The market for cannabis edibles could be worth roughly $2.7 billion a year, according to a new report.
A study by Deloitte found the next phase of cannabis legalization — which will include edibles other alternative cannabis products — could generate higher profits for retailers.
WATCH: 6 months until edibles hit the market, Cannabis companies get ready for 2nd round of legalization
The report estimates that more than $1.6 billion will be spent annually on edibles and $529 million on cannabis-infused drinks, while topicals, concentrates, tinctures and capsules would combine for more than $400 million in sales.
Jennifer Lee with Deloitte says the company’s research indicates that much of that economic boost “will be on top of current cannabis product spending.”
The report says the legalization of edibles could lead to new products that would appeal to novice “cannabis-curious” consumers.
“The introduction of cannabis-infused edibles will clearly threaten the alcohol industry as consumers are using the product for similar usage occasions,” Lee said.
Last month, a study out of Dalhousie University found Canadians have become less willing to try cannabis-infused edibles.
WATCH: Canadians’ appetite waning for cannabis edibles?
In 2017, before legalization, 46 per cent of respondents said they’d be willing to try edibles presented as food. But in a new poll, that number had fallen to 36 per cent.
Large cannabis companies say they are preparing for the legalization of edibles.
Edmonton-based Aurora Cannabis Inc. says it is building up inventory in anticipation of the legalization of edibles and vaping products next fall.
Production is expected to grow to 25,000 kilograms in the current quarter ending on June 30, but an unspecified portion will be held out of the market, Aurora chief financial officer Glen Ibbott said.
“What we’re trying to do is learn from the challenges of the industry last year and the initial launch of consumer legalization,” Ibbott said. “We absolutely have to have sufficient inventory to launch these products properly.”
Ottawa has indicated that edibles containing cannabis and cannabis concentrates would become legal for consumers in October, but the exact timing of product approvals and sales is still unknown.
—With files from Patrick Cain and the Canadian Press