Canadian Cannabis Companies Seek Deals Ahead Of Legal Vaping Pens Sales

Canada is about to further expand its cannabis market. A year ago, Canada legalized cannabis for recreational use, becoming the first industrialized country to do so. Canada’s legalization of cannabis for legal use has been particularly a boom for Shopify (SHOP), which operates a platform for launching digital shops. Some of Canada’s biggest cannabis businesses chose Shopify to host their digital stores.

Now the Canadian cannabis market will become even larger as more cannabis-related products will soon become legal and go on sale in a few months. Regulations governing the sale of cannabis derivatives such as vaping pens in Canada will take effect from next week (October 17) in what is fondly called “Cannabis 2.0”. However, the sale of vape pens will legally begin in Canada mid-December.

According to Deloitte Deloitte estimates, the additional cannabis products that Canada is set to legalize have the potential of expanding the size of Canada’s legal cannabis market by C$2.7 billion annually.

Source: Deloitte

Canadian cannabis businesses preparing to reap from vaping pens sale

Vaping pens legalization in Canada is fueling the country’s cannabis market as cannabis businesses see an expanded revenue opportunity.

Last month (September), Cronos Group (CRON) signed a contract with MediPharm Labs (MEDIF) for a multiyear vaping device contract manufacturing deal. Last December, American big tobacco Altria Group (MO) purchased a stake worth C$2.4 billion in Cronos.

In July, Canadian cannabis company Auxly Cannabis Group partnered with British tobacco company Imperial Brands in a deal that Auxly says will boost its plans to expand in the recreational cannabis market. The deal will see Imperial Brands invest C$123 million in Auxly to support research and product development work. Additionally, the deal will give Auxly access to Imperial Brands’ vaping technology, which Auxly hopes will be useful to its vape pen business.

In June, Canadian cannabis companies Aphria (APHA), Aurora Cannabis (ACB), Organigram Holdings (OGI), and The Supreme Cannabis Company (FIRE) partnered with PAX Labs to jumpstart their entry to the vaping pens market in Canada when the action begins in the next few months.

Generally, the major Canadian cannabis companies are preparing to hit the ground running when legal sale of vaping pens finally opens in the country later this year.

Vaping injuries in the US threaten Canada’s vaping pens market

The US is facing a vaping crisis. The country is seeing a steady rise in vaping-related health injuries, particularly respiratory problems. The number of vaping-related health injuries in the US topped 1,000 cases as of early this month, from 805 cases a week before. And vaping related deaths in the US are now chasing a dozen cases.

The vaping ailments in the US have been linked to black market vaping pens. Canada is monitoring the situation in the US and hopes it will be able to avoid a similar crisis when vaping pens legally go on sale in the country in the coming months.

However, for Canadian cannabis businesses looking to cash in on vaping pens sales, the vaping crisis in the US threaten their prospects. There is a risk that Canadian authorities could hit the vaping pen market with more stringent regulations or even suspend vaping pen sales if the health concerns become serious.

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