Most studies and research show that the cannabis industry has been continuously growing. However, this growth isn’t reflected in the recent financials of leading cannabis companies. Top companies in the industry have recorded disappointing revenues in the past few quarters, resulting in cannabis stocks tumbling in the last few months. Some of these stocks have lost more than half their values in the last two quarters.
Industry expectations and growth
According to a recent study by Statistics Canada, Canada’s cannabis sales within the first year of legalization totaled almost $1 billion. However, this came up short of analysts’ projections. As per the data, Ontario led the country’s sales at almost $216.8 million. Alberta has the most physical outlets in the country compared to other provinces. It recorded sales of $195.7 million. These results were far below the forecasts analysts released before legalization.
Deloitte’s report suggested that the legal cannabis industry’s value in the first year of recreational marijuana legalization would be $4.34 billion. It also suggested that the illegal marijuana market would dominate the industry. However, other sources such as Statistics Canada show that the black market represents almost 80% of cannabis sales in the country.
Dispensaries and its reach
Statistics Canada also stated that the country had 407 stores as of July, almost double the number of stores from four months earlier. This increase in the number of stores resulted in a decline in the average distance of Canadians from the nearest cannabis store. The average distance in July was 34 km, almost half the average distance observed a few months earlier. According to Cowen and Company, Canada currently has 542 cannabis stores.
According to Statistics Canada, 45% of Canadians live within a 10 km radius of a retail store. About 20% live within a 3 km radius. The number varies for each province, as the distribution of retail stores differs. For instance, Ontario has only 24 legal cannabis outlets as of now. In Ontario, just 33% of cannabis users live within a 10 km radius.
During the first few months of legalization, online cannabis sales represented almost half of the legal cannabis sales in the country. After more retail stores launched, online sales fell. Statistics Canada determined that online sales in the country made up 13%, or 120.6 million, of the total recreational marijuana sales in the country. The retail market is expected to grow as supply chains in the country develop and cannabis product lines diversify.
