MJBizMag February 2021 - 14

Trends&HotTopics | Matt Lamers
Will Canada Bend the Rules
for Cannabis Beverages?
A
chorus of complaining has come
from Canadian boardrooms in
recent months, with executives
bemoaning strict rules the country
applies to cannabis beverages.
The rules are to blame for the lousy
performance of the category, some
companies say. Without a doubt, the
regulations are strict-and, in some
cases, absurd.
For instance, Canada allows
individuals to carry up to 30 grams of
dried cannabis-or the equivalent in
different forms. For cannabis-infused
beverages, that means consumers
may purchase only 2.1 liters of product
at any one time.
That does not make any sense and
will likely be changed at some point.
But would increasing the effective
purchase limit be enough to breathe
life into the struggling category?
And would Canadian authorities
consider making those changes?
To answer the latter question, take
a look at why Canada opted to legalize
cannabis in the first place.
Health Canada says, " The (Cannabis)
Act implements a new, comprehensive
public health approach that will be
more effective in protecting youth and
keeping profits out of the pockets of
criminals and organized crime. "
This statement makes no mention
of the job creation, tax revenue or
any other financial considerations
often cited as reasons for legalization.
Rather, eliminating the illicit market
was central to Canada's decision to
legalize cannabis.
What does that have to do with
beverages?
There are almost no cannabis beverages
in the illicit market today, while
products such as dried bud, infused
edibles and vapes remain prolific.
No Focus on Beverages
While Canadian regulators remain
focused on the transitioning sales
of popular illicit products over to the
legal market, they are not focused on
creating and regulating a brand-new
cannabis category.
So what sort of regulatory changes
would be required for cannabis-infused
beverages to have any significant
success in Canada?
The truth is, no one knows, because
such a market does not yet exist anywhere
in the world.
High-THC beverages have not
fared much better in places such as
Colorado, which does not have the
strict regulatory burden Canadian
producers bemoan. And that's
precisely why one of the most
successful brewers in Canada pulled
out of its cannabis venture.
" When we got to the spot where we
said, 'Let's make sure the business
case works over an extended period
of time,' it actually didn't. The money
wasn't there, " George Croft, CEO of
Ontario-based Waterloo Brewing, told
Marijuana Business Daily last year.
That answer will be tough to swallow
for companies that already invested
heavily in bottling plants and whose
executives hold on to hope that the
niche category will find a way forward.
So, let's speculate about what would
have to happen for these beverages to
be successful:
* Technological advances make
the onset time of cannabis
beverages similar to that
of alcohol.
* Sales of cannabis beverages outside
legal cannabis stores, such as
social consumption establishments
and regular bars, alongside alcohol.
* Nationwide access to quick and
accurate tests for cannabis
impairment.
* Amendment to Canada's lame
equivalency rate for beverages.
That level of reform would require
action from almost all levels of
government.
Canada's federal cannabis regulator
conducted consultations regarding
the equivalency rate. It remains to be
seen what changes, if any, regulators
will make.
Matt Lamers is the international
editor at Marijuana Business Daily.
You can reach him at matt.lamers@
mjbizdaily.com.
14 Marijuana Business Magazine | February 2021

MJBizMag February 2021

Table of Contents for the Digital Edition of MJBizMag February 2021

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