The Canadian cannabis edibles market is evolving rapidly. Since launching in 2019, edibles have captured consumer interest, but market dynamics have shifted significantly. Gummies dominate while beverages stagnate, and regulatory changes loom on the horizon in 2023.
Today, gummies lead the category while cannabis beverages struggle to gain traction. This article examines the data behind these trends, explores why consumers prefer certain edible formats, and outlines the regulatory reforms needed to unlock the market’s full potential.
It’s All About Gummies
According to a 2021 report from Dalhousie University’s Agri-Food Analytics Lab (AAL), cannabis consumer behavior tracking and analytics show that only 25 percent of cannabis consumers now prefer edibles.
Consumer interest in edibles has declined since the category launched. When edibles first arrived in late 2019, consumer preference reached 36 percent. This initial enthusiasm has cooled, yet gummies and other sweets remain the top choice within the edibles category. Despite a world of options—from baked goods to drinks to chocolates—the top choice of Canadians is a THC-infused gummy.
This preference matches consumer behavior in more mature markets. In fact, across the major US cannabis markets, gummies alone made up more than $1 billion in sales in 2021, capturing 70 percent of edible sales by category and market.
Gummies appeal especially to new cannabis consumers and experienced users who want precise control over their dosage. These edibles deliver predictable effects across diverse cannabinoid profiles. The category will likely continue to grow because gummies offer discretion, exact dosing, and appealing flavors that attract both novice and seasoned users seeking consistent experiences.
Cannabis Drinks Lose Consumer Interest
When cannabis beverages first launched, they received significant media and industry attention. Yet three years in, cannabis-infused beverages display and promotion have failed to really grab consumer interest.
Several factors explain this stagnation. The Ottawa Business Observer suggests that cannabis beverages were once expected to attract first-time cannabis consumers. However, most of the curious newcomers have now tried them, and the pool of first-time cannabis consumers willing to try beverages has shrunk significantly.
Secondly, beverages have not broken through their novelty status. Consumers still prefer edibles and other infused foods over a drinkable format. This preference may reflect familiarity—infused foods have a longer market history than infused beverages, making them feel more mainstream to consumers.
Thirdly, cannabis drinks are ideal in social settings, but pandemic lockdowns eliminated most gatherings for two years. Just as beer sales slowed during COVID-19 lockdowns, cannabis beverage consumption declined because social occasions largely disappeared. Post-pandemic recovery will require people to return to parties and gatherings where THC drinks can position themselves as alcohol alternatives.
While cannabis drinks are not disappearing from the market, Canadians need time after the pandemic to build familiarity with this category. Only as social gatherings resume and consumers perceive THC drinks as practical alcohol substitutes will this category find sustainable growth.
Regulatory Barriers Limit Market Growth
The Canadian cannabis edibles market lags far behind the US market in scale and revenue. This disparity extends beyond population differences alone.
Canadian Potency Limits Restrict Market Growth
One key difference is Canadian cannabis compliance and regulatory integration policies over edibles. In Canada, packages can only contain 10 mg of THC, with a maximum of 10 mg per serving.
In the US, policies vary by state, but most markets allow for much greater potencies or at least multiple servings per package. California, as one example, allows for up to 100 mg per package. This difference significantly impacts market size and consumer purchasing behavior.
Calls for Higher Potency Limits
Niel Marotta, President and CEO of Indiva and Co-Chair of the Edibles Caucus, is speaking on this subject at Lift&Co in Toronto this year. As the leading industry expert, he has long been an advocate for regulatory reform in edible dosing.
On March 8th, 2022, he sat down to speak with the Business of Cannabis about the need for a legislative review. Marotta explained, “There is certainly room to see higher THC limits in all the edibles. […] I kind of think of it as a barbell approach. We get people that complain there is not nearly enough THC in these packages, and then we get the more novice approach where people say, one gummy is enough for me.”
The cannabis edibles market must serve a wide spectrum of consumer preferences and tolerances. Ten milligrams may work for some Canadians, but a massive consumer demographic wants higher potencies and are finding these compliant edible products from licensed sources. The current regulatory framework fails to serve this demand.
The Lift&Co event will address this regulatory gap. As one speaker noted, “The unintended consequence of [current regulation] is that two-thirds of edible customers are going back to the illicit market for unsafe and improperly dosed products.”
Many Canadians will never move away from the legacy market. Why? Because they must purchase five packages of single-serve gummies when they can buy a single gummy with the same total THC from an illicit source. Current potency limits drive consumers toward unregulated products, undermining the legal market and public safety.
The Future of Edibles in Canada
The future of Canadian cannabis gummies and beverages hinges on whether consumers will embrace higher potency options and social consumption contexts. Regulatory reform is essential.
Will Canadians embrace gummies with potencies matching US markets? Will THC drinks ever establish themselves as the social beverage alternatives they have been marketed as? As the 2023 Cannabis Act review approaches, industry stakeholders including TechPOS are monitoring proposed changes to edible dosing and serving size limits.
Cannabis edibles are still a maturing segment. The choices made during the upcoming regulatory review will determine whether Canada’s legal market continues to lose ground to unlicensed competitors or positions itself to capture the full economic potential of cannabis edibles. TechPOS is committed to supporting dispensaries through this transition with compliant inventory management and retail solutions.
Are you heading to Lift&Co 2022 in Toronto? Connect with us to schedule a meeting or stop by our booth 1620.