Cannabis Sales in Canada Fall Short of Forecasts in First Year of Legalization

Article by David George-Cosh, BNN Bloomberg

COMMODITIES Marijuana 22m ago Pot sales in Canada fall short of forecasts in first year of legalization By David George-Cosh People look at products inside Spiritleaf, the first cannabis store in Kingston, Ont., on Monday April 1, 2019. , Lars Hagberg

Nearly $1-billion worth of legal cannabis was sold in Canada during the first year of legalization, short of analysts’ initial projections, according to a study published Wednesday by Statistics Canada.

StatsCan said that $907.8 million of legal cannabis was sold between the last two weeks of October 2018 and September 2019 through both brick-and-mortar and online stores, with Ontario leading the country with $216.8 million in total sales. Alberta, which holds the highest number of physical cannabis retail outlets in any province, recorded $195.7 million in sales in the first year, StatsCan said.

The sales figures are well below some of the forecasts that analysts put out ahead of the launch of legalization in Oct. 2018.

Deloitte said Canada’s legal cannabis industry would grow to as much as $4.34 billion in the first year of legalization, and that the majority of purchases would be made through the legal market rather than illicit sources. However, earlier StatsCan data shows that the illicit market still represents between 70 and 80 per cent of all cannabis sales in the first year of legalization. Meanwhile, Brightfield Group, another research firm, projected that Canada would sell US$1.2 billion of cannabis in the first 14 months of legalization, including the last two months of 2018.

The country’s national statistics agency also said that as of July, there were 407 cannabis stores across the country, nearly double the amount that opened four months earlier. That increase in store count showed that the average distance between Canadians and the nearest cannabis store was 34 kilometers in July, nearly half the distance StatsCan observed in March. There are 542 cannabis stores in Canada as of this month, according to Cowen & Co.

As of July, 45 per cent of Canadians lived within 10 kilometres of a cannabis retail outlet, while about one-fifth lived within three kilometers, according to StatsCan. In Ontario, where there are only 24 legal cannabis stores open, only 33 per cent of consumers live within that 10-kilometre range.

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