What Can Beverage Companies Learn from Canada's Cannabis Journey?

learning from canada's cannabis industry for beverage companies

An Interview with Sharan Sidhu, CSO & Regulatory Affairs, Pacific Rim Innovations

The global legal marijuana market is expected to reach USD 66.3 billion by the end of 2025, according to a 2019 report by Grand View Research, Inc. As countries and companies strategize to approach this opportunity, many are looking to Canada as a case study when it comes to cannabis. 

In 2018, Canada became one of the largest countries to federally legalize recreational cannabis nationwide. Medical marijuana has been legal in Canada since 2001. As the world watches, the country is wading through the opportunities, risks, and regulations that come with legalizing what could become one of the world’s most lucrative cash crops. 

Sharan Sidhu, CSO & Regulatory Affairs at Pacific Rim Innovations, a Canadian research and development facilitator that provides formulation technologies to consumer brands, walks through the developments and roadblocks Canadian beverage companies have encountered when it comes to cannabis. She also shares insights for people outside of Canada as they prepare for the future of cannabis beverage products in their countries and markets.  

What has the Canadian government has done well during this time of change for the cannabis market? What do you think they could have done better? 

Canada has recognized that change is coming and the need for a proactive approach to begin eliminating the black market. They are ensuring quality and safety are built into the regulatory system at a federal level and have moved quickly to organize around product quality, packaging, and labeling, etc.

Some of the regulations have aired on the more cautious and risk-averse side, which makes it more difficult for companies, but there isn’t a lot of scientifically valid data or studies available on consumption in a healthy population to help push back. The regulations surrounding branding and packaging have been especially restrictive for companies to navigate, but brand holders are finding creative ways. 

What are some of the formulation challenges beverage companies need to address when working with cannabis? 

THC and CBD are hydrophobic and beverage products that are water based can be problematic. Health Canada has stipulated that cannabis products must be shelf-stable at room temperature. Achieving shelf-stability for a beverage for an extended period without separation or degradation of cannabis ingredients is a challenge that our plant chemists have been working on for quite some time before they were able to solve it using propriety methods that do not involve nano emulsification or ultrasonication technologies.  

Another challenge is securing raw materials that meet the stringent licensing requirements implemented throughout the entire supply chain. Sourcing is especially tricky for companies who are trying to formulate without a license. If you’re not working with cannabis materials that come from a legal source, you will not be able to use those ingredients in your final formulation if you want it to be approved for legal sale in the future. The compatibility of THC and CBD with other ingredients is also a challenge when you need to maintain solubility and heterogeneity of the finished product over time. 

What steps can companies in countries without a defined path to legalization do now, while they wait? 

There are ways to start product development with companies in countries that can develop and distribute products legally. It is possible to white label a product that is licensed and approved for sale in Canada. Although you can’t send that product to other countries, you can get started within the Canadian market and strategically expand from there.  It takes a lot of research and development and paperwork to build a compliant product, but there are ways to partner with companies who’ve already done the work to get to market faster. 

What do you think the next steps are for Canada to keep moving the cannabis market forward? 

The biggest weakness the market has is a lack of data. We need information on not only the safety and efficacy of ingredients and products but also on consumer uptake. It will be challenging to push successful products out into the market without the necessary data to ensure both the government and the consumer that the products are safe and beneficial. There is no quick fix, but we can keep exploring, experimenting, and collaborating to create new opportunities and build momentum.  

Want to learn more about cannabis and beverages? Check out this free, on-demand webinar: Beverage Categories and Governing Regulations presented by BevSource and Pacific Rim Innovations. 

Sharan Sidhu, CSO & Regulatory Affairs, Pacific Rim InnovationsAbout Sharan Sidhu, CSO & Regulatory Affairs, Pacific Rim Innovations
Sharan Sidhu is a seasoned professional that has spent the majority of her career helping brand holders take projects from concept to commercialization. She has a deep understanding of the impact of regulatory directives on product development and innovation and by applying regulatory rigor and scientific acumen she has successfully steered the development of safe, effective and high-quality products. She has bridged the gap between science and industry and has worked with several institutions and granting bodies. Sharan has served as a regulatory specialist for several industries including Cannabis, Natural Health Products, Foods, Cosmetics, Pet and Pest Management, is an advisor to many boards and assists with several industry associations.