have the potential to be huge market disruptors in every country. This industry is begging for a watchful eye. The breadth and pace of the growth of the cannabis industry calls for strong leadership and watchful eyes on the board and within top leadership. The best way to do this is by taking a modern approach to board governance. Diligent Corporation designed board management software with innovative, forward-thinking companies like those that market cannabis in mind. This is certainly a market where board directors have a huge opportunity to be a market leader, but only if they have the information to ask the right questions to get the right answers to take their company to the top.
Success in this industry will depend on having a diverse board, a unique marketing and branding plan, and keeping a constant watch on the marketplace. Diligent Boards and Governance Cloud are the best first step to keeping ahead of the competition.
In an effort to understand where the cannabis marketplace is going in Canada and elsewhere, Deloitte conducted comprehensive research to anticipate the consumer response to cannabis edibles and alternative products. Deloitte also interviewed key Canadian stakeholders in the business and around the world in the cannabis market. Headset, an analytics service provider for the cannabis industry, partnered with Deloitte to compare the current Canadian market with the smaller entry into the market in the United States.
As with any new product and market, there will be plenty of opportunity along with the risks in both countries. While Canada is a front-runner in the market currently, a few smart moves by a strong competitor could set them back.
What Does the Research Say on Cannabis?
In early 2019, Deloitte surveyed 2,000 Canadian adults and compared their data with data from Headset to identify the similarities and differences between the U.S. and Canadian markets.At present, each province is progressing at its own pace, so the growth is vastly uneven across the country. As cannabis businesses progress from startups to established businesses, there is a need for strong business fundamentals. The current environment is ripe and ready for major mergers and acquisitions activity. While cannabis is the new hot market, players need to proceed cautiously, and not pass over due diligence in their haste to enter this viable market.
Challenges That Cannabis 2.0 Will Bring
Due to the uniqueness of the product and the fact that it was formerly widely illegal, companies that market cannabis products won't be able to rely on traditional branding and marketing efforts to reach their target audiences. Consumer experiences will set the pace on how marketers can best grab their attention.The cannabis market will be driven by data and analytics to discover key insights that will assist boards and CEOs in making quicker, wiser business decisions.
Deloitte forecasts that the annual worth for edibles and alternative cannabis products will be $2.7 billion in Canadian dollars. The firm estimates that the bulk of the products will be edibles and cannabis extract-based products, which could reach $1.6 billion in Canadian dollars. Additional estimates for products may reach the following numbers in Canadian money:
- Cannabis-infused beverages: $529 million
- Topicals: $174 million
- Concentrates: $140 million
- Tinctures: $116 million
- Capsules: $114 million
Education is sure to be a major factor in marketing to consumers. Some customers will be familiar with the products and their effects while the majority will need to be educated. Cannabis companies will need to get to know their competitors, which will also be fairly new to the marketplace. According to Deloitte, about 54% of customers will prefer to buy cannabis products from government retailers. Approximately 53% of consumers will probably buy from licensed private retailers, while around 46% of consumers will purchase cannabis products from licensed producers or manufacturers.
Opportunities That Cannabis 2.0 Will Bring
While this new market will bring plenty of challenges and a certain degree of uncertainty, it's a prime target for big opportunities as well. The industry is just now settling down a bit. Industry leaders will be vying for the top spots in the competition. Companies that are insight driven will most likely lead the pack.Other countries have been slower to legalize or decriminalize cannabis. This means that Canada has the best chance to become the front-runner for the market in a global sense.
Canada has set the stage for new players to enter the arena with cannabis offerings in new categories. With so many product offerings possible, edible and alternative cannabis products have strong growth potential. These products will likely energize mergers and acquisitions activity within the industry in a major way.
According to Deloitte estimates, the Canadian market for edibles and alternative cannabis products could reach up to $2.7 billion (in Canadian dollars) in annual sales. Researchers predict that cannabis extract-based products, including edibles, will yield $1.6 billion alone in Canadian dollars.
Currently, about 11% of Canadian citizens are purchasing and consuming cannabis edibles and alternative products. That percentage is expected to jump slightly to 13% as edibles and other alternative products are a more discreet way for people to consume cannabis and not draw attention to their habits or create a stigma.
CBG is a form of cannabis that is nonintoxicating and that doesn't produce the highs of traditional cannabis cigarettes. CBG suppliers will be looking for their niche in this market as well.
Cannabis companies that have their eyes on the markets in the U.S. will be encouraged and enlightened by the success of these products with their northern neighbors. Canadian companies would be wise to note the differences between U.S. consumer behavior and Canadian consumer behavior. The U.S. market may take on a different appearance and shape than its Canadian counterparts.
Cannabis edibles and alternative products have the potential to be huge market disruptors in every country. This industry is begging for a watchful eye. The breadth and pace of the growth of the cannabis industry calls for strong leadership and watchful eyes on the board and within top leadership. The best way to do this is by taking a modern approach to board governance. Diligent Corporation designed board management software with innovative, forward-thinking companies like those that market cannabis in mind. This is certainly a market where board directors have a huge opportunity to be a market leader, but only if they have the information to ask the right questions to get the right answers to take their company to the top.
Success in this industry will depend on having a diverse board, a unique marketing and branding plan, and keeping a constant watch on the marketplace. Diligent Boards and Governance Cloud are the best first step to keeping ahead of the competition.
