Cannabis 2.0 products have been legal in Canada since October 17, 2019. However, these cannabis-infused derivative products won’t appear in Canada’s physical or online stores until mid-December. This time gap between legalization and commercial entry stems from the requirement for licensed cannabis players to give a 60-day notice to Health Canada. This notice would inform the regulatory agency about the companies’ intent to sell new cannabis derivative products.
So, there are still a few more days to go before we see Cannabis 2.0 products in the marketplace. As reported by MarketWatch, Mackie Research Capital Corp. analyst Greg McLeish expects the recent earnings season to prove to be the worst possible one for the cannabis sector. The analyst expects better visibility in Cannabis 2.0 adoption in the fourth quarter of 2019.
Further, McLeish expects Cannabis 2.0 to benefit from an existing customer base. However, he highlighted the need for companies to differentiate or specialize in certain areas. He noted that this was essential because provinces in Canada would most likely prefer to purchase from a few licensed cannabis producers to leverage economies of scale.
Canopy Growth unveils its Cannabis 2.0 edibles and beverages portfolio
On November 28, Canopy Growth (CGC) disclosed its Cannabis 2.0 product portfolio. These products include cannabis-infused chocolates, vape pens, vape cartridges, and beverages using Distilled Cannabis technology.
In October 2018, CGC partnered with Hummingbird Chocolate Maker to manufacture cannabis-infused chocolates. According to the November 28 press release, the state-of-the-art chocolate factory is now fully operational.
CGC is manufacturing bean-to-bar craft cannabis-infused chocolates under three distinct brands—Tokyo Smoke, Tweed, and Bean & Bud Craft Cannabis Company. All three chocolates come with different flavor profiles and varying percentages of THC. Only Bean & Bud’s brand does not contain CBD. The company plans to start shipping these brands from its regional distribution center in Smiths Falls, Ontario, in the coming weeks.
According to the November 28 press release, Canopy Growth has also developed a proprietary process of distilling whole flower cannabis into a clear liquid called Distilled Cannabis. This liquid is used as an active ingredient to make THC- and CBD-infused beverages.
On November 22, the company secured an operating and storage license for its 150,000-square-foot beverage facility located in Smiths Falls. On November 25, the company started the manufacturing of multiple beverages involving the Distilled Cannabis concept at this facility.
CGC is offering RTD (ready-to-drink) beverages with flavors mimicking Tweed’s three cannabis strains. The company is also targeting the wellness beverages segment with its cannabis-infused Quatreau drinks.
The company is developing beverages of various sizes, onset times, potencies, and flavors to appeal to a larger consumer base. Finally, CGC is offering Tweed Distilled Cannabis as a 150 ml bottle. Consumers can enjoy this beverage as is or mixed with non-alcoholic beverages.
CGC preparing to launch vape products in 2020
According to the November 28 press release, CGC announced the receipt of UL 8139 safety certification for Cannabis 2.0 vape devices, which are scheduled to be launched in the coming days. The company plans to complete this certification for all of its vape products.
CGC plans to launch vape cartridges and rechargeable batteries in Canada in January 2020. Thereafter, the company would launch advanced vape devices and batteries in early 2020.
MKM analyst Bill Kirk wants to know more about CGC’s Cannabis 2.0 strategy
On November 29, as reported by MarketWatch, MKM analyst Bill Kirk claimed that CGC would not become profitable on a per-share basis by fiscal 2022. The analyst had several questions that can help clarify CGC’s growth strategy and Cannabis 2.0 strategy.
Kirk wanted to know about the excess labor that CGC will deploy on Cannabis 2.0 products compared to the remaining portfolio. He also wondered why its peers have not yet managed to develop a THC-infused Cannabis 2.0 beverage. He also asked whether CGC has changed its vape segment strategy in the last six months.
Kirk inquired about CGC’s ability to meet the cannabis oil demand for the derivative products, owing to low oil inventory levels. Finally, he asked CGC about factors that play a major role in switching people from illicit channels to regulated players.