Canada’s Regulated Cannabis Sales Finally Overtake Legacy Market

Licensed adult-use cannabis sales in Canada exceeded unlicensed sales for the first time during the third quarter of 2020  – by about $70 million, according to figures from Statistics Canada. Legal sales during the quarter reached $824 million while estimated illegal sales were $754 million.

Medical cannabis sales in the country were $146 million during the quarter, the lowest in the five quarters outlined in the government data.

Adult-use sales in the third quarter of 2020 far outpaced sales in the previous four quarters, overtaking quarter two sales by $194 million and doubling the $408 million realized in the third quarter of 2019, according to Statistics Canada data.

Unlicensed cannabis sales in Canada have been dropping steadily since the third quarter of 2019 when they were estimated at $935 million. In the following quarters, illegal sales fell to $890 million (Q4 2019), $842 million (Q1 2020), and to $801 million (Q2 2020).

In December, Ontario Auditor General Bonnie Lysyk released a report that found unregulated transactions comprised about 80% of the province’s sales, saying that products outside of the licensed market were of better quality than their regulated counterparts.

Industry activists and law enforcement agencies have contended that the lack of oversight on personal cultivation allowed under the nation’s medical cannabis laws also drove unregulated market products. About 34,000 Canadians have a license to grow cannabis for personal use.

George Smitherman, CEO of the Cannabis Council of Canada, told MJBizDaily that the quarter three figures illustrate “the success of one of the policy goals, which is bringing sales into the legal framework.” He added the “price decreases on key verticals of dry flower have been essential for transitioning many of those consumers.”

Note: All figures in Canadian dollars