TORONTO: A U.S. recommendation that consumers avoid vaping products containing the active ingredient in marijuana ahead of their legalization in Canada next month could be a blow to Canadian cannabis companies' hopes that the higher-margin products will help propel them to profitability.
The Horizons Marijuana Life Sciences Index ETF has dropped 54per cent since its Oct. 16 peak, the day before adult recreational use of cannabis flower and THC and CBD oils were legalized. CBD does not contain the compound that gets people high. While a shift away from Canada's illicit cannabis vape market into legal dried flower is positive from a public health standpoint, prolonged uncertainty could hurt legal vape sales.
"In theory, it should promote the legal market," Zandberg said."But if you don't have very aggressive education behind these products, a good portion of the population doesn’t see the difference." "The Canadian government should come out as soon as possible one way or other and either double down on vape products or remove them from the derivatives market. You have to give the industry clarity," said Brett Hundley, a cannabis analyst at Seaport Global.
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