Cannabis LPs have Invested in New & Differentiated Products, but they are Still Not Allowed to Market them in Canada

If you read some of my older posts, you will see that I have been very critical of the different levels of Canadian government for their treatment of the LEGAL cannabis industry. Most specifically, the Health Canada regulations around the industry’s ability to market their products to Canadians. In truth, back in October 2018, the newly licensed cannabis producers did not really have many products that were perceived to be much different than what a regular user could buy from the dealer down the street. You can get cannabis flower anywhere (albeit with no quality control/inspections, but at a much lower price!).

Fast forward a year and a half and Cannabis 2.0 has finally ushered in some products that you are not likely to see from your local legacy supplier. Edibles and confectionary in many convenient formats, and some interesting vape systems and concentrates (even hash!) are now readily available. On the beverage side, some expected (waters and iced teas) and unexpected products (dissolvable infusions and hot teas) are finally being featured.

Now that the legal cannabis industry finally has some new news – they are hit hard, yet again. Not just by COVID-19 (like everyone else), but by some provincial government COVID-19 restrictions that treat cannabis retail more harshly than alcohol. Cannabis marketers, already restricted from popular marketing channels such as social media and sponsorship marketing, TV, radio and print advertising, understand that in-store marketing is a cost-effective way to communicate product benefits and generate awareness of new product formats, such as the aforementioned teas, chocolates, confectionary, vapes and infusions. Most of these marketing opportunities, including in bars and venues where only people 19+ could attend, are closed by the crisis. And while many provinces determined cannabis retail was an ‘essential service’ and kept these stores open (just like their beverage alcohol cousins), the government of the largest province in Canada – Ontario – plus the governments of Newfoundland, PEI and Nunavut, are only allowing online and/or curb-side pickup.

The new and different product formats help breathe new life into an industry that has had a rocky start in most jurisdictions. Beverage alternatives, such as hot teas and dissolvable infusions, may attract new users to the category; in Colorado, the dissolvable infusions format holds three places in the top 10 of cannabis beverage products, including the top-selling SKU. Some of these new products may also be adopted as a new ritual (tea before bedtime anyone?) by experienced cannabis users. The COVID-19 threat to the respiratory system has made formats such as oils, confectionary, baked goods, beverages and infusions more viable alternatives to smoking flower.

Cannabis producers, like many of us, are struggling to keep their businesses afloat throughout the COVID-19 crisis. They don’t need anything more of the Canadian government than is being provided to any other similar-sized business. Cannabis LPs are investing in new product development, but have a hard-enough time competing with the legacy black market (who have surely not ‘shut down’ during this unprecedented period). The federal government, in particular, should take another look at the restrictive regulations on commerce and marketing that they have applied to this legal industry and start to treat it more like alcohol.

Cannabis LPs have invested in new & differentiated products, but they are still not allowed to market them in Canada
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Cannabis LPs have invested in new & differentiated products, but they are still not allowed to market them in Canada
Over six months into Cannabis 2.0, we are finally seeing some interesting products that are not offered by the illegal black market – but the legal cannabis industry can’t really tell you about them.

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