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According to a new report released yesterday by Arcview Market Research and BDS Analytics, Canadians spent $1.6 billion on legal cannabis in 2018. This is more than double the amount that was spent on medical marijuana in 2017.

The new report, The State of Legal Marijuana Market, found that despite the delayed legalization from the summer until October, Canadians still increased their spending on legal cannabis from $755 million to $1.6 billion, making it the third highest cannabis market in the world. According to Statistics Canada, Canada spent $5.7 billion on cannabis in 2017, most of which coming from the black market.

The report estimates that Canada’s legal cannabis market will reach $7.8 billion by 2022, which would allow Canada to surpass California as the top legal cannabis regime in the world. Recreational cannabis is predicted to greatly overtake medical cannabis sales, but the medical marijuana market is estimated to still generate $1.4 billion in revenue by 2022. The amount of Canadian adults who consume cannabis increased from 21 percent to 25 percent in the last six months, according to the report.

The global legal cannabis market is predicted to reach $41.9 billion by 2022, with two thirds of that being from recreational cannabis sales. To compare, the report claims the black market in North America alone is already worth double that amount.

Managing director of BDS Analytics, Tom Adams, says one of the top things to look out for in Canada in 2019 will be the instatement of the retail systems.

“The opening of stores in Ontario is a critical thing,” Tom Adams told VICE.

Ontario is supposed to be opening 25 privately-owned retail stores, which is being decided by lottery on April 1, 2019. The Canadian government claims the 25-store cap is a response to the nation-wide cannabis shortage- but this cap could be lifted by the end of the year.

Tom Adams says that Canada’s strict restrictions around the packaging and marketing of cannabis- to deter appeal to young adults- will weaken sales. He says that testing and quality requirements for cannabis products are, “off the chart compared to anything else that consumers consume.”

“It’s going to take a while to get rid of those. The faster Canada can do that … the faster the illicit market will disappear.”

California is on track to see downturn in spending from $3.9 billion in 2017 to $3.3 billion in 2018, after legalizing recreational cannabis last year. This has made it the first legal cannabis market to see shrink after shifting from medical to recreational. This is due to the fact that the state has made 21 the legal age to purchase and consume cannabis and because it allows certain jurisdictions to opt out of having sales- which many smaller cities chose to.

Tom Adams told VICE that Canadian licensed producers currently have the chance to become “worldwide cannabis powerhouses.” The report found that five of the publicly traded licensed producers in Canada were valued at a total of $26.5 billion at the end of 2018.

Source: https://www.vice.com/en_ca/article/439kg3/canadians-spent-dollar16-billion-on-legal-weed-in-2018-report

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