Provincial Updates

Ontario

New data shows sales made through Ontario’s legal cannabis channels have overtaken those made through the illicit market for the first time ever. The Ontario Cannabis Store said in its second-quarter report released this week that 54.2% of the pot purchases made in the province between July and September were linked to legal retailers. The figure is based on self-reported data that Statistics Canada collects from marijuana consumers, who may under-report purchases made in the illicit market because of the stigma cannabis still carries. However, it suggests the cannabis market is at or nearing a long-awaited turning point after the legal industry spent the last three years slashing prices to compete with the illicit market and police raided a series of unlicensed dispensaries.

Manitoba

Manitoba is planning to once again go through a round of consultations over cannabis consumption spaces — more commonly known as cannabis lounges. Justice Minister Cameron Friesen says the Liquor, Gaming and Cannabis Authority intends to hear from the cannabis industry, stakeholders and the public in 2022. The government’s first consultation showed a slight majority of those polled disagreed with allowing cannabis consumption spaces. A total of 800 online surveys were collected, with 43% of respondents opposed to the sites, 39% in favour, and 15% neutral.

A new Winnipeg-based company is promising cannabis delivery directly to the customer’s door. The Half Circle – or THC for short – has launched an on-demand cannabis app, calling it the first of its kind in Canada. The app allows Manitobans to order cannabis through a smartphone and have it delivered to their location immediately.

Alberta

Licensed cannabis retailers in Alberta will get to sell their products online March 8, the same day Alberta’s regulator wraps up its cannabis sales website. Alberta Gaming, Liquor and Cannabis confirmed that the transition will come three months after Bill 80, Alberta’s Red Tape Reduction Implementation Act, received royal assent and set a 90-day timer for the regulator, currently the only authorized online retailer for cannabis products, to withdraw from the digital marketplace and make room for licensed retailers to install their own e-commerce platforms. Licensed retailers will also need to obtain an endorsement from the regulator before selling products online and offering delivery services through staff or contractors. While these retailers may sell products on a mobile version of their website, they will not be allowed to use third-party apps.

Quebec

As of January 18, 2022, SQDC customers will be required to present a vaccination passport with the “adequately protected” status to access the sales area of its stores. This proof of vaccination will be validated at the same time as proof of identity. The vaccine passport can be presented in the following formats: on the VaxiCode application, on paper or in PDF on a mobile device. Customers without a vaccine passport will be able to shop online and choose from different delivery options available in their area. In order to respect social distancing and current sanitary guidelines, the number of customers allowed inside a store is reduced depending on the size of each store. This measure aims to reduce the risk of COVID-19 contamination for our employees and customers.

Saskatchewan

The Saskatchewan Liquor and Gaming Authority is investigating a cyberattack, after it was hit on Christmas Day. The Crown corporation, which is headquartered in Regina, operates about 35 liquor stores in 24 communities, is responsible for regulating alcohol and cannabis and also operates and regulates many forms of gaming throughout the province.

British Columbia

In keeping with its commitment to develop a robust and diverse legal cannabis economy in B.C. that is inclusive of rural and Indigenous communities, the Province is launching the B.C. Indigenous Cannabis Product (BCICP) program. The program will highlight cannabis products from B.C.-based Indigenous producers in private retail stores and BC Cannabis Stores as well as online, helping consumers easily identify Indigenous products and make purchasing decisions. Interested licensed producers and processors in B.C. can find detailed BCICP information on the BC Liquor Distribution Branch website at https://www. bcldbcannabisupdates.com/BCICP.

Prince Edward Island

According to its 2021 Annual Report, PEI Cannabis total net sales for the calendar year were $17,011,533 across its four stores and online. Of those sales, 65% represented dried flower, 15% pre-rolls, 6% ingested extracts, with concentrates, edibles and beverages making up less than 7%. Of the total net sales $1.45 million was from online revenues, or 6% of sales.

Newfoundland & Labrador

According to the Newfoundland and Labrador Liquor Corporation (NLC), sales for recreational marijuana from April through November were about $39.6 million, a 25% increase from the same period in the previous year. (December figures were not yet available.)

Heading into the current fiscal year, which began in April, there were 30 licensed retailers in Newfoundland and Labrador. As of January, there were 38.

Nova Scotia

Two of the largest Mi’kmaw communities in Nova Scotia are taking different approaches to cannabis. Membertou plans to regulate private dispensaries, while Eskasoni is leaving the oversight and sales of cannabis up to the province. Last year, Eskasoni had been thinking about opening its own dispensary, but decided against it. Instead, the band has signed a five-year deal with the Nova Scotia Liquor Corp., to open provincially regulated alcohol and cannabis outlets on reserve. Meanwhile, Membertou has more than a dozen private dispensaries operating on its reserve. Last week, band members voted in a community poll to allow the dispensaries to continue, as long as the band regulates their operation.

New Brunswick

Organigram Holdings Inc. has acquired all of the issued and outstanding shares of Laurentian Organic Inc. in a cash and share transaction for aggregate consideration of $36 million, plus earnout consideration payable, if applicable, based on Laurentian surpassing certain EBITDA thresholds in calendar 2022 and 2023.

Yukon / Northwest Territories / Nunavut

The Yukon government passed amendments to the Cannabis Control and Regulation Act as one of their final moves of its fall session, to let private retailers open up e-commerce and delivery services. In May 2020, the Yukon government put in place a temporary measure under the Civil Emergency Measures Act (CEMA) to let private cannabis retailers set up virtual shopping as a way to reduce the risk of going to brick-and-mortar stores in the early days of the COVID-19 pandemic. A year later, Yukon retailers still need to wait for the regulations to be put in place by the territorial government before giving e-commerce another go. / Rubicon Organics has received its first purchase order and is expecting to make its first shipment to the NTLCC in January 2022. “Simply BareTM Organic will now be sold in the Northwest Territories, expanding Rubicon Organics’ geographic coverage across Canada. Similarly, CannMart most recently added Yukon, NorthWest Territories and Nunavut to its jurisdictions it currently sells product to.

The Health and Wellness Opportunity for Cannabis Brands

By Rahul Sethi and Michael Fragomeni

From stress and anxiety, to pain, to insomnia and more, cannabis has had a long – albeit underground – history of helping Canadians gain relief from the medical conditions that ail them. With the stigma around cannabis gradually fading, new medicinal strains, forms and uses are coming to light. It’s great news for those already enjoying the health-and-wellness benefits of cannabis. It’s also giving potential cannabis users looking to treat a medical condition more options to feel that much better. According to Vividata’s annual Cannabis

Consumer Study, which surveys nearly 5,000 respondents over the age of 19 each year, 6.1 million Canadians were cannabis users* in 2021. Of those cannabis users, two in five (or 2.4 million) turned to cannabis to treat a wide variety of medical conditions. However, while recreational use has gone up by an estimated 28% since legalisation, medicinal or health-and-wellness use has remained relatively flat. This flies in the face of more Canadians, who do not currently use cannabis, reporting that they would consider using it to treat an ailment. In 2019, 1.1 million Canadians that did not currently use cannabis expressed some likelihood to try it for health and wellness reasons. In 2022, the rate of potential cannabis users for health and wellness more than doubled to an estimated 2.9 million (or 1 in 10 Canadians over the age of 19). These potential health-and-wellness users pointed to several reasons for their interest in using cannabis as a form of treatment. The top reason, as indicated by 72% of this potential market, is that they learned the benefits of cannabis through media, while 68% said they’re looking for an alternative treatment due to failure or side effects from a current treatment they’re using.

So, with all this interest in cannabis for health and wellness, what’s the hold up?

Our research shows that aside from cost, the main factors preventing these potential users from purchasing cannabis products for their own healing are: » They want a recommendation from a medical professional, » they’re worried about the long-term effects of cannabis use, » and they can do without the “high”.

Essentially, these potential users lack relevant knowledge of cannabis to consider it as a medicinal option. For example, most don’t understand the difference between CBD and THC, and perhaps, don’t realize that there are CBD products on the market that provide health benefits they’re looking for without the “high” produced by THC.

What are potential users looking to treat, and what forms do they want to use?

Just over three in four potential health-andwellness users are looking to gain relief from pain-related conditions (whether general or chronic pain) and are more likely to be over the age of 50. While just over one in two are looking to gain relief from a mental health condition and tend to skew under the age of 35.

Regardless of the specific medical reason they’d try cannabis, potential health-and-wellness users aren’t into traditional forms of cannabis, not really. Canadians are used to taking capsules or soft gels to relieve nausea, or topicals to relieve muscle fatigue or pain for example. The expectation among potential cannabis users is that the process of treating their conditions with cannabis would be a similar experience to pharmaceutical drugs. Essentially, in comparison to users of recreational cannabis, potential health and wellness users are much more hesitant to try combustible product forms.

What does this mean for cannabis product brands?

Lack of knowledge on cannabis, its healing properties and safe use, are problems in convincing the many Canadians interested in cannabis for health and wellness to take the leap. A problem, yes. But it’s not insurmountable. Greater involvement from the medical industry in recommending cannabis, as well as education through media and cannabis brands can have a great impact on informing these potential users of the benefits of medical cannabis, along with dispelling many of the worries, or lingering misconceptions they may have about cannabis in general.

Also, given that potential users are looking for alternatives to their current treatment (because of side effects or because they feel their current treatment isn’t effective enough), demonstrating the efficacy of cannabis through current users could help. Our consumer research shows that once someone has used cannabis as a form of remedy, they feel it’s effective enough to discontinue or reduce use of other modern pharmaceutical drugs in favour of cannabis. Plus, since this group also isn’t into combustible forms of cannabis, showing medically familiar options like capsules, soft gels, tinctures and more, will ease and demystify the experience of trying cannabis, and make it more like trying another over-thecounter option.

For cannabis brands providing health and wellness products, there’s a substantial consumer base waiting to be tapped. Given the federal restrictions on cannabis marketing, these consumers just need to be understood by brands and approached creatively.

To better understand current and potential cannabis consumers, get in touch: info@vividata.ca.

About Vividata

Vividata provides essential consumer intelligence to a wide range of marketers, advertisers and media agencies in Canada. Vividata’s annual Cannabis Consumer Study provides an in-depth look at medicinal and recreational cannabis users, how Canadians feel about cannabis, the potential for nonusers to try cannabis in the future, brands preferences and awareness, and much more.

Rahul Sethi is the Director of Insights and Marketing and Michael Fragomeni is Consumer Insights and Operations Supervisor at Vividata.

Footnote: *Those who used cannabis in any form within the past 3 months of being surveyed.