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Why Product Landscape Design Matters for Cannabis Stocks

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The product landscape

Given that a big portion of customers will transition from illicit sources to regulated legal sources, it’s reasonable to think that the initial products will be similar to what’s available in the illicit market. The popularity of various cannabis consumption methods could guide the product landscape design for cannabis companies (MJ) such as Canopy Growth (CGC) (WEED), Aurora Cannabis (ACB), and Aphria (APHQF).

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Formats of consumption

There are three broad ways that users consume cannabis. The most common format of consuming cannabis is smoking the dried product either directly or by mixing it with tobacco. Vaping and consuming edibles infused with cannabis are two alternative methods of consuming cannabis. The format of consumption affects the duration of the effect.

The data

The stigma surrounding smoking is quite prevalent, which is evident in the above chart. The percentage of the population using tobacco in Canada has gradually fallen from 49.5% in 1965 to just about 13% in 2015. The above chart includes both daily and non-daily users.

The challenge

To expect Canadians to smoke cannabis against the above evidence of a decline in the smoking trend is a tall order. However, a counter-argument would be that tobacco and cannabis do not have the same impact on human health. Moreover, cannabis is also used for medical purposes. This type of marijuana smoking doesn’t always carry the same negative stigma that recreational smoking does.

Producers are well aware of this challenge surrounding the negative stigma of marijuana smoking and will likely look at the formats of products to attract sales from customers.

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