Since Canada became the first Group of Seven nation to legalize cannabis last year, employment numbers have nearly quadrupled, while the number of companies in the sector has more than doubled, a new Statistics Canada report shows.
The federal agency has been keeping a close watch on the cannabis industry and it reported Thursday there are 9,200 Canadians currently working in the country’s pot sector, up from 2,630 that were employed in the fiscal year of 2018 and the 1,438 in fiscal 2017.
As for the number of companies, Statistics Canada revealed there are now 175 operating in the cannabis space, climbing from the 83 the year before, and 37 in 2017. The soaring growth in competition could partly explain why industry captain Canopy Growth (TSX:WEED)(NYSE:CGC) has seen a decline in market share in the last few quarters.
The industry numbers come from Statistics Canada’s snapshot report of federally-licensed cannabis producers, which gathers data on employment, revenue, inventory and other financial figures over the past three years. When Canada legalized pot for recreational use last October a flood of new companies emerged to try to capture the demand in the newly formed industry and went on a hiring spree in the process.
At the end of 2018, total assets in the Canadian cannabis industry reached almost $4.2 billion, which nearly doubles the $2.5 billion from fiscal 2017/18 and is a massive jump from $704 million in fiscal 2016/17, the data shows. Investment spending also surged to $233 million in 2018, up from a meager $46 million the prior fiscal year.
Licensed producers sold 46 metric tonnes of cannabis in fiscal 2018 and had 39 metric tonnes of inventory at the end of the year. Their revenues increased 92 per cent in 2018 and a further 52 per cent so far this year, Statistics Canada said. Producers reported losses in all years the data was recorded.
Wages, salaries and employee benefits accounted for about 29 per cent of cannabis business expenses, while purchases of raw materials and other inputs represented just over one-quarter of costs. Other notable expense categories included marketing fees, energy and water, professional and business fees, and interest.
Meanwhile, about 60 per cent of those employed in the cannabis sector worked on cultivation, harvesting, processing, manufacturing and administration. Another 20 per cent were employed in packaging, marketing, sales and shipping activities. The remainder got paid for their work in quality assurance, research and development, security, engineering and general maintenance activities.
What has 30 hands, 15 pairs of scissors and always comes home with a unique (and delicious) smell? The trim room staff at Smiths Falls! They’re harvesting bud almost every day of the month. pic.twitter.com/YLxTGo987C
— Canopy Growth (@CanopyGrowth) July 25, 2019