After a slow start in 2019, the cannabis market in Canada is taking off, in large part thanks to marijuana edibles. Canada legalized adult-use marijuana in October 2018, but it wasn’t until a year later that marijuana edibles entered the marketplace.

Canadians are cannabis curious

Data from Mintel, a Canadian market intelligence agency, shows that the Canadian cannabis market has a large number of potential users. Six in 10 (59%) of Canadians report that they are currently using and/or interested in using cannabis.

27% of Canadians used cannabis within the first six months of legalization.

Cannabis edibles entice new consumers to the marijuana marketplace

Marijuana edibles are of huge interest to Canadian cannabis consumers and non-consumers alike.

“Edibles and drinkables can be a great introductory way for new users to familiarize themselves with cannabis and better understand the cannabis experience, potentially leading to using other forms of the product,” said Scott Stewart, Senior Research Analyst at Mintel.

32% of non-cannabis users said that they are ‘open to trying it.’ That number jumps when it comes to marijuana edibles. Among potential cannabis users, 66% of non-users said they are interested in edible and drinkable cannabis.

When it comes to age demographics, potential cannabis users showed similar levels of interest in marijuana edibles, with 47% of 20-34-year-olds, 49% of 30-50-year-olds, and 48% of those aged 55+.

“The key to future growth for many consumer industries will be to convert more of the consumers who are open to but not current users of cannabis; their hesitance to try cannabis was a contributor to the relatively low sales in 2019, but the legalization of edibles and drinkables in October 2019 will play a major role in 2020’s success,” said Stewart.

Canadians look to marijuana for health and wellness benefits

According to Mintel, Canadians are more interested in the health and wellness benefits of cannabis over its recreational uses.

“New product innovation in the cannabis market has already begun to tear down some of the barriers related to wider cannabis consumption. In addition to edibles and drinkables that do not involve smell or smoke – two of the main complaints cannabis non-users have about the product – devices like vaporizers or vape pens, which create a vapor instead of smoke, serve to minimize these unwanted byproducts.

“Our research shows that many Canadians view cannabis as a very complex and intimidating product, and the lack of understanding leads many to avoid it entirely. Brands can navigate this by using online platforms and in-store employees to help educate consumers about cannabis. Strict laws around marketing cannabis mean that brands have to be very careful about their approach, but using factual statements to help educate and familiarize potential consumers with cannabis is a good way of establishing a trusted position in the market,” said Stewart.

Ten years ago, Smiths Falls in Ontario was a small town in trouble. In the midst of a recession, the main employers in the area, including Canada’s largest Hershey’s chocolate factory, pulled up stakes, taking more than 1,500 jobs with them.

In a community of fewer than 9,000 people, the loss of so many jobs was devastating. Along with their income, people lost their homes and cars, grocery stores closed, and many of the town’s residents chose to move away.

Smiths Falls’ mayor, Shawn Pankow, said, “It was a five-year period there where it was hard to find any good news.”

That all changed in 2013, when Tweed Inc. and its parent company, Canopy Growth Corp. moved into Hershey’s old factory. Initially, the medical marijuana company promised the town about 150 jobs.

“And then Justin Trudeau comes along and says, ‘You know, we should think about recreational cannabis.’ And there was a lot of smiles in this building,” said Jordan Sinclair, vice president of communication for Canopy Grown Corp.

When Canada legalized recreational marijuana in October 2018, the company shipped more than a million cannabis orders in four weeks.

Five years after setting up shop, Canopy is the largest pot company in the world and employees more than 3,000 people globally. And Smiths Falls has gone from a virtual ghost town to the unofficial weed capital of Canada.

Carol Lawrence, who was once a tour guide at the Hershey factory, is now a tour guide for the Tweed visitor center.

“If someone had told me five years ago that I’d be standing working at a cannabis factory, I would look at them and say they’re crazy,” said Lawrence, “And look at me now.”

Smiths Falls isn’t the only small town revitalized by marijuana. Trinidad, Durango, and Cortez are three small communities in southern Colorado near the New Mexico border. Like Smiths Falls, the area was experiencing an economic depression, few jobs, and a falling population.

Nick Cordova, a local restaurant and hotel owner in Trinidad, said, “Before marijuana came here, the town was dead. Half the population was gone. Half the town was abandoned. Half the downtown buildings were abandoned and run down. Without weed, half this town wouldn’t be here. Literally.”

Since recreational marijuana sales began in Colorado in 2014, the population of Trinidad has nearly doubled, and these three small towns bring in the most cannabis sales per capita in the state. Last year, Cortez added $250,000 of marijuana taxes to their city budget, while Durango added around $400,000. Trinidad brought in the most tax revenue by far at an estimated $3 million.

Location is a big reason why these towns have thrived from cannabis dollars–a majority of marijuana purchases are made by people who travel from nearby New Mexico, Oklahoma, and Texas.

Cannabis is bringing new opportunities and revenue to towns that were in desperate need of hope.

Canada finalizing rules for marijuana edibles

Canadians have until Feb. 20 to submit feedback to Health Canada before final marijuana edible regulations are released this summer. Canada legalized adult-use cannabis sales in Oct. 2018, but restricted the sale of marijuana edibles, infused beverages, concentrates, and topicals until Oct. 17, 2019.

Unlike regulations in the U.S., the proposed Canadian regulations will limit marijuana edibles and infused beverages to 10 milligrams of THC, regardless of whether it’s sold for medical or recreational use. Some experts in the marijuana industry worry that the low-THC limit will encourage black market sales.

“By limiting the entire packages to 10 milligrams of THC, the regulators will increase the amount of packaging waste associated with edible cannabis products and make legal businesses less competitive against the black-market operators that aren’t restrained on edible potency,” said Jordan Wellington, chief compliance officer at Denver-based Simplifya.

Unlike edibles, the limit for marijuana concentrates and topicals will be significantly higher, allowing up to 1000 milligrams of THC for both medical and recreational use.

Legal marijuana sales reach $6 billion in Colorado

Since legal adult-use sales began in 2014, Colorado has sold $6 billion in medical and recreational marijuana. Recreational cannabis sales in the state have continued to increase, while medical marijuana sales have fallen. According to Marijuana Business Daily, there was a 20% decrease in MMJ sales between 2017-2018, from $416 million to $332 million. Medical marijuana sales reached a market high in 2016, at $445 million.

Recreational sales in Colorado have grown steadily since 2014. Adult-use cannabis sales in 2017 reached $1 billion, while sales in 2018 reached $1.2 billion, an 11% increase. There was a huge leap in cannabis sales between 2016 and 2017 when sales increased by 49%. In 2014, the state sold just $303 million in adult-use cannabis.

European Parliament votes to increase access to medical marijuana

The European Parliament voted in favor of a resolution that would incentivize cannabis research, clinical studies, and access to medical marijuana among European Union countries. The vote follows a recommendation from the World Health Organization (WHO) that cannabis should be rescheduled under international drug treaties.

The resolution is non-binding, meaning that it doesn’t actually change any marijuana laws in EU countries, but it does show increased support for ending cannabis prohibition. In addition, the resolution calls for a commission to “define the conditions required to enable creditable, independent scientific research based on a wide range of material to be conducted into the use of cannabis for medicinal purposes” and to “address the regulatory, financial and cultural barriers” that have prevented cannabis research.

Congress holds cannabis banking hearing

Access to banking has long been an issue in the cannabis industry, with marijuana businesses having little-to-no-access to banking services. For the past six years, Reps. Ed Perlmutter (D-Colorado) and Danny Heck (D-Washington) have filed the “Secure and Fair Enforcement Banking Act” (SAFE) that would eliminate restrictions that prevent insurance and federal financial institutions from working with marijuana businesses. On Wednesday, the SAFE Banking Act received its first hearing in the House Financial Services Committee.

For cannabis companies, lack of access to banking creates challenges that companies in other sectors don’t have to tackle. Cannabis businesses are often forced to run cash-only operations, increasing the risk of crime, and regular business transactions like getting a loan, or paying employees and taxes are much more difficult.

Some credit unions have taken on banking for cannabis companies, but the American Bankers Association told the House Financial Services Committee that, “the majority of financial institutions will not take the legal, regulatory or reputational risk associated with banking cannabis-related businesses without congressional action,” and that access to banking services would make cannabis businesses “safer and better regulated.”

Another year, more legal cannabis! 2018 saw a ton of changes in the cannabis industry and support for legalization is at an all-time high.

These were some of the biggest cannabis stories of 2018:

California Adult-Use Sales

On January 1, recreational marijuana sales officially began in California. The state is home to nearly 40 million people, and the potential cannabis revenue is in the billions. Changing regulations, licensing delays, high taxes, local cannabis bans, and testing snafus caused a less than smooth roll-out of adult-use sales in the state. California’s Bureau of Cannabis Control (BCC), charged with issuing licenses to retailers and distributors, initially issued businesses licenses to eighty-eight stores in 34 cities. As of December, the BCC has issued 547 temporary licenses to recreational marijuana dispensaries, still on the low end to supply the market adequately. Only 70 of California’s 482 cities allows recreational cannabis retail stores, but recent changes in regulations will allow cannabis deliveries throughout the state.

Massachusetts also began adult-use sales this year, with the first recreational dispensaries opening in November.

FDA Approves Cannabis Epilepsy Medication, Pushes to Deschedule CBD

The U.S. Food and Drug Administration (FDA) approved Epidiolex, a cannabis-derived medication used to treat certain forms of epilepsy, in June. Epidiolex, developed by UK-based GW Pharmaceuticals, is made from CBD and contains no THC.

In October, the FDA released a memo advising the U.S. Drug Enforcement Agency (DEA) that CBD has “negligible potential for abuse,” “currently accepted medical use in treatment,” and that any abuse “may lead to limited physical dependence.” As a result, the FDA recommended that the DEA reschedule CBD under its least restrictive category, Schedule 5.

Canada Legalizes Marijuana Nationwide

On October 17, Canada became the second country in the world to legalize adult-use cannabis. Uruguay was the first country to legalize cannabis in 2013. In June, the Senate and House of Commons passed the Cannabis Act, making it legal for adults 18 years-and-older to purchase, possess, and grow cannabis. Canadians will be able to cultivate up to four plants and possess up to 30 grams of cannabis in public. There’s no limit to the amount of cannabis residents can possess in their homes.

State Legalization

November’s mid-term elections resulted in huge wins for adult-use and medical marijuana legalization. Michigan was the first state in the Midwest and the 10th in the country to approve recreational marijuana. The first recreational dispensaries are expected to open in 2019 or 2020.

In Missouri and Utah voters were in favor of medical marijuana, a watershed moment in states that have traditionally opposed marijuana use. Missouri had three medical marijuana initiatives on the ballot, but Amendment 2 was the only one to pass with 65 percent approval. In Utah, Proposition 2 met voter approval, despite opposition from the Mormon Church.

Farm Bill Legalizes Hemp

The 2018 Farm Bill removed industrial hemp from the federal government’s list of controlled substances, legalizing its use as an agricultural product. While the bill didn’t deschedule CBD, it did legalize CBD extraction from hemp. The bill will enable farmers to grow, sell, and export industrial hemp, and opens the door for researchers studying CBD and other cannabinoids. Moving hemp to legal status will make banking and advertising in the industry more accessible, and this could be another step closer to nationwide cannabis legalization.

Researchers at the University of Toronto have completed mapping the cannabis sativa genome and have discovered how CBD and THC evolved in hemp and marijuana.

Hemp and cannabis are both species of the Cannabis sativa family, but while they share 85% of the same proteins, the two strains evolved distinct chemical properties. Hemp produces an abundance of the cannabidiol CBD while cannabis contains more of the psychoactive cannabidiol THC.

By mapping the cannabis genome, researchers discovered that marijuana and hemp evolved into separate species of the same plant through the action of virus-like DNA segments called retroelements. About ten million years ago, one of these virus-like infections spread through the Cannabis sativa species, changing the DNA of the plant and replicating itself into what scientists call “junk DNA.” The mutation changed the chemical compounds the plants created, and selective breeding by humans reinforced these characteristics.

“The researchers believe that gene duplication of the ancestral synthase gene and expanding retroelements drove ancient cannabis to split into chemically distinct types. Humans subsequently selected for plants containing desirable chemistry such as high THC,” according to U of T News.

Other findings in the study included the discovery of the gene responsible for producing a cannabinoid called cannabichromene (CBC), which may also have some psychoactive properties. There are hundreds of cannabinoids, many of which are still unknown. Mapping the cannabis genome means that more cannabinoids can be discovered and studied, leading to “new strains with desired medical properties as well as varieties that can be grown more sustainably, or with increased resistance to diseases and pests.”

Until now, producing cannabis plants that do not produce any THC has been unsuccessful. However the chromosome map “should make it possible to separate them during breeding to grow plants without THC.”

Tim Hughes and researchers at the University of Toronto, Jonathan Page of Aurora Cannabis and the University of British Columbia, and Harm van Bakel of the Icahn School of Medicine at Mount Sinai collaborated on the research. The study was published in the Journal of Genome Research.

A first draft of the study was originally released in 2011; however, it was still incomplete, something the researchers blame on restrictions in cannabis research.

“Mainstream science has still not done enough because of research restrictions,” says Page. “Legalization and looming ease of research regulation really provide for opportunities for more research to be done. And Canada is leading the way.”

On October 17, Canada became the second country in the world to legalize recreational cannabis.

In June, the Senate and House of Commons passed the Cannabis Act, making it legal for adults 18 years-and-older to purchase, possess, and grow cannabis. Canadians will be able to cultivate up to four plants and possess up to 30 grams of cannabis in public. There’s no limit to the amount of cannabis residents can possess in their homes.

Unlike states in the U.S. with legal marijuana, Canada will regulate producers rather than the plant. So far, Canada has licensed 120 cannabis growers. The provinces and territories will be responsible for overseeing distribution.

While the Cannabis Act legalized marijuana nationwide, provinces and territories set their own rules and regulations regarding sales, consumption, and possession.

Some key things to know:

For now, only dried flower, tinctures, capsules, and seeds can be sold in Canada. Marijuana concentrates and edibles aren’t expected to be available for up to a year. Rather than push back the date for legalization, the government decided to delay the roll-out of edibles and concentrates in order to make necessary changes to existing food and drug rules and regulations.

In December 2013, Uruguay became the first country to legalize cannabis nationally.

Canada legalized recreational marijuana on Tuesday, becoming the second country in the world to end cannabis prohibition. The Cannabis Act legalizes marijuana possession, home growing, and adult-use sales. The law will enable adults 18 years-and-older to possess and share up to 30 grams of cannabis in public and to cultivate up to four plants.

Unfortunately, Canadians will have to wait a couple of months until they can legally buy recreational marijuana. Provincial governments will set their own regulations regarding cannabis sales and distribution, and they have set an expected roll out date of October 17th. Initially, legal cannabis sales were hoped to begin July 1.

Independent Senator Tony Dean, who sponsored the bill in the Senate, said, “We have seen in the Senate tonight a historic vote that ends 90 years of prohibition of cannabis in this country, 90 years of needless criminalization, 90 years of a just-say-no approach to drugs that hasn’t worked.”

The Cannabis Act was passed after months of back and forth between the Senate and the House of Commons. The bill was first introduced on April 13, 2017, and passed at the House of Commons in November. The Cannabis Act was finally approved in the Senate with a vote of 52-29.

Uruguay was the first country to legalize weed in December 2013.

Cannabis availability will vary across Canada. In Ontario, only 40 state-run shops will be able to sell recreational weed, while in Alberta, cannabis will be available at more than 200 private retailers. In Newfoundland and Labrador, cannabis will be sold at grocery stores.

During his campaign, Prime Minister Justin Trudeau pledged to legalize cannabis to reduce underage consumption and black market crime.

“It’s been too easy for our kids to get marijuana – and for criminals to reap the profits. Today, we change that. Our plan to legalize & regulate marijuana just passed the Senate,” Trudeau tweeted yesterday.