The cannabis industry is making huge strides worldwide as more and more countries begin to decriminalize, legalize, and regulate the sale of medicinal and recreational marijuana.
On the 17th of October in 2018, Canada became the second nation after Uruguay to legalize the recreational use of cannabis.
Down south, it’s expected that new changes in federal leadership could see the U.S cannabis industry swell up to a staggering $30 billion in market value annually by 2025. As lawmakers and regulators clash to legalize cannabis across the world, many businesses and entrepreneurs are also clamouring to enter into the scene.
However, the cannabis industry is still in its infancy, and it is not without its challenges. As regulations, public opinion, and technology continues to evolve, so too must business if they wish to survive in the cannabis space. Many of these challenges are unique to the cannabis industry, and investors looking to break into the scene may find themselves facing more resistance relative to other industries.
Here are 3 ways the cannabis industry is unique, and how these challenges will inevitably shape the path ahead for retail cannabis in Canada.
Cannabis Regulation Differs Between Provinces.
Although cannabis has been legalized federally, there is no core legislation regulating how cannabis retail and consumption is handled across the country.
Different provinces have different age requirements for the consumption of cannabis, as well as different models for digital and retail sales. In Saskatchewan, cannabis sales permits require a character check, store security, inventory tracking, and adherence to municipal zoning laws. In Quebec, cannabis cannot be sold by private retailers but can be sold by public and government-run retail locations and through government-operated websites.
These differences in regulation make it difficult to shape user experiences across the country. Some consumers may look for the convenience that a website offers while others might prefer meeting a budtender in person to talk about product options.
Players in the cannabis space need to be ready to adapt to each province’s regulations and develop either a strong physical presence, an online presence, or both, in order to meet consumer expectations.
With the Canadian federal government legitimizing cannabis, its consumption and applications for recreational and medicinal purposes are slowly becoming more widely accepted. That being said, the cannabis industry is still fighting an uphill battle to eliminate the litany of negative stigmas cannabis has.
When it comes to meeting marketing objectives, a lot of work needs to be done in order to break into untapped markets. Marketing strategies will also need to account for misinformation surrounding the use of cannabis and its effects and will have to invest heavily in order to gain consumer trust and buy-in.
Evolving Product Regulations.
When Canada made cannabis legal for sale in 2018, legislation at the time only applied to dried flower and not other product formats such as cannabis edibles or concentrates. Exactly a year later, edibles and concentrates were made legal as well.
As the market evolved, so too have regulations. While edibles such as candies and beverages are available for sale, the amount of THC per package is capped at 10mg. Currently, there’s no word on whether or not this cap will be raised or not, but the rollout for new product formats remains very much in flux.
Licensed producers and retailers alike must be quick to pivot in order to comply. Product packaging, branding, and even marketing collateral regulations could change at a moment’s notice and the consequences for failing to adapt in time could prove costly.
Cannabis Industry Ripe for Disruption.
Although the cannabis industry is still in its infancy, the space is ripe for disruption for new ideas and strategies that can break into its still widely untapped market.
Whatever the challenge, the most important thing for anybody involved in the cannabis space is to be cognizant of these hurdles. Once you understand the scope of the challenges, it’s easier to adapt in order to survive and thrive in this still rapidly changing landscape.
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