CANNABIS FOR DINNER
Will we soon see marijuana Coronas in supermarket aisles? Constellation Brands, the distributor of the famous beer brand, is seriously considering it. In October 2017, the US company announced it acquired a 9.9% share of Canopy Growth, Canada’s leading hemp producer, for 180 million Swiss francs. The goal is to “collaborate in developing and selling drinks made with cannabis,” said Bruce Linton, CEO of Canopy.
As several countries have legalised the sale of cannabis for recreational use, companies have now started to consider developing cannabis-based products. “I think that several industries will see major changes,” said Christian Ben Lakhdar, economics professor at University of Lille 2. “In the US states where marijuana is already legal, it’s not just sold in the form of dried flowers. It can also be found in cannabis-based products. In these states we’re seeing drinks made with marijuana, as well as foods, creams and a whole host of other things.”
Head to Colorado, the first US state to legalise recreational cannabis in 2014, to have a look at the creativity of this burgeoning industry. In shop aisles, next to the traditional small packets of marijuana are related products: cannabis sweets, drinks, cookies, chocolates, balms, sleep aids, pain relief pills, etc.
“As more countries legalise marijuana, multinationals will become more interested in this business”
Christian Ben Lakhdar, economics professor at University of Lille 2
Until recently, these products were only made by small local businesses, such as the Dixie brand for example, which makes elixirs, lemonades and other sweets in Colorado and Nevada. But the legalisation of recreational marijuana in Canada will be a game changer, as seen by the collaboration between Canopy and Constellation. “As more countries legalise marijuana, multinationals will become more interested in this business,” said Ben Lakhdar.
That’s because the market will be huge. According to a Deloitte study published in October 2016, cannabis- based products could represent an annual market of $14 billion CAD in Canada, or almost double the sales of pure cannabis, estimated at $8 billion CAD.
“Marijuana will become a common ingredient and will be marketed as a healthy superfood”
Sylvain Charlebois, dean of the Faculty of Management at Dalhousie University in Halifax
After tobacco, the first industry involved will likely be the alcoholic beverages sector, as the players are well-versed in the constraints that come with marketing a drug. When asked about the subject in February 2018, Alexandre Ricard didn’t hide behind false pretences: “We’re watching this very closely,” said the CEO of Pernod Ricard, during an interview with Bloomberg TV. “The whole industry is watching this closely.”
This promising market is also enticing the agro-food industry. “All the companies I meet are very interested in developing cannabis-based food products,” said Sylvain Charlebois, dean of the Faculty of Management and professor of food policy and distribution at Dalhousie University in Halifax. “It’s very possible that 5–7% of food products sold in Canada over the next 10 years will contain cannabis, including readyto- eat food. Marijuana will become a common ingredient and will be marketed as a healthy superfood.”
But if it isn’t regulated, this development could lead to health concerns. According to a July 2017 study published in JAMA Pediatrics, the number of children admitted to hospitals for accidentally ingesting cannabis went up 150% in Colorado since 2014, the year recreational use was legalised. According to the authors, in the most serious cases, children have had to be intubated because of respiratory distress.
“In Colorado, cannabis gummy bears (gelatin sweets shaped like bears) quickly became one of the most popular products, which led to accidents with children,” said Charlebois. “But ever since, Colorado tightened up regulations and candy shaped like characters was made illegal. The state also required manufacturers to use specific, child-safe packaging so that children couldn’t access the product.”
With Colorado’s example in mind, Canada decided it was necessary... to wait. Edible products made with marijuana will only be legalised on a federal level one year after the legalisation of dried cannabis, or in July 2019. “For investors, the real question is: when should they get in on the market?” said Ben Lakhdar. “When these products are legalised, or beforehand? The risk is if the law will end up being stricter than expected in Canada. But also if the global trend towards cannabis legalisation in more countries ends.” Constellation Brands and Canopy Growth already announced that their cannabis-based drinks will only be sold where they are fully legal in an entire country; which cancels out the United States and pushes any potential sales in Canada to July 2019.
But it is certain that these drinks will arrive in Canadian shops, according to Charlebois, as legalisation has become “inevitable”: “Many people buy dried marijuana and make food with it themselves. The problem is that many don’t know how to cook with it, which leads to intoxication. It’s better to have manufactured products that have the correct amount and are well-labelled.”
In the cosmetics industry, the dangers seem more moderate. Because of its antioxidant, anti-inflammatory and pain relief effects, several experts believe that cannabis will be the next leading ingredient in beauty and fitness products. Actress Whoopi Goldberg is on board; she launched her own beauty line named Whoopi & Maya that includes pomades and other products infused with cannabis. She joined the growing market of brands such as Crave Skincare and Cannabis Cosmetics.
But in all industries, weed’s’ scandalous reputation could keep multinationals from participating. “Not all companies will be part of the industry,” said Charlebois, “because it could be disastrous to be associated with an intoxication incident. Furthermore, many consumers are still uncomfortable with cannabis. Each company will have its own approach, based on its brand image.”