Despite the legalization of edibles, analysts warn that this alone won’t save the struggling Canadian cannabis market. What companies are really hungry for is expansion into a new market: the US.
Now, Canopy Growth Corp., one of the largest cannabis companies in Canada, has made its move into the US.
BNN Bloomberg reports that Canopy’s US-branded product “First & Free” will be available for sale in 31 states where cannabis is legalized. The company plans to sell a range of products including soft gels, oil drops and topical cream. Edibles are not yet legalized in the US.
The Ontario-based retailer had already made its foray into America last year, forming a strategic collaboration with Battelle, an applied science and tech development company. Product testing, intellectual property development and clinical research take place at the Ohio facility. These efforts can continue to expand with new access to the US consumer market.
The emerging market is not lost on US companies. Nutritional High, who distributes primarily through Calyx Brands, recently reported $23.6 million (CAD) in revenue from sales of cannabis-related products distributed across over 600 dispensaries in the state of California. Another cannabis giant, Greenlane Holdings, reported net sales of $44.9 million and recently opened their third retail location in Malibu, California according to third quarter financial results.
While cannabis is not fully legal in all parts of the US, continued progress in research and regulations may turn this around. However, the US Food and Drug Administration (FDA) says they don’t have sufficient safety and efficacy data to solicit the use of cannabidiol, the non-psychoactive component of cannabis, for any reason. The regulator continues to thwart companies who illegally market and sell a number of cannabis-derived products, particularly if they tout unproven medical benefits.
Across the border, cannabis companies like Canopy continue to prosper. Earlier this year, the company launched “Cannabis 2.0,” a new portfolio of cannabis-derived goods including chocolates, vape cartridges, vape pens and sparkling beverages. In April, they secured a 48-acre property in Kirkwood, NY to build a hemp industrial park, where it will be home to “hemp-derived cannabinoid extraction and related manufacturing.”
Canopy will have to be careful as they move into the stricter US market.
In an email to BNN Bloomberg, Canopy’s vice president of communications and media Jordan Sinclair said, “First & Free products are available for purchase only in states where permissible under state law in order to ensure compliance with state consumer protection mandates, and following the most stringent state laws regarding the sale of CBD to ensure consumers have access to CBD products from a trusted source,” Sinclair said.