Canada Prepares for Legalization of Edibles with Initial Guidelines

A big segment of the cannabis industry still remains illegal in Canada: edibles. Although it’s expected that within a year of recreational pot legalization we’ll see edibles get legalized, that is nearly 10 months away from now.

The good news is that gives the government time to sort out the rules and expectations for when edibles hit the shelves. Health Canada has already made some preliminary recommendations but it is looking to get feedback from the public over the new two months.

Initial guidelines show a focus on safety

Like with the recreational market that’s already been legalized, the focus for the government has remained on keeping cannabis out of the hands of children. Another thing that will remain common is packaging, which will be plain and with significant warning labels.

A lot of the other requirements are similar to what you would find with other food products, which includes having best-before dates and nutritional information made available. While flavours can be added, they cannot appeal to children. Extracts cannot have sweeteners and sugars added to them, and while caffeine that occurs naturally is okay, it cannot be used as an additive.

This is just a first draft, however, and the rules could look very different by the time the public has its say, as there’s still time for the government to iron everything out. When pot was rolled out for recreational use, there were still a lot of question marks left unanswered, with a big one being around drug testing and how impaired driving would be treated. Even now, it’s still unclear if that has issue has been solved.

Edibles might run into similar challenges around legalization, but it’s likely that the legislation will push through anyway.

Why there’s a lot of excitement for the segment

Cannabis gummy bears and chocolates are a big part of the reason the industry has been thriving in the U.S., and it’s likely to have similar success in Canada. That’s also why we’ve seen investors get excited about beverage makers linking up with cannabis companies with the ultimate aim of producing a desirable cannabis-infused drink. Beverages in particular are still a bit of an untapped sub-segment of the industry that could see a lot of growth.

With hemp-derived CBD now becoming legal in the U.S., it could be the start of a new wave of drinks hitting store shelves. Alkaline Water Company Inc (TSXV:WTER)(NASDAQ:WTER) and New Age Beverages Corp (NASDAQ:NBEV) are examples of two stocks that could see a lot of growth in the years to come as they look to begin offering water containing cannabidiol, which could be the next big health trend. They’ll have a big advantage over their peers that may still be a long ways away from getting any products out to market.

However, whether it’s water or other non-alcoholic beverages that prove to be the big hit with customers is something we likely won’t know until 2020, which will allow for enough time for the Canadian market to have moved far enough past legalization that we start seeing tangible results that we can compare.