Canadian Cannabis Consumers
What cannabis products are Canadian consumers purchasing today?
In Today’s Issue:
→ Cannabis In Canada. 🇨🇦
→ An Update From Mexico. ✅
→ Psychedelics Are Taking Off. 🚀
Canadians Spent $1.46 Billion USD On Cannabis
New data reveals Canadian consumers love dried cannabis flower…
Canadian consumers love to consume dried cannabis flower, however, other form factors of cannabis are quickly catching on.
Per Statistics Canada, dried flower accounted for 73% of cannabis products purchased so far this year with total cannabis sales exceeding $1.8 billion CAD.
Having accounted for 80% of the products purchased in the second half of 2020, and over 85% in the first half of 2020, the market share for dried flower is sharply declining in Canada.
The data…
73% market share makes dried flower significantly more popular in Canada compared to the U.S.
→ Edibles sales totaled $55.27 million USD, 3.8% of total sales.
→ Beverages sales totaled $19.15 million USD, 1.3% of total sales.
→ Dried cannabis sales totaled $1.06 billion USD, 73% of total sales.
→ Extracts & concentrates sales totaled $236.76 million USD, 16.4% of total sales.
Market leaders…
→ Auxly is the market leader for vapes.
→ Indiva is the market leader for edibles.
→ Hexo is the market leader for beverages.
→ Pure Sunfarms is the market leader for dried cannabis flower.
Looking forward…
The level of competition cannabis producers face in Canada is continuously increasing as more companies receive licenses to produce cannabis.
We are seeing a shift towards specialization in cannabis with certain producers now focused on winning certain categories.
→ Indiva is focusing on edibles.
→ Pure Sunfarms is focusing on flower.
→ Truss Beverages is focusing on beverages.
Our Take
The idea that a single producer can become the market leader in every single category of cannabis is becoming less logical by the day.
As the cannabis industry matures, it only makes sense that companies would focus on the areas where they have the greatest advantages, as opposed to trying to capture the entire market.
When Will Mexico Legalize Cannabis?
A top Mexican senator confirms cannabis legalization is coming soon…
The legalization of cannabis has been sweeping its way across the U.S with 11 states having implemented policy changes in the last year alone.
More change is on the horizon for cannabis.
With a population of 126 million people, Mexico will soon become the largest cannabis market in the world.
No urgency…
In November 2020, the Mexican Senate passed a bill that would legalize cannabis, however, in the 11 months since then — lawmakers in the region have struggled to intact this policy change.
Consequently, in June Mexico's supreme court voted to take action on this issue by decriminalizing cannabis as Mexico's politicians failed to pass a legalization bill by the agreed-upon deadline.
Now, the president of Mexico’s Senate says lawmakers are seeking to advance the legislation to legalize cannabis in the coming weeks.
3 years after the Supreme Court declared the prohibition of cannabis to be unconstitutional.
Achieving a consensus…
Lawmakers in Mexico are in agreement that cannabis should be legalized, however, there remain differences in opinions as to what the right regulations for cannabis look like.
This has delayed the process of legalizing cannabis.
“In these times, there is no longer room for the prohibitionist policy,” Senate President Olga Sánchez Cordero said.
One of the key issues that needs to be resolved is the regulatory body that will be responsible for overseeing cannabis regulations.
A revision to the previous bill that received overwhelming support is seeking to delegate the responsibility of overseeing the regulations to the National Commission Against Addictions, as opposed to establishing a new authority.
Looking forward…
Many people are patiently waiting on the commencement of adult-use cannabis sales, however, Mexico remains adamant it will not rush.
Mexican senators have spoken about the pressure they face from other industry interests such as the tobacco and pharmaceutical industries.
So far, they have made clear these lobbyists will have limited influence.
In Canada, both the tobacco & alcohol industries have already taken very large positions in a number of cannabis companies, however, Mexico is seemingly seeking a different fate.
Our Take
I commend Mexico’s willingness to take the time they need to ensure the policy changes they enact produce the cannabis market they envision.
That said, as we have seen with Canada — it’s almost impossible to get everything right the first time around such that I would like to see them start sooner rather than later.
Psychedelics Are Here To Stay
Another industry that was tarnished by the war on drugs is coming back…
An emerging industry that shares many similarities with cannabis is psychedelics.
Like cannabis, psychedelics were once legal, and just like cannabis, the war on drugs resulted in these substances becoming illegal.
The good news is that like cannabis, a spotlight is being placed on psychedelics as the evidence makes clear that these substances are far from the dangerous drugs they were once made out to be.
The return of psychedelics…
Since 2018, the decriminalization of psychedelics has gone from a fringe movement to a force that shows no signs of slowing down anytime soon.
There remains much stigma associated with these substances, however, armed with the data needed to debunk misinformed claims, the perception of psychedelics is sharply shifting throughout society.
With this change, capital is flowing into the psychedelics industry at a staggering rate, with over $1 billion USD having been invested in psychedelic startups in the last two years.
Where’s this cash coming from?
With over 110 companies currently developing psychedelic compounds, there’s an explosion of interest in this new industry.
A theme that’s emerging is technology-focused funds such as Founders Fund, Y Combinator & General Catalyst are willing to provide companies with the capital they need to complete clinical trials.
There are a number of companies leading the way.
Per their most recent valuations, ATAI is the leading psychedelics company.
→ (1) ATAI, $2 billion USD.
→ (2) Compass Pathways, $1.2 billion USD.
→ (3) GH Research, $1 billion USD.
→ (4) Mind Medicine, $814 million USD.
→ (5) Cybin, $342 million USD.
→ (6) Field Trip, $249 million USD.
Psychedelics vs cannabis
Psychedelics & cannabis have much in common, however, they also have many differences.
In cannabis, a majority of the market leaders are focused on the adult-use market.
In psychedelics, the leading companies are focused on clinical trials to gain FDA approval such that specific compounds can be made available for medical purposes.
The largest acquisition in the history of cannabis was GW pharmaceutical for $7.2 billion USD.
GW pharmaceuticals focused on clinical trials, however, few cannabis companies have solely focused on gaining FDA approval.
Looking Forward
Right now, there's an ever-increasing number of psychedelic companies that are seeking to complete clinical trials, however, it's important to note there’s a very significant first movers advantage.
Should Compass Pathways successfully complete its clinical trials to use psilocybin for treatment-resistant depression will have exclusivity for 5 years in the United States & 10 years in the European Union.
This model is in place to encourage companies to complete clinical trials which cost millions of dollars.
Our Take
It’s amazing to see the advancements being made to allow patients to access psychedelics.
From what we know, psychedelics are poised to have a very significant positive impact on mental health, and our ability to treat illnesses that were once impossible to help those who are suffering.
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Bonus Section
→ Greenline is hiring a Customer Success Representative.
→ Dutchie is hiring a Customer Success Manager.
→ Fire & Flower is hiring a Director of Information Technology.
If you gained value from this edition of Four PM, share it with your favorite cannabis professionals. 🌎