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Canopy Growth: A Cannabis 2.0 Update

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On December 6, Canopy Growth (CGC) disclosed its rollout plans for Cannabis 2.0 products, such as chocolates, vape pens, vape cartridges, and beverages. Cannabis 2.0 product formats became legal in Canada on October 17. However, licensed cannabis producers are required to give a 60-day notice to Health Canada prior to offering a new product for sale. Therefore, any new Cannabis 2.0 product can enter the market on December 16. However, CGC expects that Cannabis 2.0 products won’t have a meaningful presence until early January 2020.

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Canopy Growth has decided to adjust its Cannabis 2.0 product availability based on ordering and distribution patterns across provinces. The company is also leveraging its experience with the Cannabis 1.0 recreational product launch. Canada legalized Cannabis 1.0 products, such as cannabis seeds, cannabis plants, combustible cannabis, and cannabis oils, on October 17, 2018. CGC now plans to launch Cannabis 2.0 products in a staggered manner.

Deloitte has estimated Canada’s annual legal recreational marijuana market is worth 1.81 billion–4.34 billion Canadian dollars. The agency has also estimated Canada’s legal cannabis-infused edibles and beverages markets are worth 1.7 billion Canadian dollars and 529 million Canadian dollars per year, respectively.

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Canopy Growth has disclosed a detailed plan for launching cannabis-infused edibles

According to a December 6 press release, CGC plans to launch the first wave of cannabis-infused chocolates in retail shops in early January 2020. The company will be introducing the Tweed Bakerstreet, Tokyo Smoke Pause, and Tokyo Smoke Go chocolate brands. The company’s state-of-the-art chocolate factory, which was formerly a Hershey factory, is now fully operational.

According to a press release on November 27, Tweed Bakerstreet comes in blended peppermint and milk chocolate flavors. This four-pieced chocolate contains proprietary hybrid Penelope strain extracts. It packs 2.5 mg (milligrams) of THC and 1.8 mg of CBD in every piece.

The five-piece Tokyo Smoke Pause and Tokyo Smoke Go chocolates have 2 mg of THC in every piece. Both are dark milk chocolate. However, Tokyo Smoke Pause contains indica strain extracts, while Tokyo Smoke Go contains sativa extracts. Tokyo Smoke Go also has the lowest CBD content. This feature could prove to be a unique selling point for Tokyo Smoke Go on the back of FDA warnings about probable risks associated with CBD.

In the second wave of launches, CGC plans to launch Tokyo Smoke Ease CBD by late January 2020 and Bean & Bud by the end of February 2020. Each Bean & Bud package is set to contain two chocolate medallions, with 5 mg of THC per medallion. This 70% dark chocolate uses single-origin Zorzal cocoa.

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Focusing more on the beverages segment

Constellation Brands’ (STZ) 5 billion-Canadian-dollar investment has played a pivotal role in gearing CGC toward the cannabis-infused beverage segment. On November 22, Canopy Growth secured an operating and storage license from Health Canada for its Ontario-based 150,000-square-foot beverage facility. The facility became operational on November 25. Here, CGC benefited from STZ’s expertise in various areas of beverage products, such as building, equipment design, and staffing requirements.

Canopy Growth plans to launch 11 beverages in the first wave of the Cannabis 2.0 launch, and additional cannabis-infused beverages throughout 2020. All of these beverages are to contain cannabis distilled from cannabis flowers. The company is using distilled cannabis as an active ingredient to develop THC- and CBD-infused beverages. CGC aims to introduce cannabis-infused beverages across flavor profiles, brands, onset times, and serving sizes. This strategy should enable the company to cater to various consumer segments.

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The company has laid out a detailed plan for launching Cannabis 2.0 beverages

According to its December 6 press release, CGC plans to launch three flavors of Tweed RTD (ready-to-drink) beverages by early January 2020. CGC is set to introduce Tweed RTD drinks in the Houndstooth & Soda, Houseplant Grapefruit, and Houseplant Lemon flavors. Canopy Growth also plans to launch other Tweed beverages in late January 2020. These beverages are to be available in the Penelope & Tonic and Bakerstreet & Ginger Ale flavors.

According to Canopy’s November 27 press release, Tweed RTD beverages will come pre-mixed with distilled cannabis in 355 ml (milliliter) cans. Every can of Tweed Penelope & Tonic is to contain 2 mg of THC and 1.5 mg of CBD. Tweed Bakerstreet & Ginger Ale and Tweed Houndstooth & Soda are set to contain 2 mg of THC per can.

Additionally, Canopy Growth and Houseplant founders Seth Rogen and Evan Goldberg have collaborated to develop Houseplant Grapefruit– and Houseplant Lemon–flavored cannabis-infused beverages. These are to be available in 355 ml cans containing 2.5 mg of THC.

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According to its December 6 press release, CGC also plans to launch its Quatreau and Deep Space beverage brands in late January. The company is targeting the low-calorie, wellness-focused beverage segment with its Quatreau brand. This brand comprises naturally flavored sparkling water beverages. Quatreau Cucumber & Mint and Quatreau Passion Fruit & Guava are to have higher CBD content, with 20 mg per can. Quatreau Ginger & Lime and Quatreau Blueberry Acai are to contain 2 mg of THC and 2 mg of CBD per can.

CGC’s Deep Space brand is catering to consumers who want a stronger cannabis-infused beverage. Available in 222 ml cans, this RTD carbonated dark-colored drink contains 10 mg of THC per can. Its THC concentration is the highest amount currently permitted by Health Canada.

CGC to launch distilled cannabis spirits in early February 2020

Canopy Growth plans to launch 150 ml bottles of its proprietary clear cannabis liquid, Tweed Distilled Cannabis, in early February 2020. According to its November 27 press release, the company is offering the product in 150 ml cans to target the beverage mixer segment. Consumers will have the flexibility to control their serving amount by drinking the product on its own or by mixing it with non-alcoholic beverages. CGC is offering Tweed Distilled Cannabis in the Penelope, Bakerstreet, and Houndstooth flavors. Penelope-flavored bottles are to contain 10 mg of THC and 7.5 mg of CBD. Each bottle of Bakerstreet- and Houndstooth-flavored distilled cannabis will contain 10 mg of THC.

Canopy Growth is gearing up to launch Cannabis 2.0 vape products

According to its December 6 press release, CGC anticipates launching its vape cartridges and associated rechargeable batteries in late January 2020. Additionally, the company is focusing on launching a 510-thread vape pen or battery and other 510-thread-compatible devices. These products currently account for almost 75% of vape extract sales in California’s and Colorado’s markets. The company plans to launch these products under the Tweed, Twd., and Van Der Pop brands. Subsequently, CGC plans to launch an advanced Juju Joints line of products.

Canopy Growth aims to ensure the safety of its vape products by obtaining UL 8139 certification for all products. This voluntary industry standard assesses vaping devices for lithium battery hazards and electrical, heating, battery, and charging safety.

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