This has been a big week for the marijuana industry. On Thursday, Oct. 17, regulations concerning cannabis derivatives — e.g., edibles, vapes, concentrates, topicals, and infused beverages — went into effect. Although consumers won’t officially see these products on dispensary store shelves until mid-December, it officially marks phase two of the marijuana legalization process in Canada.
This milestone event also comes on the one-year anniversary of the start of recreational marijuana sales in Canada. Retail stores opened their doors to adult-use sales on Oct. 17, 2018, with dried flower, cannabis oils, and sublingual sprays all fair game.
The big question is: How much marijuana did Canadians buy over the past year?
Here’s what we know from Statistics Canada, so far
The honest answer is that we don’t know yet, at least concretely. Statistics Canada, the agency that reports retail sales data for our neighbor to the north, usually releases this data around seven to eight weeks after a month has ended. That means we’re still waiting on cannabis store sales data from August, and it’ll be a while before we’re privy to data from September and October.
However, Yours Truly has been keeping tabs on reported cannabis store sales data since the green flag waved a year ago, through July. Here’s what things looked like through the first 9.5 months; data is reported in Canadian dollars (CA$).
- October: CA$53.68 million
- November: CA$53.73 million
- December: CA$57.34 million
- January: CA$54.88 million
- February: CA$51.66 million
- March: CA$60.94 million
- April: CA$74.58 million
- May: CA$85.81 million
- June: CA$91.46 million
- July: CA$104.5 million
All told, that’s CA$688.58 million in sales (about $524.2 million U.S.) since the ball dropped on legalized cannabis in Canada. But, as noted, 2.5 months of data isn’t included in this figure, albeit monthly sales in legalized stores have improved for five consecutive months.
Nevertheless, this didn’t stop one company from estimating how much cannabis Canadians bought in the first year following legalization.
A new analysis takes a stab at first-year sales and consumption data
Using existing data, Cannabis Benchmarks, a provider of financial data for the North American cannabis industry, has surmised that Canadians spent CA$1.1 billion ($837.5 million) on legal marijuana in the first full year of legalization. To put this into context, California alone is forecast to generate $3.1 billion in legal sales all by itself in 2019, although the Golden State’s population is larger than that of Canada.
Using data provided by Statistics Canada on per-gram prices for legal marijuana during the third quarter of CA$10.23 per gram, Cannabis Benchmarks estimates that approximately 105,000 kilos of cannabis were sold over the trailing 12-month period.
On one hand, that’s CA$1.1 billion in sales that cannabis companies didn’t have just a few years ago. But, on the other hand, Cannabis Benchmarks’ estimate, if accurate, would be a huge disappointment. After all, Canada is a country thought to have peak annual consumption potential of 924,000 kilos per year. If consumers only gobbled up 105,000 kilos over the trailing 12-month period, it means that the legal weed business is only operating/selling at 11.4% of peak efficiency. It’s also very worrisome when you consider that the aggregate peak production potential from the 15 largest growers in Canada will easily surpass 3 million kilos per year.
Furthermore, it suggests that black market marijuana is thriving in our neighbor to the north. The latest National Cannabis Survey from Statistics Canada shows that close to 50% of all consumers continue to illegally buy black market cannabis.