Canadian Cannabis Sales Are Lagging – Here Is Why

Article by Jonathan Cooper, SeekingAlpha

Canadian Cannabis Sales Are Lagging - Here Is Why Jonathan Cooper Summary Canadian recreational cannabis sales have been flat since November. The Globe & Mail explains this is due to a shortage of cannabis stores, pointing to Colorado's slightly higher stores per capita. They are correct there is a retail store shortage, but stores per land area is much better correlated with cannabis sales per capita. Canada's best-selling province, PEI, has one-third as many stores per square kilometer as Colorado - and one-third the sales per capita. Canadian sales should begin to improve in April results, after Ontario opens its first retail stores.

Canadian recreational cannabis sales have been flat since November.

Each month, Stats Canada releases retail sales data across Canada for a wide variety of sectors including retail cannabis sales. Nationally, Canadians purchased $49.9 million of cannabis in February, down 9% from $54.9 million in January.

On an annualized basis, sales increased 1% from $646 million in January to $650 million in February. Annualized sales have been relatively stable since November 2018.

On a per capita basis, Canadians are spending about $17 per year on recreational cannabis. This is far short of projections from Deloitte prior to legalization, which suggested up to $1.8 to $4.3 billion in legal recreational cannabis sales in 2019. Even the low end of that range looks out of reach through February, although results should improve by April due to the launch of retail cannabis stores in Ontario, Canada’s largest province.

Read the full article here.

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