Deloitte published its third annual report on Canada’s cannabis sector, and its numbers are fairly optimistic. (Optimism marked the two previous reports as well.)
Global, MJ Biz Daily

Its predictions include:

  • Alcohol producers may lose customers to the 35% of cannabis consumers who consider it an alternative to booze.
  • The Canadian sector is well-positioned to grow globally before eventually losing its advantage in cultivation to nations in warmer climes.
  • The number of Canadian LPs will be reduced by half as the industry expands. MJBiz Daily‘s Matt Lamers noted this could be bad for the 579 pending standard applications waiting for Health Canada approval, though in a response, a commentator noted the prediction anticipated “some LPs may be going to exit through acquisition.”
  • The report calls the impending legalization of extracts, ingestibles, and topicals “Legalization 2.0,” and predicts that market alone will eventually be worth $2.7B, with edibles representing $1.6B.
  • Topicals will be a $174M market, concentrates will be a $140M market, and tinctures and capsules will represent $116M and $114M respectively.
  • Infused beverages will dwarf them all, with a $529M annual market.
  • That prediction stunned some, as it is dramatically out of keeping with the market shares of the same products in California, whose population is slightly larger than Canada’s.
  • Burnstown Farms CEO Mark Spear asked, “In what universe will beverage sales more the triple concentrates? Not a chance. I’ll take friendly bets it’s the opposite.” Other critics echoed his disbelief.
  • Lincoln Johnson, CEO of extraction company EnCann, told me he shared Spear’s incredulity. “If we look at other developed markets like CO/WA/OR/CA,” he said, “It’s not unreasonable to expect that edibles/beverages/etc. will take up substantially less than 20% of sales, with other concentrate types taking up 30-40%, and flower the remainder and declining over time. Vape pens aren’t going anywhere and will likely dominate the concentrate/extract market as they do [in the U.S.]… Of course, the Canadian market might turn out to wildly different but I wouldn’t be putting money on that bet.”
  • Edibles sales are growing, argued Visual Capitalist, so it may not be fair to base future numbers on present consumption trends.
    Visual Capitalist

Quick Hits

  1. US LP Charlotte’s Web announced it was delisting from the Canadian Securities Exchange and moving its listing to the Toronto Stock Exchange, where it may now trade because it sells hemp-based CBD products, which became legal in December with the passage of the U.S. farm bill. Expect other companies working in hemp to follow.
    Financial Post
  2. The BC Securities Commission settled with LP Beleave over market misconduct. The company admitted it claimed in April and June of last year that it had raised $10M in private placements, but had instead paid $7.5M “consulting fees” to those who would be “investing.” The BCSC noted Beleave conducted an investigation when it became aware of the allegations and sacked its management.
    Twitter—Mike Hager, Globe and Mail