Companies ramping up for the highly anticipated cannabis edibles market will find some products nixed by government regulations, with Quebec banning cannabis chocolates, jujubes and other sweets.
Less than five months before edibles are expected to hit store shelves, Quebec said on Wednesday that it would ban cannabis products that could appeal to minors, such as cannabis candies, confections and desserts, including chocolate. The move could keep some food and beverage companies from selling their products in the province.
Cannabis companies eyeing the edibles market – which Deloitte values at about $2.7-billion a year – have already started preparing to stock shelves with desserts and candies. Last year, cannabis company Newstrike Brands Ltd. struck a deal with specialty foods company Neal Brothers Brands Inc. to make cannabis-infused chocolate, confectionery and salty snacks. And Canopy Growth Corp., one of Canada’s largest licensed producers, partnered with boutique company Hummingbird Chocolate to produce cannabis-infused chocolate.
In the leadup to legalizing edibles, the federal government said in June that it will not allow the sale of food and beverages that could appeal to young people but would assess products on a case-by-case basis. Whether an edible cannabis product is reasonably considered to be appealing to children would depend on various factors including its shape, colour, flavour, scent and how it is packaged, a federal government official said last month.
Even after Ottawa announced tighter regulations, enthusiasm for the food and beverage opportunity didn’t wane. When Canopy disclosed a fourth-quarter net loss that was almost four times analysts’ expectations, now-former Canopy chief executive Bruce Linton pointed to higher-margin infused foods, drinks and vape products to boost profits.
“[Edibles] is what we’ve been built for. It is the whole point of this exercise, to create things that are a bit more complicated and have a much more desirable consumption pattern,” Mr. Linton told The Globe and Mail in an interview in June. “I think once these new products and distribution for them exists, I think that multiplies the sector and we are going to have the biggest market share. It is the next big wave.”
Ottawa will legalize edible products on Oct. 17, but it will take at least another 60 days for products to hit the shelves.
Quebec maintains that federal measures to regulate the new products will not allow the province to “achieve its public-health and safety objectives." The provincial government says more needs to be done to reduce the appeal of cannabis to young people and the risk of accidental intoxication.
Solid products containing cannabis will not be allowed to have levels of tetrahydrocannabinol – the high-inducing compound known as THC – greater than five milligrams a unit or 10 milligrams a package. For liquids, the limit will be five milligrams a package.
Among the other measures introduced by Quebec is the prohibition of additives intended to modify the smell, flavour or colour of cannabis products.
Cannabis for topical use will not be allowed for sale in Quebec “for the moment,” the government said.
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