Cannabis: the next frontier in food innovation?

At SIAL in Toronto, panellists discussed the challenges and opportunities in the cannabis edibles space

As Canadians gear up for the legalization of cannabis edibles, expected to happen by October of this year, there’s been a lot of talk about the market opportunities for cannabis-infused foods and beverages.

So when a panel of industry experts took the stage to discuss this topic at SIAL in Toronto on May 1, it’s not surprising it was a sold-out room, packed with attendees eager to learn more.

Moderated by Mark Juhasz, director of market insights and analytics at Hexo (a Canadian cannabis producer), panellists included Sylvain Charlebois, professor of food distribution and policy and senior director of the Agri-Food Analytics Lab at Dalhousie University; Pierre Killeen, part of the strategic business development team at Hexo; Trina Farr, a food scientist and product developer responsible for edibles development at Hexo; and Michael McKenzie, director of Seed to Sausage.

While there have already been a slew of announcements regarding food and beverage companies beginning to develop edibles ahead of legalization, Charlebois pointed out that many have been in the beverage space. In the snack space, on the other hand, “a lot of companies are just staying on the sidelines and they’re going to just assess the situation as it evolves.”

READ: Coke keeping an eye on cannabis-infused drinks

While opportunities abound, there are undeniably some big hurdles for food manufacturers who want to get into cannabis edibles. A cannabis processing license is required in order to put cannabis into food, explained Hexo’s Killeen, and they need to have a whole separate processing facility if they’re going to make edibles.

READ: Neal Brothers moves into edibles market

“I think it requires a lot of expertise, it’s certainly a very capital-intense process because you’re building a facility, you’re developing the standards and rules and procedures governing the operation of that facility, and that’s all before you’ve ever produced a product and sold it,” said Killeen.

READ: Edibles legalization fraught with hurdles, companies say

“There are certainly some challenges with edibles, and I think a lot of people understand that dosage is one of the biggest concerns for consumers—variability and inconsistency in the products that they have today,” added Hexo’s Farr. “Consistency will happen when legalization happens and companies really start pushing out in this space.”

READ: Canadian companies hungry to cash in on pot edibles

Killeen noted, however, that all the rules, regulations and challenges around cannabis edibles shouldn’t spook producers from getting into the potentially lucrative space: “If you step back a bit, I think there’s a significant opportunity for the food industry, and specifically for brands, as we get ready to enter this third wave of the cannabis industry.”

Juhasz asked the panel whether or not there was a specific demographic that should be targeted when it comes to edibles. “In my perspective, I think it’s the baby boomers,” said Farr. “So the ones that enjoyed cannabis maybe in the 1970s, now they have some medical ailments that they’re trying to address, and it’s a nontraditional way . I would say the people that ask me the most questions are my parents’ friends. I think that demographic is a huge opportunity.”

And, from a retailing perspective, the big question is how and where will edibles be sold? Killeen noted that each province would have its own approach.

“So in Ontario, what’s going to get really exciting is the government is going to open up, or has opened up, retail to the private sector allowing entrepreneurs to specialize or get into this industry,” said Killeen. “So I would foresee a cannabis retailer focusing uniquely on beverages, or a cannabis retailer focusing uniquely on shelf stable cannabis edibles—I could definitely see that happening.”