Cannabis consumers in the US are more interested in the drug for its medical benefits than their Canadian counterparts are, one expert says.

At the Retail Council of Canada’s Retail Cannabis Forum event on Tuesday (November 19), Jennifer Lee, a partner at financial advisory firm Deloitte, said the distinction between American and Canadian users plays out in the consumption rates of some cannabis products.


“They actually focus more on sublingual products, capsules, topicals and tinctures. And really that’s because they see the cannabis market as more therapeutic, whereas the Canadian users see it as more social,” she said.

At the forum, current and aspiring cannabis retailers heard from industry experts about the challenges of selling cannabis post-legalization in Canada as the country nears the second stage of edible products, dubbed Cannabis 2.0.

The Deloitte executive went on to say the difference in intent between Canada and US users has put Canada over the top when it comes to cannabis consumption.

“When you see Canada outperforming the US in usage, it’s really because they see the product as a highly social product,” said Lee.

The real challenge for retailers will be competing with other players in the larger entertainment space and finding a way to tap into the new user market, Lee noted.

Lee’s presentation was based largely on the “Nurturing new growth: Canada gets ready for Cannabis 2.0” report Deloitte released earlier this year.

Though the Canadian market is projected to experience a growth stage with the infusion of new products, Lee told the audience retailers should make sure they can use their Canadian assets as a platform to leverage a presence in the larger market of the US.

With the projected growth in Canada, there’s an expectation for retail cannibalization, according to Lee.

She said that while more retail licenses are bound to come along, more brick-and-mortar locations means greater chances of stores next to each other eating into the other’s results, which is why she cautioned retailers to strategically think about how they plan on winning “the path to purchase” with their locations.

At the national level, Lee said one of the biggest points of emphasis for retailers should be collecting customer data to optimize their product selection.

“In a world where you can’t market and in a world where retailers are struggling to figure out the right assortment, using customer data is going to be important in buying the right assortment for your brand,” she said.

Retailers discuss industry one year after legalization

The event also held conversations between retail representatives from Fire & Flower Holdings (TSXV:FAF), Canopy Growth (NYSE:CGC,TSX:WEED) and The Hunny Pot, who discussed the lessons learned from the first year of operations in the legal market.

Hilary Smee, vice president of retail infrastructure and strategic projects at Canopy Growth, said branding cannabis as a retail product is an effort to elevate the drug to the level of other branded items and create an “immersive dispensary experience.”

“It’s born from the idea that cannabis can be seamlessly and intentionally integrated into the day-to-day,” said Smee.

Smee added that the advent of edibles legalization in Canada would add another layer of difficulty for retailers as more brands hit the market and as the industry is subjected to the expectations of other retail sectors.

The considerations don’t stop there. At the store level, Cannabis 2.0 is now forcing retailers to rethink the strategies for their stores for the new wave of products to come.

Canopy Growth Vice President of Retail Lacey Norton said she thinks the sector could see a supply shortage of edibles similar to the shortage of cannabis that first hit the industry when it was legalized last year.

Despite the challenges, Fire & Flower’s Isaac Watson, vice president of product development and retail experience, said the new product offerings, particularly beverages, will emerge as a big draw for cannabis by leveraging its lower dosage level.

Don’t forget to follow us @INN_Cannabis for real-time news updates!

Securities Disclosure: I, Danielle Edwards, hold no direct investment interest in any company mentioned in this article.

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