Quebec Bans Edibles: Will This Spur on Other Provinces?

Quebec Bans Edibles

The Canadian province of Quebec has announced a ban on edible cannabis products that could appeal to minors. While understandable for reasons of safety, the decision may have a drastic economic effect on the industry, which has been described as "caught off-guard."

Further, there are concerns that other provinces may now follow suit, leading some companies to rethink their edible products altogether.

Here's what we know.

Quebec Bans Edibles

The province announced on Thursday that it would ban cannabis-infused edibles such as candies, desserts, and chocolates due to their potential appeal to children.

Because of this, the ban could prevent some companies from selling their edibles in the province altogether.

The news comes only one month after Health Canada also announced that the kinds of edibles allowed to hit shelves in December would be "limited." Further, the body is clamping down on the packaging, saying it must be child-resistant and plain in design so as to lessen its appeal to minors.

Quebec Bans Edibles: Caught Off Guard

The upcoming legalization of cannabis derivatives has excited many companies that are preparing for the next arm of the cannabis industry. However, this most recent news has dampened spirits.

According to the press release:

"Some of the province’s cannabis advocates aren’t happy with the announcement. The Quebec Cannabis Industry Association (QCIA) condemned the new regulations in a press release on Thursday (July 25)."

The QCIA has complained that the new regulations were created “without industry consultation or economic impact analysis” and have caught the legal cannabis industry “off guard.

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The statement continues:

“It is a shot across the bow for all Quebec businesses and a warning to those interested in investing in the province that the regulatory climate is unpredictable and subject to change without consultation.”

Quebec Bans Edibles with Little Notice

The regulation has come at a time where so many cannabis companies have already designed or prepared their types of product.

For example, Canopy Growth Corp (TSX:WEED) (NYSE:CGC) has already made preparations to create up to 850,000 cannabis chocolates monthly. Similarly, industry giant Tilray (NASDAQ:TLRY) recently announced the acquisition of UK-based Smith & Sinclair in order to make cannabis-infused gummies and lollipops for distribution in Canada and the US.

While it remains unclear how much economic damage Quebec's regulation will incur, there is little doubt that it will have a knock-on effect of some proportion across the market.

Will there be sizeable damage done to Canada's alternative and edibles market, estimated to be $2.7 billion CAD per year? It remains to be seen.

If Quebec bans edibles, will other provinces follow? What do you think?

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