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For many Canadians considering investing in the legal cannabis industry, success seems uncertain. Since legalization on October 17, 2018, Canada’s cannabis sector has seen rapid changes. What trends can we identify? How has Canada, the first nation with federally legal cannabis, navigated this complex market? Opinions vary on the legalization’s impact, from medical access to curbing crime. Unlike the U.S., Canada has largely avoided federal legalization issues, though challenges remain. The cannabis landscape reveals deep regional divides and varied experiences. After over 390 days of legality, cannabis’s progress depends on perspective. Next, we’ll explore different cannabis categories and emerging trends shaping Canada’s marijuana markets.
CANNADIAN SNAPSHOT:
Cannabis Products in the Provinces & Territories
The popularity of cannabis in Canada mirrors its diverse users. Consumer preferences vary by region; for example, Quebec and BC favor flower, while Ontario and Alberta lead in concentrates. Each province has unique cannabis themes reflecting local economies and cultures. In BC, more individuals cultivate cannabis, which may explain lower retail sales than expected—personal growers supplement legal market issues with their access to cultivation.
BC’s Q3 2019 retail cannabis flower sales were just $2.5 million compared to Alberta ($15.9 million) and Ontario ($19.7 million), despite 830,000 users in the province. This suggests many may rely on growing their own or purchasing illicit cannabis. Exploring cannabis trends reveals challenges in understanding the market due to the absence of organized black market data, making reliable forecasts complicated.
Analyzing who produces cannabis and where is crucial. As of October 2019, Canada had 246 licensed producers, primarily in Ontario and BC. This represents growth, yet many applications remain unprocessed, indicating an imbalance in supply and demand. High prices and quality issues continue to affect the market, reflected by plummeting stock values among major companies like Aurora and Canopy.
Sales projections from previous reports, such as Deloitte’s $7 billion estimate for 2019, fall considerably short with actual sales reaching only $700 million by October. The disparity highlights failures in adapting to market conditions, leading to consumer dissatisfaction.
“Cannabis 2.0”
Looking ahead, “Cannabis 2.0,” including edibles and concentrates, may significantly influence the industry. As smoking declines due to health concerns, alternative consumption methods gain traction. However, increasing regulations, like Quebec’s ban on public vaping and higher age limits, complicate the landscape. Thus, challenges remain for the evolving Canadian cannabis market.
While it may seem pessimistic for the cannabis industry, challenges are expected when leading the way in a new field. The “curse of being first” affects those trailblazers setting standards for others. Canada, as the first G7 nation to legalize cannabis federally, faces these difficulties. Other countries like Australia, Mexico, and the EU look to Canada for guidance on legalization. Instead of following successful U.S. models like Colorado, Canada’s Liberal government chose to emphasize medical access and a public distribution model. However, government-run systems like the BCLDB have not gained public favor, leading many Canadians to shy away from legal cannabis due to high prices and quality issues, resulting in an estimated 80% continuing to buy from the black market.
These are major red flags for Health Canada and the Justice Department of Canada, because two of their primary goals for legalizing cannabis was to provide regulated, quality controlled, safe and clean cannabis while also wresting control from the criminal supply of marijuana (not to mention all the tax dollars that are being missed!). Still, having looked at a lot of the downsides of legal cannabis in Canada, there’s a lot of optimism filling the sails of the industry as it rides in the wake of Cannabis 2.0. Let’s shift our focus from how we got here and why to the current state of cannabis affairs and where we’re headed in the near future.
MAKING SCENTS OF CANNABIS TRENDS:
The Here & Now & Future
The fastest-growing cannabis consumer group is Seniors (65+), a welcome surprise for producers and policymakers. Current regulations favor this demographic, as they prefer government-regulated sources over illegal ones, and are significant medical cannabis users. Although only 7-8% of Seniors consume cannabis, this group has grown rapidly from 1% to nearly 10%, adding approximately 400,000 new users in the last 3-6 months. Many Seniors witnessed the evolving history of cannabis in Canada, shaping their views and medical needs. Over half (52%) use cannabis for medical reasons, contrasting with 60% of younger Canadians who use it recreationally. Notably, 27% of Seniors are new cannabis users, helping reduce stigma.
While over 5 million Canadians used cannabis in 2019, the percentage consuming legally rose from 10% in 2018 to 28% in 2019. As Canadians increasingly favor non-smoking medical cannabis options, the industry’s future looks promising. Data on cannabis use is evolving, and a strong illicit market persists due to supply and quality issues in legal markets. Despite these challenges, demand for cannabis products is high, making now a great time to invest in this burgeoning industry focused on health and sustainability.
FOR FURTHER READING…
Now is a great time to explore cannabis benefits and improve your life. The Canadian medical cannabis market is evolving, and its full potential will unfold over time. Understanding cannabis in Canada involves various factors, but resources are available to help you navigate it. Statistics Canada provides updated market data, and reading articles, journals, and news is crucial. We’ve also created an overview of key cannabis stats in Canada and a guide for online shopping to assist you.
To summarize, there’s a lot of opinions about cannabis in Canada so far, but we’ve got one final forecast for cannabis in Canada: it’s time to get growing, experience the benefits, and trust in the power of plants to improve your life in ways you never imagined. Cannabis surely can benefit you and your loved ones, and as long as we all continue to explore this plant and invest our time and dollars into its development, Canada will move forward as a world leader in freedom and prosperity.
