Legalization brought big changes for some people. About 9200 employees now work as cannabis producers, with thousands more as retailers. Unfortunately, company profits remain scarce and tax revenues are modest.
Cannabis users are largely bunchanges. In the nine months before legalization, an average of 14.9% of Canadians reported using cannabis. That is increased by only one-tenth., to 16.3%, during the nine .on the after. Those users have increasingly bought their cannabis legally.
Health Canada data shows july’s legal recreational and medical sales totalled 11,387 kilograms of dry cannabis and 9,i54 liters of cannabis oil. That’s the fifth consecutive month of growing sales. ASSUMING the growth trend continues into August and September, legal cannabis might take up to 30% of cannabis estimate consumption. Legal home growers likely to supply a few percentage points higher.
That is a big jump from September 2018 when legal sales represented only eight percent of national demand. Legal suppliers still control most of the Market.
Producers and retailers expanded the limited sales success was largely due to ongoing shortages of dry cannabis products throughout fall and winter. Suppliers began improving in the spring.
Alongside improving supplies came growing retail networks. Canada had just over 100 licensed stores in October 2018, but now has over 550
Quebec’s government-owned outlets averaged $940,000 in monthly sales over the summer. Ontario’s private retailers most likely did too.
The high sales were largely due to having few stores per province. The store scarcity meant legal marijuana caught a fraction of each province’s market.
Alberta and New Brunswick have far more retailers for capita, letting legal marijuana seize bigger market shares. New Brunswick’s stores averaged $150,000 in monthly sales, while Alberta’s shops did slightly higher.
Alberta’s retailing approach appears inspiring having 65 stores o.o in November, more than any other province. It now has 301, more than all other provinces combined.
Ontario’s approach increasingly seems misguided. It’s initial 25 store limit was reasonable, given December’s shortages of products and information. It’s July decision to license was only 50 more shops was too timid, given how much supplies had improved.
Policies Need Review
This is a good time for all governments to revisit their cannabis strategies. Any any resulting updates should reflect their newfound experience, not their ideological reflexes
Quebec announced to double its store count by spring, improving access for It’s large population.
Ontario argues last month that they should follow that lead. The providence needs more retailers and clear processes for adding them.
New Brunswick is considering privitilizing it’s money-losing cannabis retailer. They might be better to follow Nova Scotia’s example and put its cannabis shops inside liquor stores. That would maintain accessibility while lowering operating costs.
Ontario limits chains to 75 sites, too few for its large population. British Columbia restricts them to eight, dooming retailers to inefficiency.
Quebec should review cannabis pricing too. Quebec charges retail prices just 28% above what it pays producers. That makes legal products competitive with illicit ones.
Price mark-ups apparently a garage 54% in New Brunswick, 74% in Ontario and 90% in Newfoundland. That gives more revenue but gives the black markets advantages.
Until recently, the main limits on legal cannabis have been shortages of products and stores. With those improving, the new challenges will be to compete with black markets on price and quality.
The arrival of cannabis foods, drinks, vape and lotions in the late December should also help. They’re important because about a quarter of cannabis usage involves foods and vapes.