Canada’s legal cannabis industry is good at producing cannabis products. In fact, it’s likely a bit too good at producing such products. Canada first legalized cannabis for recreational use in October 2018, and by August 2020, companies in Canada already had an excess of roughly 600,000 kilograms of unpackaged dried flower and 46,413 more kilograms of packaged flower.
Initially, industry observers hoped that it was just indicative of a transitioning market with customers shifting from unregulated sources to regulated sources, and that demand would eventually catch up with supply. However, As time went on, the issue did not get better.
“Jumping ahead to the present, most product categories’ available inventory are exceeding retail sales by a ratio of more than 3-to-1, according to fourth-quarter 2023 data released May 14 by Health Canada. Seed supply exceeds unit sales by 2,280%.” stated Cannabis Business Times in its initial coverage. The outlet offered up the following production to sales ratios for cannabis product sectors:
- Dried cannabis: 3.4 to 1
- Edibles: 3.6 to 1
- Extracts: 3.7 to 1
- Seeds: 22.8 to 1
- Topicals: 6.4 to 1
Canada’s emerging legal cannabis industry sold C$414.1 million worth of cannabis products in March 2024, up 7.1% compared to February 2024. Canada continues to dominate the legal global medical cannabis export sector, with Canadian cannabis companies exporting a reported 218 million Canadian dollars ($189 million) worth of medical cannabis products to other nations in fiscal year 2023/2024.
According to data that was recently published by Statistics Canada, “In 2023, more than one-third of adults aged 18 to 24 years (38.4%) and 25 to 44 years (34.5%) reported using cannabis in the previous 12 months, compared with 15.5% of adults aged 45 years and older.”
Statistics Canada also found that 8.7% of adults aged 18 to 24 years and 10.3% of adults aged 25 to 44 years report consuming cannabis daily or almost daily.
Additionally, “over two in three” cannabis consumers bought their cannabis from regulated sources according to government data. Statistics Canada estimates that the nation is home to “more than 3,000 legal cannabis stores.”
According to survey data, Statistics Canada found that “the main reasons reported for buying cannabis from a legal source were product safety (38.0%), convenience (16.9%) and a desire to follow the law (12.9%).”
Cannabis flower is the top selling product in Canada’s legal market, accounting for 64.9% of total industry sales. Total sales of recreational cannabis by provincial cannabis authorities and other retail outlets increased 15.8% in the 2022/2023 fiscal year, reaching a total of $4.7 billion in sales. The sales of ‘inhaled extracts,’ or concentrates, increased by 59% during the 2022/2023 fiscal year.
“Canadians of legal age spent on average $150 per year per person on cannabis in 2022/2023.” stated Statistics Canada.
Canada’s emerging legal cannabis industry is generating a consider sum for public coffers, which benefits all of Canadian society, not just cannabis consumers. Statistics Canada has determined that, “Federal and provincial governments received $1.9 billion from the control and sale of recreational cannabis in 2022/2023, up by almost one-quarter (+24.2%) from a year earlier.”