Alberta cannabis producers, retailers already in gear for legal edibles

Brad Churchill says he is poised to deliver millions of chocolate bar buzzes from his northeast Calgary factory.

Friday’s announcement that cannabis edibles could be legally available by mid-December was taken in stride by the craft confectioner who operates Choklat. Churchill said the company should be capable of producing 100,000 doses of 10-mg THC chocolate bars a day by that time.

“We’re well on our way, we’ve been ramping up,” said Churchill. “We’ve secured supply and distribution partners and we’ll have over $1 million in renovations in our facility.”

His Calgary production lines should be crafting another 38,000 packets of cannabis-infused sugar daily, capable of livening up a cup of coffee or tea.

While some have suggested cannabis legal edibles, including beverages, will be available in time to become Christmas stocking stuffers, Churchill said uncertainty over Health Canada’s packaging regulations and other logistical bottlenecks might mean a slightly later arrival on retailers’ shelves.

That later date will probably be the case, noted Michelle Russell, executive director of the Alberta Cannabis Council (ACC).

“I think Health Canada is trying to lower the expectations of consumers,” she said of the federal agency overseeing the process nationally.

“We would be very fortunate, and I’d be surprised, if we saw it on store shelves for Christmas; it might be more like early 2020.”

It wouldn’t be surprising, said Russell, if consumers and retailers experience supply constraints similar to what plagued sales of the plant’s dried flower, which led to a six-month moratorium on new store approvals in Alberta.

“The supply chain of those products from producer to consumer remains the same,” she said.

It’s even possible the supply of dried flower could be constrained by next fall, said Mike (Kato) Tomiyama, chief operating officer of retailer Four20 Premium Market.

“It could actually encroach on the dried flower side, if a lot of the flower is used to make edibles,” he said.

But an ever-increasing number of licensed producers, whose number is now approaching 200 in Canada, will likely mitigate those concerns, added Tomiyama.

Some producers and retailers have been critical of federal regulations limiting edibles to single-package THC doses of 10 mg, concerned this will produce a deluge of garbage due to the  materials needed to package these small doses.

But Russell is in favour of an approach that she said is aimed at protecting the consumer and public health. Those regulations also demand edible products lack a colourful quality that could be attractive to children.

The bottom line, said Russell, is legal edibles, beverages and topicals will significantly expand the cannabis market, appealing to those who choose not to smoke.

“It’ll be a big factor for a lot of first-time consumers or those who haven’t for a while and are coming back to test the waters,” she said.

Even so, the new products shouldn’t be expected to displace traditional cannabis products any time soon, said Russell, pointing to the experience of Colorado, where the market share is evenly split six years after the state legalized the drug.

Both Russell and a spokeswoman for provincial regulator Alberta Gaming, Liquor and Cannabis said it’s too early to say what retail prices for the products will be, though Choklat’s Churchill predicted 10 mg of a THC-steeped treat could go for about $9.

A wide variety of edibles and other cannabis extracts have long been easily accessible on black market websites, where illegal sellers continue to do a thriving business even since legalization of recreational cannabis occurred.

Russell said the introduction of legal extracts will eventually cut deeply into the illicit sales.

“It’s another step in the right direction … but it’s going to take time,” she said.

Even if the federal Liberal government is defeated in this fall’s election, the business momentum behind the expansion of legalization isn’t likely to be halted, said Nick Pateras, an industry expert with Lift & Co.

“A (prospective) federal government wants to be very cautious about big cannabis narratives close to a federal election,” he said.

“There’s very little that can be changed, whether new products are introduced or not. It’s not going to be easily disrupted by a new Conservative government” if that’s the result of a fall election.

The ACC’s Russell said most, if not all, of Alberta’s 14 licensed cannabis cultivators will also produce some kind of extracts or edibles, though a federal processing licence is required to do so.

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