Pubdate: Fri, 08 Sep 2017
Source: Winnipeg Free Press (CN MB)
Copyright: 2017 Winnipeg Free Press
Contact: http://www.winnipegfreepress.com/opinion/send_a_letter
Website: http://www.winnipegfreepress.com/
Details: http://www.mapinc.org/media/502
Author: Dan Kriznic
Page: A9

U.S. OFFERS LESSONS FOR LEGALIZATION

IF Canada's experience with legal recreational marijuana parallels
what is taking place in U.S. states, we have much to anticipate in
terms of entrepreneurial ferment, job creation, wealth expansion and
boosted tax receipts.

Legal recreational marijuana has been law in Colorado for three and a
half years, and a little more than three years in Washington. Oregon
staggered its rollout of recreational marijuana between 2015 and last
year, Alaska and Nevada's programs are up and running and soon to
follow are Massachusetts, Maine and the cannabis behemoth known as
California.

And in Canada, we are marching toward nationwide legalization sometime
next year.

Data from cannabis market research leader BDS Analytics show that even
as the U.S. pot boom enters its fourth year, the marketplace continues
to grow at a rapid pace.

Year-to-date through May of this year, cannabis sales in Colorado,
Oregon and Washington reached US$1.16 billion, which is 35.4 per cent
ahead of last year's sales. In most industries, growth of a handful of
percentage points is considered a break-out-the-champagne triumph.

While sales overall boomed, growth was especially pronounced in a few
categories, and we are wise to study sales trends in U.S. states to
help understand what the Canadian cannabis marketplace might look like
soon after joints, vape pens and brownies start being sold to
recreational consumers.

The U.S. cannabis market falls into a number of categories, but the
three dominant ones are flower (bulk cannabis sold by weight),
concentrates (products such as vape pens, shatter and wax) and edibles
- - everything from refrigerated sodas to cherry pie.

Among the top three, flower sales dominate in all states. During the
first quarter of 2017, flower captured 52 per cent of the broader
cannabis market. Meanwhile, concentrates snagged 24 per cent of the
market and edibles earned 12 per cent.

Canada's experience with recreational marijuana will hinge, in part,
on the regulatory framework. Laws can have immense impact on trends.

Flower's dominance is impressive, but the other categories are
muscling into its domain. During Q1 2016, for example, flower owned 60
per cent of the market.

The slow but steady increase of concentrates sales, at the expense of
flower, could easily describe the Canadian marketplace once full
legalization is in place. Edibles, while a strong cannabis market,
have grown, but their market share between the states has tended to
remain below 13 per cent. Meanwhile, concentrates' market share grew
from 14 per cent in 2014 to 24 per cent in 2017.

The market leader among concentrate styles is vape pens and
cartridges. For the first quarter of 2017, for example, vapes expanded
by 35 per cent. During Q1 of 2016, and excluding Oregon because
concentrates were not sold through recreational channels until later
in the year, growth was 27 per cent.

Meanwhile, flower sales do continue to boom. In Colorado, sales of
flower during the first quarter of 2017 reached US$178.6 million, up
20.4 per cent from the same quarter in 2016 (all of the growth came
from the recreational channel, where sales increased by 35.5 per cent;
medical fell by 4.5 per cent).

In Washington, the trend for flower is even more dramatic, up 44.5 per
cent during the first quarter of 2017 compared with the same quarter
in 2016.

Canada's experience with recreational marijuana will hinge, in part,
on the regulatory framework. Laws can have immense impact on trends.
In Washington state, for example, the state banned THC-infused candy
when recreational sales first began in June 2014. The state eventually
allowed candy, but sales of the category in the state today are far
behind the market share for candy in Colorado.

Laws do matter, especially in an industry such as cannabis, which is
likely to experience complicated and wide-ranging regulations
regardless of whether the laws are being set in California or Canada.

We are eager to continue to engage with provincial and federal
officials and industry stakeholders as Canada continues its progress
toward full legalization next year. Based on what has flowered in the
United States, we have much to look forward to in this blossoming industry.

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Dan Kriznic is chairman and CEO of Invictus MD, a Vancouver-based 
company that invests in medical marijuana producers and ancillary 
businesses.
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MAP posted-by: Matt