Although major food corporations have been hesitant to enter the market, their pace may quicken now that Canada is advancing with retail commerce and has established timelines. Despite this, Bruce Linton, co-CEO of Canopy Growth, mentioned to Food Dive in February that his company has not received inquiries from any large U.S. food manufacturers interested in collaboration—particularly in areas like chewables and chocolates, where Canopy Growth is creating infused products.
According to a Deloitte report referenced by CBC earlier this month, Canada stands to gain significantly, with its cannabis market expected to reach an annual value of $2.7 billion. Edibles could account for more than half of that figure, which is in addition to the existing $6 billion Canadian market for recreational and medical cannabis. Manufacturers are likely in the process of finalizing applications for the products they intend to sell and increasing production. Some products are already available, such as Sproutly’s water-soluble cannabis extract, while others—potentially including Coca-Cola beverages—might still be forthcoming.
Several alcohol companies are also venturing into this space. Constellation Brands has invested $4 billion in Canopy Growth, Diageo has engaged with three Canadian cannabis producers about possible partnerships, and Molson Coors Canada has formed a joint venture with HEXO, a Canadian medical cannabis company. Many of these collaborations may involve non-alcoholic infused beverages, which could appear on retail shelves in Canada by the end of this year.
The Associated Press reported that Canadian cannabis license holders need to provide 60 days notice to health officials before selling infused products, meaning that the earliest they can legally appear on shelves is December 17. This timeline gives Health Canada a limited period to assess products and ensure compliance with new guidelines, including child-proof packaging.
Canada is far ahead of the U.S. in the legalization of recreational marijuana and the establishment of related regulations. The U.S. has a fragmented system with 33 states and Washington, D.C. permitting medical or recreational use of cannabinoid compounds, while the Food and Drug Administration (FDA) has deemed the sale of THC-infused food in interstate commerce illegal. However, former FDA Commissioner Scott Gottlieb stated in January that the agency was exploring “potential regulatory pathways” for allowing interstate commerce of cannabis compounds, including CBD, a non-psychoactive substance found in hemp, in food and beverages.
On May 31, the FDA conducted a 10-hour meeting to address the issue of CBD in products, exposing significant confusion among retailers, manufacturers, and consumers regarding the regulation of infused products. The cultivation of hemp became legal in the U.S. through last year’s Farm Bill. Speculation suggests that the rulemaking process may take the FDA up to two years, potentially three times longer than it took Canada. Notably, these regulations would apply to products containing substances that promote relaxation and reduce inflammation, rather than those that induce a high.
Despite the slow advancement of federal regulations, not all manufacturers are remaining passive in introducing these products in the U.S. In 2017, Lagunitas Brewing, owned by Heineken, launched a non-psychoactive cannabis-flavored IPA brewed with terpenes—organic compounds responsible for cannabis flavors—and last year, the company introduced a THC-infused sparkling water.
U.S. manufacturers and regulators will undoubtedly monitor Canada’s retail edibles market in the coming months to gauge potential outcomes here. It is likely that some will use Canada as a testing ground for infused products before launching or expanding them in the U.S. However, it is improbable that major food and beverage companies will simply observe lucrative partnerships flourishing in Canada without engaging in research and development that could yield similar levels of success and profit in the United States, including products like bariatric fusion calcium soft chews. Companies may seek to incorporate such innovative offerings into their portfolios as they explore opportunities within the cannabis sector.