Canadians spend $908 million on legal cannabis in one year

Almost $1 billion has been spent on legal, non-medical cannabis in Canada during the first year of it being legalised, according to Statistics Canada.

The staggering numbers come after months of speculation and rumours that claimed the legal cannabis market in Canada was failing, with reports of the black market still being rife and companies suffering with oversupply issues.

However, the recent figures state that $907 million has been spent on legal cannabis, which equates to $24 per person.

According to the data, demand has actually continually risen throughout the year with citizens in one of the least populated regions in the country – Yukon – spending an average of $103 per person.

British Columbia bizarrely came at the bottom of the list, with $10 being spent per capita despite it being the cannabis growing capital of the country and one of the top most populated provinces. This perhaps demonstrates how there is still a demand for cheap weed that is purchased illegally.

Canada’s largest province in terms of population – Ontario – took the lead in total dollars spent on cannabis purchases with $216 million spent, and residents in Yukon kept the region at the top of the list of highest amount spent per capita, despite only having four bricks-and-mortar stores in the whole territory.

The number of dispensaries throughout Canada also rose, with 217 stores in March rising to a total of 407 in July as entrepreneurs attempt to capitalise on the emerging cash crop.

This did, however, lead to a reduction in online sales of cannabis, with online commerce dropping by 43.4% in October to 5.9% in September.

Alberta

The province of Alberta had the highest number of stores with 176, while Nunavut, the most northerly territory in Canada, had the lowest, boasting the title of being the only remaining territory that currently has zero cannabis stores.

As of July this year, nineteen percent of Canadians live three kilometres away from a cannabis store and forty five percent live within ten kilometres.

“While online cannabis retail ensures access to all Canadians regardless of proximity to a physical store, accessibility continues to improve as more stores open across the country,” wrote Statistics Canada in its paper.

Albertans ranked highest in most citizens living in close proximity to cannabis stores with around seventy percent of the population living within ten kilometres. The province also spent around $200 million on legal weed in the first year of legalisation earning it the title of the biggest per capita consumer amongst the larger provinces.

The success made from cannabis sales in Alberta has caught the attention of Canopy Growth – the world’s largest licensed cannabis producer. “Alberta’s done a great job in building a network,” said Dave Bigioni, the company’s chief commercial officer.

Each of the provinces have individual control over legal cannabis sales in their respective areas therefore regulations vary from place to place, which explains the differences between the various regions total and per capita sales. This could also explain why certain provinces have a significantly lower amount of cannabis stores as the regulatory steps to open a store may differ and be harder to establish or qualify for licenses in some territories.

Backfired

Cannabis was legalised in Canada on October 17 2018 and, in the early stages of legalisation, the demand for cannabis products far outweighed the supply, which subsequently led to retailers foreseeing a shortfall of product. To remedy this, they attempted to produce enough to meet demand. However, it backfired and led to potentially business destroying issues such as oversupply.

Jamie Burns, CEO of Alcanna, which operates Nova Cannabis stores said “if we went a year with a real marketplace, Alberta would have had 60 per cent of the country’s sales,” when talking about business potentially being far more lucrative if the supply problems hadn’t occurred during the initial phase of legalisation.

Despite initial demand starting high and wavering as the year went on, the total $908 million figure recently published still manages to fall short of the huge $4.34 billion which was initially projected for cannabis sales in Canada, which although includes medical cannabis, is still a far off estimate in comparison to the reality of actual sales.

Many predictions suggested that a vast number of current cannabis consumers would shift immediately from illegal to legal purchases, with some sources citing that nearly two-thirds (63 percent) of consumers would be opting to buy cannabis from bricks-and-mortar retailers or online stores, which ultimately ended up being a much smaller number due to an array of concerns, high prices and a low amount of retail stores being a few.

Medical vs recreational sales

In October 2018, Canada became the second country in the world to legalise cannabis after Uruguay. The laws now permit citizens over the age of 21 to purchase and consume cannabis without the risk of arrest or prosecution.

This has led to a surge in the recreational use of cannabis, with non-medical sales steadily rising from $30 million per month to $120 million per month.

While recreational use is steadily on the rise, medicinal use hasn’t seen as much of a surge with the majority of patients likely already having a prescription due to it being legal medicinally since 2001.

The Leaf Desk previously covered a feature on the debate between medicinal and recreational cannabis users, with medicinal users scrutinising those who consume it for pleasure in the United States as it alters the public perception.

The argument is that if cannabis is widely accepted as a recreational drug, it could re-create the stigma that the medical community has been trying to get rid of.

By doing so it could potentially cause lawmakers and regulators to make a hasty decision, thus leaving medical users of cannabis without their vital ailments.

This response has not yet become as prevalent as it is in the United States, where medicinal users often campaign against recreational legalisation as it could put their permit for medical use in jeopardy.