Article by The Leaf News
Canada’s legal cannabis market will grow at a more leisurely pace than previously expected over the next five years, according to an influential cannabis market data firm.
Total Canadian consumer spending on legal medical and non-medical cannabis will hit US$5.2 billion in 2024, according to a new report from U.S.-based BDS Analytics and Arcview Market Research. (The entire report uses U.S. dollar figures, but US$5.2 billion is about $6.9 billion Canadian dollars.)
That prediction represents a more conservative forecast than past ones, BDS Analytics managing director Tom Adams writes in the report. Factors that contributed to the downgraded forecast include the delay of legalization from last summer to last October, limitations on the number of physical cannabis stores, complicated supply chains, and the continuing prevalence of the black market.
The number of licensed stores at the outset of legalization represented only “a drop in the proverbial bucket compared to the hundreds of ‘gray’ market unlicensed stores primarily based in British Columbia and Ontario,” explains the report.
On top of that, BDS Analytics expects growth in the legal cannabis market will be temporarily hampered by the absence of certain product forms, such as concentrates. “Languid online distribution” of legal cannabis is another factor that could be slowing down sales.
But as those holdbacks disintegrate, consumer spending in Canada’s legal recreational cannabis market will grow at a compound annual growth rate of about 87 per cent from US$569 million in 2018 to US$4.8 billion in 2024, the report says, while predicting spending in Canada’s medical cannabis to decrease over that same timeframe, from US$457 million in 2018 to US$381 million in 2024.