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Strategy Briefing

Legal Cannabis and the Tobacco Industry: Seeing the Buds for the Weeds

58 pages, Dec 2017

US$1,325

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About This Report

New Report Guarantee

If you purchase a report that is updated in the next 60 days, we will send you the new edition and data extract FREE!

The tobacco industry has often been linked with a move into legal cannabis (largely without much substance in reality). However, in the context of a declining market for its core product and increasing acceptability of cannabis as a mainstream consumer product could such a move provide the industry with a continued stream of revenue into the medium and longer term?

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Overview

Why buy this report?

Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.

Meet the consumers where they will be

There are currently four times as many smokers as cannabis users in the world. However - particularly in developed markets - use of cannabis is soaring while tobacco use plummets. The tobacco industry must secure future revenue streams and legal cannabis offers a legitimate opportunity.

From North America to the world?

While cannabis decriminalisation and legalisation initiatives are currently primarily focused on the US and Canada, their relevance will be international through setting up regulatory frameworks, providing branding, positioning and distribution benchmarks, and spearheading innovation. North American companies are already in the vanguard of developing the global market.

Rest of the world mainly medical (for now)

The lack of federal regulation in the US means that tobacco companies will be looking in the meantime at international markets. Canada offers a clear opportunity, while in the mid-term Europe will become the world’s largest market through the legalisation of medical marijuana.

Rise of the non-flowers form factors

The flower format, combusted has been the traditionally dominant delivery mechanism for cannabis both in the US and internationally. However, in a scenario analogous to the shift to vapourised nicotine, more and more cannabis consumers are looking to alternatives – such as edibles, beverages and yes, cannabis vapourisation.

Several options open to curious tobacco actors

Entry into legal cannabis would not be without legal, reputational or competitive challenges for a tobacco company but in this context there is - so to speak - more than one way to skin up a joint. Companies can increasingly engage substantively with the market without full plant-touching involvement.

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Introduction

Scope

INTRODUCTION

Key findings

introduction

Cannabis background

Legalisation timeline

Tobacco context: looking for room to manoeuvre

Diverging user population trends parses the conundrum

Barriers to legal cannabis entry for the tobacco industry

Green Tide Rising: Market & Category Context

Geographic and category evolution

North America the major focus in near term

Green shoots: mapping out the US

California is the largest coherent global market

Canada: the roadmap to a multibillion dollar market

Europe: centred on medical

Rest of the world: pockets of growth, continuing opposition

Forecasting the future

Key future geography and category focus areas

Regulation and Supply Chain: Green Rush or Lockdown?

What is the current US legal landscape?

Lack of federal legalisation holding up the tide in the US

Current regulatory models US: tiers and integration

REGULATION AND SUPPLY CHAIN: GREEN RUSH OR LOCKDOWN?

Colorado and Washington demonstrate differing approaches

A restrictive regime likely in Canada

Proposed Canadian supply chain will mirror existing medical model

Likely models of global regulation

Similarity to tobacco regulation may provide competitive advantage

Overview of the US (and likely wider) supply chain

Cultivation will need to significantly expand (largely indoors)

But processing is more profitable than growing

Tobacco Implications: Beyond Cliché

Tobacco and marijuana: demon and demoner ?

Competing or complementary ?

Tobacco industry threats and opportunities

Major tobacco company cannabis activity past and future

The language of tobacco is not widely spoken in legal cannabis

Vapourisation is tobacco’s obvious gateway to cannabis

Companies and innovations: The Path Ahead

Leading companies forging a trail, offering targets

Canopy Growth Corp: one of the world’s largest legal companies

Dixie Elixirs: a model for national scale in restricted environment

PAX Labs: present in both nicotine and premium cannabis

Terra Tech: vertical integration with full lifecycle exposure

Aurora: on the verge of global leadership

Kush Bottles: a deeply embedded, non-plant-touching operation

Tobacco relevant cannabis innovations

A model for future product development

Executing a more traditional offering, with style

Crosspollination and embracing coopetition

Medical marijuana innovation with mainstream potential

An elegant twist on the cliche

A one stop shop for cannabis, nicotine (and tobacco?) consumption

Conclusions

Definitions

Project definitions

Project definitions (1)

Project definitions (2)

Why buy this report?

Want to find out more about this report?

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Megatrends

Strategy Briefing

Legal Cannabis and the Tobacco Industry: Seeing the Buds for the Weeds

New Report Guarantee

About This Report

New Report Guarantee

Overview

Why buy this report?

Meet the consumers where they will be

From North America to the world?

Rest of the world mainly medical (for now)

Rise of the non-flowers form factors

Several options open to curious tobacco actors

Want to find out more about this report?

Table of Contents

Introduction

Scope

INTRODUCTION

Key findings

introduction

Cannabis background

Legalisation timeline

Tobacco context: looking for room to manoeuvre

Diverging user population trends parses the conundrum

Barriers to legal cannabis entry for the tobacco industry

Green Tide Rising: Market & Category Context

Geographic and category evolution

North America the major focus in near term

Green shoots: mapping out the US

California is the largest coherent global market

Canada: the roadmap to a multibillion dollar market

Europe: centred on medical

Rest of the world: pockets of growth, continuing opposition

Forecasting the future

Key future geography and category focus areas

Regulation and Supply Chain: Green Rush or Lockdown?

What is the current US legal landscape?

Lack of federal legalisation holding up the tide in the US

Current regulatory models US: tiers and integration

REGULATION AND SUPPLY CHAIN: GREEN RUSH OR LOCKDOWN?

Colorado and Washington demonstrate differing approaches

A restrictive regime likely in Canada

Proposed Canadian supply chain will mirror existing medical model

Likely models of global regulation

Similarity to tobacco regulation may provide competitive advantage

Overview of the US (and likely wider) supply chain

Cultivation will need to significantly expand (largely indoors)

But processing is more profitable than growing

Tobacco Implications: Beyond Cliché

Tobacco and marijuana: demon and demoner ?

Competing or complementary ?

Tobacco industry threats and opportunities

Major tobacco company cannabis activity past and future

The language of tobacco is not widely spoken in legal cannabis

Vapourisation is tobacco’s obvious gateway to cannabis

Companies and innovations: The Path Ahead

Leading companies forging a trail, offering targets

Canopy Growth Corp: one of the world’s largest legal companies

Dixie Elixirs: a model for national scale in restricted environment

PAX Labs: present in both nicotine and premium cannabis

Terra Tech: vertical integration with full lifecycle exposure

Aurora: on the verge of global leadership

Kush Bottles: a deeply embedded, non-plant-touching operation

Tobacco relevant cannabis innovations

A model for future product development

Executing a more traditional offering, with style

Crosspollination and embracing coopetition

Medical marijuana innovation with mainstream potential

An elegant twist on the cliche

A one stop shop for cannabis, nicotine (and tobacco?) consumption

Conclusions

Definitions

Project definitions

Project definitions (1)

Project definitions (2)

Why buy this report?

Want to find out more about this report?

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