"I am a Canadian living abroad for work purposes and my loved ones to whom I wish to leave my entire estate are friends in Italy. I am single but I have living siblings but have not included them in any inheritance. Can I legally do this? Will my beloved friends be able to inherit my estate or will there be significant problems?"
Can you legally leave out your siblings? Yes, absolutely. You have no legal obligation to them whatsoever unless they are financially dependent on you for some reason. It doesn't matter who you choose instead of your siblings because your siblings simply have no right to your estate. You are free to choose your friends as beneficiaries.
This is the law in Canada. I have no idea what the law might be in Italy!
You said you are a Canadian living abroad, so I assume this means you have a permanent residence somewhere in Canada. You might want to consider making two wills - one here in Canada and one in Italy - depending on where your assets are located. If your assets are all in Canada, there is no need for a second will, but if you own a home or other significant assets in Italy you might want to make a will there as well.
This is because countries do not simply accept wills made outside of their borders. Laws, courts, language, customs, and processes are all different. You might be able to have a will re-sealed (more or less the equivalent of submitting it for probate) in another country, but there is no guarantee of that.
If you do make wills in both places, make sure the lawyers drafting them know about the other will so that they can be written in such a way that they do not revoke each other.
Your question is interesting because it asks me whether your friends will be able to inherit your estate. As I mentioned above, I am not familiar with inheritance law in Italy. They may or may not have limits (or more likely taxes) on bequests from other countries. In other words, I know you can leave it to them legally but I'm not in a position to say whether they can receive it without problems.