Rolling out Cannabis 2.0: The Era of Edibles

On October 17, 2019, edibles, extracts and topicals became legal in Canada, ushering in the cannabis 2.0 market. Since that day, companies have been eligible to apply for licenses to produce edibles – albeit, under the microscope of a heavily mandated regulatory regime.

As part of the application process, those looking to enter the market must serve a Notice of New Cannabis Product to Health Canada, detailing all requisite information about the proposed product. After 60 days, approved products are set to hit the shelves – or so is the promise. It is yet to be seen whether December 15, 2019 will mark the day where flagship products are ready for distribution, though experts warn of an anticlimactic December as these products continue to make its way up the regulatory ladder.

As a departure from marketing regulations surrounding alcohol, cannabis is subject to the same, if not more stringent restrictions than tobacco; for example, the marketing cannot appeal to children, the packaging must be plain, and the products can only contain 10 mg of THC. The higher threshold of regulations is owed primarily to the fact that edibles are accountable to dual legislation: the Cannabis Act  (S.C. 2018, c. 16) and the Food and Drugs Act (R.S.C., 1985, c. F-27), and its respective regulations.

For many producers, the view to profitability is curbed by the regulatory realities of the market. The marketing restrictions mean they will be unable to distinguish and build their brand. The net result is: most producers are opting to be selective in marketing a limited range of products by hanging their hats on quality over quantity. The goal appears to be to start slow, canvas the consumer’s appetite for the product, and build up from there.

It will be interesting to observe the cannabis 2.0 industry take shape with the producers testing the Canadian waters with their craft product, while the consumers benefit from a smaller selection but of the good stuff.