Canada legalized cannabis edibles for the adult-use market Oct. 17, 2019, exactly one year after the date the country first legalized recreational cannabis consumption. The first approved products went on sale after a 60-day waiting period between late December 2019 and mid-January 2020 in British Columbia, Saskatchewan, Manitoba, Ontario, Alberta and Quebec.
Quebec banned the sale of any edibles of the dessert variety, presumably to eliminate their appeal to under-21 consumers. As of Jan. 8, 2020, the only legal edible product in Quebec is CBD-infused tea bags, although there are hopes of THC-infused drinkable products and cooking oil in the works.
Brands and doses
Many Canadian cannabis consumers—and likely potential consumers—either don’t know or don’t care what brands and/or dosages exist today. In fact, about one-third of those surveyed by Brightfield Group in late 2019 were unsure which brands they purchase, and about half were unsure of what dosage they prefer. For this reason, brand loyalty and purchase consistency across product formats and ratios remain quite limited, and brands have plenty of space to grow and gain traction on these fronts, including through:
- Increased exposure and familiarity: Because budtenders and retail stores are a primary source of information and exposure for a great deal of consumers in a restrictive regulatory environment, many licensed producers (LPs) are driving hard on this element, seeking to educate distributors and vendors, revisiting marketing materials, and more to educate current and potential future consumers about products, quality, safety, etc.
- Creativity: Some LPs are looking to things as simple as font design and package coloring (e.g., dosist, Chowie Wowie) to stand out. They’re also partnering with celebrities or influencers to leverage their personas and social media followings. Others are setting up vertically integrated supply chains that allow brands to promote and highlight their own products within proprietary retail outlets (e.g., “staff picks,” in-store advertising).
Canadian Cannabis consumers overwhelmingly prefer brick-and-mortar retail to online purchasing; today, less than 10% of adult-use sales are taking place through online channels despite the dearth of retail outlets. As provincial restrictions start to loosen around the country, we can expect to see an even greater shift from online sales to dispensary sales–especially in Ontario and British Columbia, two major population hubs that have historically stymied private retail but are opening up.
Adult-use online sales plummeted from nearly $17 million and from more than 40% of all transactions in October 2018 to less than 6% of total sales by September 2019. We expect online sales to rebound near the norm seen in other markets as additional retail establishments relieve supply pressure, 2.0 products continue to be released and consumers move along the education curve.
Andy Seeger is the cannabis research manager for Brightfield Group, where he performs quantitative and qualitative analyses of the U.S. medical and adult-use markets.
In this month’s cover story, Jim Belushi emphasizes that people outside of the cannabis industry don’t fully appreciate how difficult cultivation and turning a profit can be. The actor, comedian and now cannabis cultivator says aphids, mites and ground squirrels are just a few things that keep him up at night.
This issue also includes a column from Leif Abel, co-founder of Greatland Ganja and Cannabis Business Times Editorial and Conference Advisory Board Member, who says after four years growing cannabis on Alaska’s Kenai Peninsula, what he’s learned is, “There is no less risk now, no less uncertainty. It’s just a different set of more complex challenges.”
Operating in an industry with many highs and lows requires a thick skin but more importantly, a powerful sense of purpose. For many cultivators, remembering their “why” is how they power through the obstacles. Belushi clearly outlines his “why” for joining—and staying—in cannabis despite thin margins. Abel has become comfortable with expecting the unexpected, and what helps him rest easy is his team, who, he says, "has inspired me further and given me a greater purpose."
That sense of purpose can slowly deflate with each setback, whether it be lower-than-expected yields, employee turnover or—an aphid outbreak, which is why constantly reflecting on and “refilling” that purpose is important. Reading stories from peers with similar challenges and hearing their solutions can help rejuvenate that sense of purpose. And being in the same room as those who share that industry passion and are willing to discuss what they’ve learned can be even more powerful.
To that end, Belushi, Abel and more than 70 other industry leaders, university researchers and technical experts will gather and speak during this year’s Cannabis Conference, April 21-23, in the Paris Las Vegas Hotel & Casino. Many of the expert contributors who appear in this issue will lead sessions as well, including Dr. Brian Whipker of North Carolina State University, who regularly shares the latest results of his team’s cannabis research; consultant Robert Eddy, who this month explains how digital phenotyping can help growers predict and improve yields and more; and Sjoerd Broeks of The Pharm, who is a cannabis breeding, cultivation and greenhouse design aficionado and will speak on all three topics this spring.
Each issue of Cannabis Business Times and each annual Cannabis Conference demonstrates our purpose—to provide the highest level of educational content to those working in cannabis cultivation so that they can in turn provide the highest quality and safest product to patients and consumers, as well as be successful in their operations. Research is a big part of that, and this issue also includes CBT’s latest exclusive report, “State of the Growing Environment,” which explores how cultivators manage the many variables of climate control. It also includes a column from the Resource Innovation Institute, a nonprofit that has developed HVAC and lighting best practices guides for cannabis cultivation and controlled environment agriculture.
Whether in person or on the page, sharing these stories, the latest technologies and research is how we all become better and how we remember that we’re in this together.
In about 25,000 square feet of indoor growing area outfitted with LED (light-emitting diode) lights, Buckeye Relief in Eastlake, Ohio, cultivates medical cannabis for dispensaries in the Buckeye State.
The operation installed vertical grow racks but currently cultivates on one level, as it aims to expand along with Ohio’s medical-only market, says Jeremy Shechter, the company’s director of cultivation. (Ohio’s program launched in January 2019.)
“As the Ohio market develops—which we expect it to within the next probably 10 to 15 months—we have all of the electricity and all of the ducting and all the irrigation channels,” Shechter says.
Arguably the No. 1 benefit of cultivating cannabis under LED lights is that plants can grow on two levels without the hazard of heat stress, he says. Already, on its single level, Buckeye Relief has cultivated crops that have touched the lights and not burned. “The ability to grow vertical is huge,” Shechter says.
In the interim, the facility follows these lighting practices to cultivate quality cannabis indoors.
1. Install lights with 0%-100% dimming capability.
Cultivators using LED lights must be able to dim the lights by any percentage when their plants are stressed or when they need to make a foliar or pesticide application, Shechter says. This allows them to provide optimal light levels without wasting energy.
Not all LED dimming is the same, Shechter adds, so cultivators must connect “source” equipment, which provides a signal that gets modulated, to “sink” equipment, which receives a signal. For example, they can connect a sink fixture to a source control.
2. Run the grow a little hot.
Buckeye Relief keeps its grow room at 79 to 80 degrees Fahrenheit, 3 degrees above its leaf temperature of 75 to 77 degrees Fahrenheit, Shechter says.
“Just a simple rule of thumb that we've found is that leaf temperatures tend to be lower in LED rooms compared to HID [high-intensity discharge]rooms,” he says. “The difference between the air temperature and the leaf temperature is greater in LED rooms because you don't have that radiation from the lights heating up the leaves.”
Temperature directly affects yield, but cultivators should also pay attention to leaf temperature so they can avoid condensation on leaves. “If the temperature of the leaf drops below the dew point of the room, then you can have condensation on the leaf, and that obviously opens the plant up to pathogens, fungal issues, stuff like that,” Shechter says.
3. Integrate all environmental controls on a single interface.
Some cultivators piecemeal their environmental controls, with a thermostat here and CO2 monitors there. “People really like to cut costs by not integrating all of their environmental controls together on a single interface,” Shechter says. “I think that's a mistake.”
Environmental controls affect each other, so cultivators should connect them, Shechter says. By doing this, they can graph their data and track it over time.
Patrick Williams is a senior editor for Cannabis Business Times and Cannabis Dispensary.
“It would be very sad to me if a lack of providers becomes a barrier for patients.”
^ Dr. Marc Babitz, deputy director of the Utah Department of Health and a practicing physician, said on Feb. 10 that he is concerned about whether the program will have enough doctors registered to recommend medical cannabis to patients who need it. Registered patients began purchasing medical cannabis products March 1. Source: KJZZ.com
“There are a lot of micro-producers waiting for Health Canada approval.”
^ John Carle, executive director of the Alberta Cannabis Council, said more micro and craft producers would be welcome in the Canadian market, as the smaller operations would appeal “to people who still go to the black market.” Source: Calgary Herald
“Spent plastic tubes used to hold cannabis cigarettes, vaporizer cartridges containing excess cannabis, and vaporizer batteries are polluting the environment without product controls.”
^ On Jan. 31, the New York State Bar Association delivered a report from its committee on cannabis law that made various recommendations on how to legislate medical or adult-use cannabis. One of the recommendations was to enact legislation that took into consideration the environmental impacts of cannabis legalization, including cannabis product packaging. Source: New York State Bar Association
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