Nurturing New Growth
Canada gets ready for cannabis 2.0
All eyes remain on Canada as it prepares for the next stage of cannabis legalization—a step that will keep the country firmly at the vanguard of a societal revolution and a new industry exploding with potential.
The introduction of new cannabis products has created unique market opportunities for edibles, beverage, and health, and wellness companies as a wider assortment of cannabis formats become available over time. Cannabis 2.0 will appeal to a much broader consumer base including those cannabis consumption methods.
As in previous years, Deloitte conducted comprehensive market research to understand Canadian consumer sentiment on cannabis edibles and other alternative products arriving with Cannabis 2.0. In addition to our study, Deloitte interviewed key stakeholders in Canada and around the world and leveraged our strategic partnership with Headset to gather data on the US market, allowing insightful and detailed comparisons between Canadian and US markets.
A slow burn towards new growth
Patience a must across the Canadian market as the regulatory framework for edibles and alternative cannabis products evolves in the run-up to October 2019. As the industry settles, Deloitte believes the strong growth potential for legalized edible and alternative cannabis products will drive increased mergers and acquisition activity in the industry. We fully expect Cannabis 2.0 to attract interest from strategic CPG players looking to enter the space, amongst other new entrants.
Cannabis 2.0-What will current, and likely Canadian cannabis consumers expect?
To gain insights into what Canadian cannabis consumers are thinking, Deloitte surveyed 2,000 Canadian adults in early 2019. We then compared the data with information provided by Headset to identify similarities and differences between US and Canadian markets
What have we learned from Cannabis 1.0?
- Each province has progressed at its own pace, leading to uneven growth across the country creating the need for strong business fundamentals.
- M&A has become a key lever for growth. Thorough due diligence, including integrity due diligence, is a critical part of any M&A strategy, and should not be overlooked.
- As other countries legalize or decriminalize recreational and medical cannabis to varying degrees, Canadian firms must quickly move forward to secure their place at the forefront of the global industry.
- The globalization of cannabis has caught on around the world as new players enter the various cannabis categories.
- Consumer experience will continue to be a key differentiator.
- Insight-driven organizations will lead the way
- In an industry where companies cannot rely on traditional branding or marketing to reach consumers, data and analytics to discern key insights will be vital in making faster, smarter business decisions.