DataRetailStats Canada Update: What the Numbers Tell Us About the Cannabis Industry

Last week, a report from Statistics Canada came out suggesting that despite the hype surrounding legalization, we haven't seen a whole lot more cannabis use. Let's break down the results and see what they tell us about the industry.
David Jagielski David JagielskiFebruary 12, 20196 min

Last week, a report from Statistics Canada came out suggesting that despite the hype surrounding legalization, we haven’t seen a whole lot more cannabis use. Let’s break down the results and see what they tell us about the industry.

Still only a small segment of the population that uses cannabis

Only 15% of Canadians over the age of 15 were reported as using marijuana during the last three months, which is consistent to the percentage that existed prior to legalization. However, 19% are expected to use it over the next three months, so there is a sign that demand might be increasing, although it is still very modest at best. The wild growth that many were expecting for the industry may not be realized if these numbers remain consistent.

However, given that many retailers still cite supply issues as a big concern suggests that it may be poor planning from growers and producers that has led to many of the issues that the industry is having. Given that sales numbers for November weren’t a whole lot higher than partial month of October, it’s hard to prove that demand has really been all that strong, outside of perhaps a few regions.

Don’t expect a lot of new users or a big change in activity

More than half (55%) of Canadians said that they had never used the drug and 98% of those that never have don’t expect to start during the next three months. Meanwhile, more than 80% of those users that use cannabis on a daily or weekly basis don’t expect their frequency of cannabis use to change. I’ve never been a believer that legalization of marijuana was suddenly going to open the doors to more cannabis users, especially recreationally. If someone wanted to use cannabis in Canada, it’s not as if the legality of it was a big obstacle.

Even prior to legalization we saw large groupings of people on Parliament Hill smoking cannabis or outside of the Vancouver Public Library. The fact of the matter is that enforcement often turned a blind eye to cannabis use (transporting or growing is a much different story, however) and so if someone wanted to try it, that wasn’t going to be a big deterrent for someone that was curious to try the drug.

Safety the biggest consideration on where to buy

Many cannabis users use cannabis for its medicinal benefits, and so it’s no surprise that when deciding where to purchase pot from, 76% of users said that quality and safety was a factor. With so many different strains of cannabis and different levels of tetrahydrocannabinol and cannabidiol, it wouldn’t be very difficult for someone to obtain a different form of cannabis than they were expecting. And that could have devastating results.

The black market is still a big player

Despite the government’s hope that black market sales would flow through to legal channels, Stats Canada’s data suggests that isn’t happening just yet. Only 26% of recreational cannabis users said they obtained it through authorized retailers or licensed producers. By comparison, 86% of medicinal users that had documentation opted for the legal market, which is consistent with concerns about safety and quality.

However, it’s not just the black market that users are obtaining cannabis from. Recreational users obtained the majority of their cannabis (54%) from friends and family, which is now a greater possibility with many people cultivating at home.

For the full results, visit https://www150.statcan.gc.ca/n1/daily-quotidien/190207/dq190207b-eng.htm?HPA=1

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