CBD

US vs. Canada: CBD Regulations & Its Impact on the Markets

Matt Zehner

Despite having a close relationship and sharing the longest border in the world, the United States and Canada have very different regulations for CBD products. While the US treats CBD as distinct from high-THC cannabis (though guidelines have yet to be cemented for CBD supplements and edibles), CBD in Canada is regulated identically to all other cannabis items. 

CBD's Impact on the US and Canada

Many Americans who are interested in natural wellness products may be able to stop by their local pharmacy or chain retailer in order to purchase their desired CBD products. It is not quite that easy in Canada. As described in the Cannabis Act, if a Canadian consumer would like to purchase some THC-free cannabidiol, they would still have to go to a licensed cannabis dispensary or make their purchase through one of the online provincial storefronts.   

  

The result? CBD has yet to hit the Canadian mainstream. Stores which carry CBD products dedicate very little shelf space to them, instead focusing on displaying high-THC products which cater to the experienced cannabis user who is disproportionately present on the legal market as compared to new consumers. The budtenders who work in these retail locations tend to steer their customers towards the high-THC products, further reinforcing their dominant status in the market. Segments of the consumer base who might purchase such items are often wary of going to dispensaries because of their association with THC products of which they may be wary or hold negative sentiments. Placing CBD alongside THC implies to the consumer that they are comparable products, while placing it alongside natural supplements and wellness items, like in the United States, instead gives the image that it might be beneficial for one’s health. 

  

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The effects of these regulatory decision can be felt in how well different categories of items sell in each country. In the United States during fiscal year 2019, sales of CBD reached nearly 37% of the total cannabis sales across the nation. In Canada during the same time frame, the dollar value of CBD-only product sales did not even constitute 10% of the sales across the country. Brightfield anticipates that, due to its wider distribution, US CBD will continue to grow at a faster rate than US cannabis, with many potential consumers able to find CBD products in stock at convenient standard retail locations close-to-home. 

Until Health Canada decides to change its regulatory scheme for CBD, which the government has indicated  they are open to doing,  a significant consumer segment of the Canadian CBD market will be unlikely to go through the effort to purchase these wellness products. Though CBD edibles and drinks may draw in some who were wary of purchasing flower or tinctures, the vast majority of potential users seem to  prefer to stay home and wait, as opposed to going down to their cannabis dispensary to look for CBD products. Meanwhile, Aging Ailers in the United States will come across cannabidiol oil in their local natural foods store while shopping for groceries and will purchase a bottle. 

 

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Last Updated: 3/5/2020