As the cannabis industry matures, the cannabis-infused beverage segment is expected to offer fierce competition to other types of cannabis products. Market experts project that the segment will grow at a compound annual growth rate of 16% to achieve a valuation of $2 billion by 2026.
Canada, which first allowed the production and sale of cannabis beverages in late 2019, has proposed a policy change that would allow consumers to purchase more cannabis beverages at one time. The federal government has asked for public comments regarding a proposed change in cannabis regulation that would increase the number of cannabis beverages consumers are allowed to purchase at a time eightfold.
At the moment, the country’s equivalency rates allow individuals to possess up to 30 grams of cannabis flower but only about two liters of marijuana-infused beverages in public. According to Health Canada, the equivalency rates place limits on the possession and sale of cannabis-infused beverages that other classes of cannabis products don’t have to deal with.
The proposal plans to increase the possession limit for marijuana beverages from 2.1 liters to roughly 17 liters. This will increase the quantity of marijuana beverage equivalent to one gram of dried cannabis flower. However, the proposed rules will not change the country’s cap of 10 mg of THC per container.
The proposed rules have been met with praise by large producers involved in the industry that have spent the past couple of years talking about cannabis’s potential medical benefits.
For example, the Cannabis Council of Canada stated that the proposed changes were timely and would eliminate the error caused by the country’s equivalency rates. The council also noted that the changes would also allow adult Canadians to indulge in a wider variety of products. The business group’s head, George Smitherman, clarified that the proposed rules originated from consultations launched back in December 2020 and were not part of a mandatory review of the original cannabis legislation passed in 2018.
However, not everyone is happy with the proposed changes. Quanta Consulting president Mitchell Osak stated that the proposed rule changes were underwhelming and wouldn’t affect most of the market. Despite this, it is a small step in the right direction, especially since these beverages barely make up 2% of the country’s overall marijuana market. Furthermore, cannabis beverage sales in 2021 paled in comparison to industry experts’ projections.
Figures show that between January and September 2021, only $39.4 million worth of cannabis beverages were sold in the market, which is quite small, especially if one compares this to the $500 million market projection made by Deloitte.
As the rules around cannabis beverage sales continue to evolve, companies such as Flora Growth Corp. (NASDAQ: FLGC) could have a better chance to attract new customers who would like the social aspects of drinking without the adverse effects, including a hangover.
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