If you’re hoping to buy a next-generation cannabis product — like infused beer or gummy bears — as a gift for the holiday season, you may be out of luck.
It will be legal to buy derivative cannabis products — often referred to in the industry as “cannabis 2.0” — on Tuesday, but three of Canada’s largest provinces won’t have a single one available until January.
That’s because the long-awaited expansion of sales for cannabis derivatives have gone through a gauntlet of regulatory checkpoints and cumbersome logistics, dashing hopes of last-minute gift purchases with its late arrival.
“Frankly, we would have preferred to have it [up and running] six weeks ago,” said Harrison Stoker, a vice-president with Donnelly Group, the parent company of retailer Hobo Recreational Cannabis.
Stoker says staff at Hobo, which owns stores in Ontario and B.C., still need time to understand the new products.
“We would have preferred to position it for the holidays with a little more time,” he said.
Delays, stricter regulations
Ontario, Quebec and Alberta run their own distribution systems, rather than allowing producers to ship directly to retailers, and regulators in all three provinces have said no derivative products will be available before mid-to-late January.
The first retailers in Ontario are scheduled to receive the new products on Jan. 6, after they are tested for quality, according to a spokesperson for the Ontario Cannabis Store, the province’s only legal wholesaler.
In Quebec, the issue is more complicated, since the province approved stricter regulations in late November which, for example, banned some kinds of candies and chocolate that are legal elsewhere in the country.
“We just want to give the industry time to adapt these new regulations,” said Fabrice Giguère with provincial retailer Société québécoise du cannabis (SQDC). “It’s possible that we won’t have any products on Jan. 1.”
Alberta is similarly aiming for a mid-January launch, according to a spokesperson with the Alberta Gaming and Liquor Commission.
‘We’ve been handcuffed’
The industry has been counting on this next phase of legalization to bring in customers who might be reluctant to smoke pot.
“I think it’s going to bring a whole new demographic out of the woodwork,” said Stoker, adding it’s been hard to compete with the online black market and illegal stores, both of which offer a big selection of cannabis derivatives.
“I think that bringing on these new formats gives the legal format a fighting chance … we’ve been handcuffed this year.”
One major pot producer, Quebec-based Hexo Corp., downgraded its 2020 sales forecast, with CEO Sebastien St-Louis blaming the slow rollout in part on “regulatory uncertainty … and jurisdictional decisions” limiting the availability of cannabis derivatives.
But the head of another producer, Canopy Growth Corp. of Smith Falls, Ont., is putting a positive spin on the regulatory delays.
President Rade Kovacevic said the slow rollout helped with buy-in for legalization and “allowed Canadians as a society to say that legalization was a good idea. We’re going to stick with it.”
The company hopes that in provinces that have direct producer-to-retail sales, such as Saskatchewan, the products can start rolling out before Christmas.
Another large producer, Alberta-based Aurora Cannabis, says it’s pulling out all the stops to make sure that happens.
“Our teams are having sleepover parties at the office to be ready to receive and process orders for shipment when they start to come in at 12:01,” on Monday, when middlemen can place orders, said spokesperson Laura Gallant.
“[It’s a] nice way to have some fun with this industry milestone, given that we are ready to go right out of the gate,” she said, adding that “availability across provinces will vary.”
Stoker said Hobo’s stores in British Columbia have been told by some licensed producers they have worked out a distribution system fast enough to arrive on store shelves before Christmas Day.
“Obviously having it in time for all the last minute Christmas shoppers is pretty great,” he said.