Canadians take a bite out of cannabis edibles amid COVID-19

31 Mar 2020 --- Cannabis formulated in food and beverages could be a market category full of potential in Canada, since it legalized the sale of edibles, extracts and topicals last year, paving new possibilities for industry. “Althougth edibles have only made it to market since mid-January, preliminary sales data on new consumers indicate that they might be more open to cannabis in non-smoking formats,” Brian Sterling, President at SCS Consulting tells FoodIngredientsFirst, indicating a wealth of potential for the F&B and personal care industry.

Canada-based companies such as The Green Organic Dutchman Holdings (TGOD) is capitalizing on the growing cannabis industry by expanding its processing facility. TGOD announced the expansion following the license amendment, approved by Health Canada and plans to roll out a series of differentiated consumer packaged goods, including organic teas and vapes in Q2, as well as edibles, beverages and topicals later this year.

“Receiving this license amendment was a key element of our 2020 operating plan. We made significant investments in this facility, and now that it is fully licensed, Ancaster can finalize the ramp up of its production capacity,” comments Brian Athaide, CEO of TGOD.

Gummies are a popular format to deliver both THC and CBD elements of cannabis. Opportunity for the food and beverage industry may also lie in the healthy alternative it provides to smoking and vaping. “There has been a natural pullback from vaping because of the contaminant-based lung infections that swept through US markets at the end of 2019 and into 2020,” observes Sterling. TGOD reports this final phase of expansion as Anacaster enables it to reduce its reliance on third parties, accelerating its supply chain timelines for product launches and eliminating bottlenecks. The license amendment is valid until August 16, 2022 and is subject to customary terms and conditions.

Cannabis during COVID-19
While the coronavirus outbreak is halting some business to a standstill, the cannabis industry is continuing to grow. Sterling estimates the current sales have jumped by 15 to 20 percent in volume sold in the past month in Canada. This may be due to stockpiling, as well as a decrease in retail prices, most notably in Ontario.

Amid COVID-19, some stores selling the psychoactive plant have voluntarily closed, reports Sterling, however, all provinces in Canada, so far, have designated cannabis stores as “essential businesses,” permitting them to stay open while following strict public health practices. Several are also emphasizing their “Click and Collect” service to respect social distancing protocol, he highlights.

Cannabis for recreational use is still relatively new in Canada and accordingly the new laws are seeing more consumer interest increase over the once-forbidden botanical. “In Canada, there has been a general trend in the last three weeks towards significantly higher purchases of cannabis compared to previous months, and certainly versus last year. This is both in terms of higher per-transaction dollars and demand from brand new consumers,” Sterling concludes.

By Missy Green