preparing for sales. Once the regulations are finalized, companies are required to give the government 60 days’ notice to begin selling edible products, although some (I’d be shocked if not all) are already preparing for this in advance of October 17th. The proposed legislation is summarized here: Proposed Regulations.
Recent news to prospective investors that want to dabble in the edibles space will be interested to note companies that are making recent acquisitions to either expand its product portfolio or enter it. Companies such as Nutritional High (CSE: EAT; OTCQB: SPLIF), who are already selling its range of edible products in legal states, recently announced a letter of intent to purchase controlling interest in Tres Ojos Naturals LLC, who produce cannabis-infused fruit snacks in California. Others such as Zenabis Global (TSXV: ZENA) are augmenting their existing recreational and medical cannabis products with consumer products, acquiring 51% of Hillsboro Corporation, who produce “True Buch” kombucha tea beverages. The plan is to create a CBD or THC based kombucha tea product in the near future.
Cannabis has become a disruptor for both the alcohol and tobacco industries and we’ve seen recently major players from both entering the cannabis space, with the likes of Constellation Brands (NYSE: STZ) sizable investment in Canopy Growth Corporation (TSE:WEED; NYSE:CGC; FRA:11L1) and Altria Group (NYSE: MO) big investment (about 45% stake) in Cronos Group (TSX: CRON; NASDAQ: CRON; FRA: P8Y), to name a few. So could Cannabis be a disruptor in the food industry? The food industry is a $200 billion sector, after all. With many big players even in Canada such as Maple Leaf Foods, McCain Foods, Metro Inc, George Weston, Chapman’s, M&M Food Market as some familiar names among the 1139 companies listed in the Canadian Food and Grocery Industry Guide. One challenge is food safety issues, and we’ve seen many instances where food companies are hit with product recalls that have cause irreparable damage to a company’s business. It remains to be seen whether some take a chance on cannabis-infused food products. The Toronto Star article entitled “What surprising food and drink trends to expect in 2019” reports that CBD will appear in a wider range of food products such as salad dressings and beverages. I would not doubt it at all that there are some looking to expand its core business and looking for new avenues for growth to take a chance on joining the fray, even right now!
Advances in technology is taking the cannabis taste out of edibles and functional drinks as well. Some with proprietary technology, and others like Lexaria Bioscience Corp (CSE: LXX; OTCQX: LXRP) offering formulations that not only increase the speed of absorption, but that mask the taste of cannabis. However, the proposed limit of 10 milligrams per package of edibles could attract more home bakers too as they can cook up stronger edibles at home with relative ease. If you’re careful with what you eat and have an apt for learning and experimenting like I do, cooking with cannabis can be a great hobby, and save you money from buying retail edibles. If you have a propensity to consume stronger than 10 milligram strength THC, cooking at home will be something to consider. And with potential delays being reported, it might be time to invite your neighbours over for a bake off!
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