Cannabis in Canada: Food and Drink - Canada - March 2021

OVERVIEW
What you need to know
Key issues covered in this Report
Definition
EXECUTIVE SUMMARY 
Top takeaways
Market overview
Impact of COVID-19 on cannabis
Figure 1: Short, medium and longer-term impact of COVID-19 on cannabis, February 2021
Opportunities
Edibles and drinkables are a vital tool to broaden the cannabis industry
Cannabis use is often functional
‘The munchies’ means cannabis can positively impact other industries
Consumers’ interest in appealing taste creates an opportunity for differentiation
Alcohol is a substitute, complement and comparison point for cannabis
Challenges
Edibles and drinkables have quantifiable drawbacks compared to other formats
THE MARKET – KEY TAKEAWAYS
The legal cannabis market is finding its footing
Health trends could benefit the edible/drinkable category
Edibles and drinkables still face unique challenges
THE MARKET – BY THE NUMBERS
Licensed cannabis consumer expenditure has surpassed unlicensed
Figure 2: Non-medical cannabis household consumption expenditure, Q3 2017-Q3 2020
Pricing has made the legal market more competitive
Figure 3: Non-medical cannabis implicit price index, Q3 2017-Q3 2020
It’s easier to buy legal cannabis
Figure 4: Number of federal cannabis licence holders, October 2018-September 2020
Edible and drinkable cannabis sales continue to grow
Figure 5: Non-medical edible/drinkable cannabis sales (packaged units), December 2019-October 2020
MARKET FACTORS
The Cannabis Act limits marketing and production capabilities
The Cannabis Act prohibits most promotion of cannabis
Figure 6: Have the Cannabis Talk with your kids. We can help, February 2021
Edible and drinkable production must take place in a cannabis-only building
Edibles/drinkables prices compared to other formats
Cigarette smoking is in decline
Figure 7: Current or daily occasions smokers, 2015 vs 2019
The science of edibles and drinkables
Many Canadians experience mental health challenges
Figure 8: Mental health challenges experienced in the past 12 months, December 2020
Impact of COVID-19 on cannabis food and drink
Lockdown
Re-emergence
Recovery
COMPANIES AND BRANDS – KEY TAKEAWAYS 
Companies are quickly evolving the cannabis industry
COMPETITIVE STRATEGIES
Social media is a vital tool for cannabis marketing in Canada
Figure 9: San Rafael ‘71 Facebook post, February 2021
Figure 10: Up Cannabis Twitter post, December 2020
Figure 11: Houseplant Instagram post, March 2021
Comparing low and high cost edibles and drinkables
Figure 12: Chowie Wowie Edibles Instagram post, September 2020
Figure 13: The Edison Co Instagram post, December 2020
Figure 14: Truss Beverages Instagram post, December 2020
Figure 15: Truss Beverages Instagram post, November 2020
Alcohol brands are investing in drinkable cannabis
Figure 16: Hi-Fi Hops Instagram post, November 2020
Cannabis companies are diversifying their brand portfolios
Fast-acting technology is helping improve edibles/drinkables
Figure 17: Wana Brands Instagram post, November 2020
THE CONSUMER – KEY TAKEAWAYS 
Cannabis usage
Cannabis formats
Edibles and drinkables purchase factors
Food and drink consumed with cannabis
Comparing edibles/drinkables to other formats
A closer look at open non-users
CANNABIS USAGE
A snapshot of usage: a quarter of consumers use cannabis
Figure 18: Used/consumed in the past six months, December 2020
Men drive demand in the cannabis industry
Figure 19: Used/consumed in the past six months, men vs women, December 2020
Figure 20: Used marijuana/cannabis in the past six months, men vs women by age, December 2020
Figure 21: Used marijuana/cannabis in the past six months, men vs women by presence of children, December 2020
Cross usage shows that cannabis is closely connected with other controlled products  
Figure 22: Used marijuana/cannabis in the past six months, by usage of other controlled products, December 2020
A look back: cannabis usage is at the same level as 2019
Figure 23: Used/consumed marijuana/cannabis in the past six months, March 2019 vs December 2020
Declines were biggest among young Canadians 
Figure 24: Used/consumed marijuana/cannabis in the past six months, March 2019 vs December 2020
Cannabis usage is usually functional
Figure 25: Reasons for using marijuana/cannabis, December 2020
Figure 26: Reasons for using marijuana/cannabis, by age, December 2020
Figure 27: Tweed Instagram post, July 2020
Sleep as an opportunity to expand cannabis usage
Figure 28: Up Cannabis Instagram post, March 2019
CANNABIS FORMATS
Edibles are the second most common format of cannabis
Figure 29: Marijuana/cannabis formats used in past six months, December 2020
Figure 30: Marijuana/cannabis formats used in past six months, cigarette smokers vs non-smokers, December 2020
Edibles and drinkables resonate with women and higher income/education levels
Figure 31: Marijuana/cannabis formats used in past six months, men vs women by age, December 2020
Figure 32: Marijuana/cannabis formats used in past six months, by household income, December 2020
Figure 33: Marijuana/cannabis formats used in past six months, by education, December 2020
Drinkables make it easy to use cannabis discreetly
Figure 34: Marijuana/cannabis formats used in past six months, parents vs non-parents, December 2020
Edibles and drinkables will be central in attracting new users
Figure 35: Marijuana/cannabis formats that may be used in the next six months, December 2020
Figure 36: Marijuana/cannabis formats that may be used in the next six months, current users vs open non-users, December 2020
Quebec is less interested in edibles, but presents an opportunity for drinkables
Figure 37: Marijuana/cannabis formats that may be used in the next six months, by region, December 2020
Companies must focus on the edibles and drinkables consumers want
Sweets are at the centre of edibles demand
Figure 38: Interest in edible type, December 2020
Figure 39: Foray Instagram post, October 2020
Figure 40: Foray Instagram post, September 2020
Cannabis-infused tea should be targeted at older consumers
Figure 41: Interest in types of drinkables, December 2020
Figure 42: Haven St Instagram post, December 2019
Carbonated cannabis beverages have a clear overlap with alcohol drinkers
Figure 43: Tweed Instagram post, May 2020
Figure 44: Interested in carbonated cannabis drinks, men vs women by age, December 2020
Figure 45: Interested in carbonated cannabis drinks, men vs women by presence of children at home, December 2020
EDIBLES AND DRINKABLES PURCHASE FACTORS
Taste and price are the most important factors
Figure 46: Factors most important to edible/drinkable cannabis purchases, December 2020
Consumers are looking for taste that is appealing, not just tolerable
Older women are the most interested in appealing taste
Figure 47: Edibles/cannabis purchase factor: appealing taste, men vs women by age, December 2020
Figure 48: Edibles/cannabis purchase factor: tolerable taste, men vs women by age, December 2020
The value equation for cannabis consumers
Current users are focused on how much THC is included
Figure 49: Factors most important to edible/drinkable cannabis purchases, by cannabis usage, December 2020
Branding remains a challenge in the cannabis industry
Brand power is a particularly stark difference between cannabis and alcohol
FOOD AND DRINK CONSUMED WITH CANNABIS
Most cannabis users experience ‘the munchies’
Figure 50: Food and drink consumed while using cannabis, December 2020
Pantries and freezers are the targets of many cannabis users
Figure 51: Snacks consumed while using cannabis, by age, December 2020
Figure 52: Oh Henry! Instagram post, April 2018
Figure 53: Ben & Jerry’s Twitter post, April 2019
Hot food is another common munchie item
Users often crave foodservice
Figure 54: Typically eat fast food while using marijuana/cannabis, by age, December 2020
Figure 55: Foodora Canada Instagram post, April 2018
Figure 56: Jack in the Box Instagram post, December 2017
Fried foods and pizza are menu items that will resonate
Figure 57: Hot foods typically eaten while using marijuana/cannabis, by age, December 2020
CPGs can promote their hot foods too
Alcohol is often complementary to cannabis
Alcohol and cannabis pairing is more common during fun events
Figure 58: Alcoholic beverages consumed while using marijuana/cannabis, by age, December 2020
Figure 59: Alcoholic beverages consumed while using marijuana/cannabis, by reason for cannabis usage, December 2020
COMPARING EDIBLES/DRINKABLES TO OTHER FORMATS
Advantages of edibles and drinkables
They are convenient and discreet
Figure 60: Attitudes towards edible/drinkable cannabis: convenience and discretion (% agree), December 2020
They are considered healthier
Disadvantages of edibles and drinkables
They are expensive
Figure 61: Edibles/drinkables are expensive compared to other forms of cannabis (% agree), by current financial situation, December 2020
They take too long to have an effect
Figure 62: Edible/drinkable cannabis takes too long to take effect (% agree), by age, December 2020
Figure 63: Stillwater Life Instagram post, January 2021
Consumers believe drinkable cannabis is healthier than alcohol
Figure 64: Drinkable cannabis is healthier than alcohol (% agree), by age, December 2020
A CLOSER LOOK AT OPEN NON-USERS
A quarter of non-users are open to using cannabis
Younger consumers, men and dads present the best opportunity
Figure 65: Open to using marijuana/cannabis in the next six months (% yes), men vs women by age, December 2020
High income household consumers are interested in cannabis
Figure 66: Open to using marijuana/cannabis in the next six months (% yes), by household income, December 2020
French Canadians will be a challenging target
Figure 67: Open to using marijuana/cannabis in the next six months (% yes), by language spoken at home, December 2020
Cigarettes, e-cigarettes and CBD are uncommon among open non-users
Figure 68: Used/consumed in the past six months, cannabis users vs open non-users, December 2020
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Consumer survey data
Mintel Trend Drivers
Abbreviations and terms
Abbreviations
Terms