October 23rd, 2019 | 07:54 CEST
AURORA, BEVCANNA, EXMCEUTICALS - CANADA GETTING READY FOR CANNABIS 2.0
The consulting firm Deloitte has taken a close look at the cannabis industry and evaluated food and extracted products for the cannabis 2.0 market. In their analysis, the experts came to the conclusion that the annual Canadian market for food and alternative cannabis products is worth CAD 2.7 billion. The vast majority of this emerging cannabis 2.0 market will be products based on cannabis extracts, including foods, which the analysis puts at CAD 1.6 billion alone. But there are other significant opportunities, including cannabis-infused beverages with CAD 529 million, health products with CAD 174 million, concentrates with CAD 140 million, tinctures with CAD 116 million and capsules with CAD 114 million.
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Mario Hose
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"[...] We are a producer and distributor of medicinal products and thus cover a crucial step in the value chain, especially within the cannabis industry. [...]" Philip Schetter, CEO, Cantourage Group SE
Author
Mario Hose
Born and raised in Hannover, Lower Saxony follows social and economic developments around the globe. As a passionate entrepreneur and columnist he explains and compares the most diverse business models as well as markets for interested stock traders.
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LEGALIZATION PROVIDES FOUNDATION FOR NEW MARKETS
The realisation of this considerable market potential will take some time, according to the Deloitte experts, because many cannabis products in these categories will only be available in sufficient quantities over time. Deloitte's industry representatives see cannabis 2.0 as a catalyst for the Canadian market, which is divided into two different target groups, in the context of further legalisation in October 2019.
Firstly, experienced cannabis users, such as millennials and younger people, already consume cannabis several times a week and are open to new products.
NEW CONSUMER GROUPS OFFER POTENTIAL
As the second target group of a new cannabis boom, the Deloitte experts see the beginners and the curious. Usually they are not interested in flammable cannabis. This new conservative type of user, typically middle-aged and university educated, focuses on family needs or other responsibilities and consumes cannabis less than once a month.
These consumers are expected to be attracted to more familiar formats, particularly foods such as baked goods, confectionery and teas. The low doses available in food and micro-doses are ideal for these consumers and provide a more convenient starting point for their cannabis experience.
NEW COMPANIES OFFER FAVOURABLE VALUATIONS
The outlined development of the cannabis 2.0 market becomes interesting in connection with the increasing legalization of cannabis products around the globe and against this background not only the first series like Aurora and Canopy Growth are exciting, but also the innovative new players with interesting business models or cost-efficient structures. In recent years, the young companies have been able to learn from the weaknesses and strengths of the already established billion-euro companies.
BevCanna Enterprises Inc., a developer and manufacturer of cannabinoid-based beverages and consumer goods for private labels and white label customers, is just as interesting as EXMceuticals Inc., a company that produces CBD of the highest quality in various African countries and wants to offer it in large quantities worldwide. The two companies are currently valued at less than CAD 50 million on the stock exchange. Jonathan Summers, Chairman of EXMceuticals, will present the company this year at the German Equity Forum in Frankfurt. If Deloitte's market assessment proves to be true and this trend continues globally, then these two companies will certainly be attractively valued from today's perspective. We will see.
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