Companies in this vertical offer health and wellness products containing cannabis and/or hemp. Generally, these products are formulated with an intent to encourage health benefits or to promote self care.
The pursuit of wellness drives many elements of cannabis consumption. For example, relaxation, pain management, and anxiety reduction rank among the top reasons why people use cannabis1. Data shows that wellness products have a greater appeal to those that intend to, but do not currently use, cannabis2. This vertical may attract a new demographic to cannabis products, giving wellness products an opportunity to develop brand loyalty among new consumers.
Regulatory changes are also helping to drive growth in this segment. In the U.S., for example, the legal status of hemp-derived CBD has opened up previously closed mainstream retail channels for certain products. From a retail perspective, CBD products also tend to command higher prices than non-CBD cannabis products3.
We anticipate that this vertical will continue to experience steady growth, especially as research around lesser-known minor cannabinoids and terpenes paves the way for new products.
We think successful wellness brands will offer products in subcategories that are popular among CBD customers. Non-inhalable CBD products such as topicals, tinctures, sublinguals, beverages, and edibles have had rising sales in recent years3. We also expect that the brands who come out on top will build an omni-channel distribution network and market their products around consumer needs.
1Source: New Frontier Data, “Cannabis Consumer Report: Archetypes, Preferences, and Trends” (2019)
2Source: Deloitte - “Nurturing New Growth - Canada Gets Ready for Cannabis 2.0” (2019)
3Source: Headset, “Understanding the CBD Market in State-Legal Cannabis” (2019)
4Source: Global Wellness Institute, “Global Wellness Economy Monitor” (2019)
Note that this statistic relates to the broader wellness vertical, and not the cannabis-focused wellness vertical.
5Source: BDS Analytics, “The Global Cannabinoids Market: Will CBD overtake THC?” (2019)
6Source: Cowen Research, “Cowen’s Collective View of CBD” (2019)
This is not an offer to sell or a recommendation to trade in any securities. This information is provided as of the date hereof. This document contains data obtained from third parties that Canopy Rivers has not independently verified. This document also contains forward-looking information within the meaning of Canadian securities law, which is based on certain assumptions. While management believes these assumptions are reasonable based on information available as of the current date, they may prove to be incorrect. Many assumptions are based on factors outside of Canopy Rivers’ control and actual results may differ materially from current expectations. Forward-looking information involves risks, including, but not limited to, the risk factors set out in Canopy Rivers’ most recent Management’s Discussion and Analysis and Annual Information Form. You should not place undue reliance on forward-looking information. Except as required by applicable law, Canopy Rivers assumes no obligation to update or revise any forward-looking information to reflect new events or circumstances.
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