Recreational use legalization in Canada marked an important milestone. While most players have benefited a great deal. As a result, things are about to get even rosy. The legalization of cannabis edibles and derivatives is set to mark yet another important milestone in the evolution of the burgeoning sector.
Burgeoning Cannabis Market
Cannabis edibles are poised to result in three million new consumers according to a new study by Lift & Co & Ernst, and Young. Study results indicate that the addressable market of adult cannabis users is poised to increase to 7.6 million from 4.6 million over the next few months.
Anticipation of a widened target market is one of the reasons why pot producers are increasingly ramping up production operations. The fact that profit margins are poised to be higher with the addition of edibles is one of the reasons why the pot producers are investing vast sums of money in widening their product line on this front.
Cannabis edibles in the form of baked goods, food derivatives as well as confectionary forms would be available in plenty as these are the most popular forms among users. While most users prefer high THC content products, producers must also be ready to address market opportunity by coming up with products with lower THC derivatives.
Pricing of the derivatives products is another aspect of the business that the pot producers will have to address if they are to reach out to a wider target market. For the longest time, people have relied on the black market for cannabis derivatives. With the legalization, the producers will have to match derivatives prizes in the underworld if they are to ship as many products as possible.
The fact that most consumers view legal products as inferior compared to what is offered in the black-market is one of the challenges that pot producers will have to bypass.
Canadian Cannabis Stocks To Watch
Ahead of edibles legalization, a number of stocks are already providing exciting investment opportunities.
 Canopy Growth Corp (TSE:WEED) has, for the longest time, hinted at launching cannabis beverages on Constellations brands buying a stake in the company. Similarly, the company is well-positioned to roll out cannabis edibles as it occupies a former chocolate factory. The company is also poised to unveil an array of vaping products. As it stands, it is one of the best stocks for investors looking to gain widened exposure in the industry.
Aurora Cannabis Inc. (TSE:ACB) boasts of one of the biggest cannabis production capacity in the world. The company is set to ramp up production even further with the completion of a 300,000 square foot Polaris facility. As it stands, the company is well-positioned to launch edible products in the form of baked goods, chocolates as well as mints. In a bid to diversify the product line, the company is also seeking to launch organic edibles and sugar-free edibles.
Hexo Corp (TSE:HEXO) makes it into the list thanks to its joint venture with Molson Coors Brewing that paves the way for it to come up with CBD infused beverages. In addition to beverages, the company is also set to flex muscles in the production of gummies and vape products. Its dominance in Quebec with a 30% market share also makes it an ideal pick in Cannabis 2.0 market.
