Benzinga
Published Dec 08, 2023 13:52
Updated Dec 08, 2023 15:10
How Much Do Canadians Spend On Marijuana? A Look At Third Quarter 2023 Sales Data
Benzinga - by Nicolás Jose Rodriguez, Benzinga Staff Writer.
Five years into its legalization, the Canadian cannabis market reveals intriguing regional disparities and growth trends, as highlighted in the latest report from cannabis equity research firm Zuanic & Associates.
Despite the usual market drivers like affordability, access, and variety, Canada emerges as an outlier.
The report delves into how lower prices and an abundance of retail stores are counterbalanced by factors such as high excise taxes, product caps, strict packaging regulations, and marketing restrictions, which collectively contribute to the nation's lower spending levels in the cannabis sector.
“Among the five largest cannabis formats in Canada, flower accounts for 37% of sales, pre-rolls 33%, vape 15%, and edibles and concentrates each 5%," writes Pablo Zuanic, a senior analyst. "In the third quarter of 2023, vaping notably recorded the third-highest year-over-year growth, reaching 21%, which is behind pre-rolls at 25% and concentrates leading with 43%."
“Flower sales increased by 5% and edibles by 6% year-over-year. However, the market share for vapes has remained relatively consistent, moving from 14% in the first quarter of 2021 to 15% in the third quarter of 2022, still well below the vape penetration in states like California and Colorado, which stands at 26%.”
h2 Regional Differences: Store Density And Pricing/h2 Alberta leads in-store density with 163 stores per million people, significantly higher than the national average of 96. Quebec, conversely, has just 11 stores per million.Flower prices vary across provinces, with Quebec showing the highest average price, significantly skewing the national average.
Product Preferences In terms of product mix, Alberta and British Columbia have a higher preference for pre-rolls over flowers, unlike Quebec where flower dominates the market. Vape products have the highest penetration in Alberta.
Sales Per Capita Alberta also tops in per capita spending at C$203, compared to the national average of C$154. Quebec trails with just C$81.
Overall Growth The report indicates a 16% year-over-year (YoY) growth in nationwide sales. British Columbia leads with a 23% growth, followed by Ontario and Alberta.
Per Capita Spending and Market Characteristics Nationwide, the per capita spend on marijuana in Canada stands at US$113, noticeably lower than in most U.S. states.
"According to 3Q23 sales data, Canada's total per capita spending on MJ stands at US$113 or C$154, comprising 93% recreational and 7% medicinal use. This figure is notably lower than in most U.S. states, a significant observation for a market that's been operational for five years. In comparison, states such as Arizona and Illinois see spending at US$160, while Michigan reaches as high as US$330," Zuanic wrote.
“Despite having more stores (96 per 1 million people) and generally lower prices (US$4.33 or C$5.85/gram for flower), factors such as high excise taxes, product caps, restrictive packaging, and marketing limitations contribute to Canada's modest per capita spending.”
h2 Major Players In Canada's Cannabis Market /h2Photo: AI-Generated Image.
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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