Get Ready For Cannabis 2.0

One year ago, on October 17, 2018, Canada legalized marijuana for recreational use.

But that was only the first step.

Now we’re at “Cannabis 2.0.” This comes exactly one year later, on October 17, 2019. Cannabis 2.0 is when Canada will legalize edibles, drinks, vapes, plus a few other categories.

The idea with the Canadian plan was to go about legalization in steps.

The first step of legalization, Cannabis 1.0, unleashed a “green rush” as shares of cannabis stocks soared. The business of getting high was making new highs nearly every day.

Frankly, it got out of hand. The rally soon went bust, and many marijuana stocks tumbled back to earth. Shares of Tilray (TLRY), to use one example, went from $20 to $300.

Then back to $20.

So now that Cannabis 2.0 is here, will we see another explosive rally? My first bit of advice is to slow down. The Canadian law means that on October 17, companies are allowed to file a notice with the government that in 60 days, they’re going to bring new products to the market. (Funny how legalization means bureaucracy and red tape.) So it won’t be until December that anyone can buy anything.

Let’s consider some numbers. Deloitte estimates that the annual market for edibles and alternative cannabis products is worth C$2.7 billion. Of that C2.7 billion, C$1.6 billion is just for edibles, and remember, this is only for Canada.

The key here is breaking down the market. The first wave of legalization was happy news for regular users of marijuana, but the unknown factor is how many occasional users there are.

In addition to that, there could more consumers who have never tried marijuana before due to its illegal status but might be lured in now that it’s legal. There’s been a lot of debate about these so-called “curious” users.

For these folks, they probably want to take baby steps first, and that’s why the edibles legalization is so important. For a person who never inhaled (and watched all their friends get stoned in college), trying a gummi bear might be an easy first step.

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