Canadians spent way more money on cannabis this summer than the same time last year, and spending spiked after the pandemic hit, according to data from Statistics Canada.
In July, Canadians spent $231.6 million on cannabis, up from $104.5 million in July 2019. Spending went up $79 million between February and July 2020.
Spending in March 2020 jumped to $181.2 million, when lockdown orders started to take effect, up from $152 million in February.
In April 2020, spending dipped down slightly to $178.4 million, then jumped $8 million in May, $14 million in June, and $30 million in July.
Ontario, Alberta, and Quebec are the top three spenders. Alberta, a province of 4.3 million people, has more than 500 legal cannabis stores, while Ontario and Quebec have 170 and 45, respectively.
Even with the recent gains, the legal industry has fallen far short of many analysts’ lofty projections since legalization nearly two years ago.
CIBC Capital Markets had initially predicted legal recreational cannabis sales would hit $3.4 billion in 2020, and has since adjusted that prediction to $2.5 billion. (Sales up until July totalled about $1.2 billion.)
And around 40 percent of consumers still report getting weed from an illegal source, according to a Stats Can self-reported survey.
Omar Khan, national cannabis sector lead with Hill+Knowlton Strategies, said the pandemic is a factor in the boost in sales, “as many of us are spending more and more time at home and have fewer and fewer entertainment options.”
However, he said the uptick in stores opening in Ontario coupled with new licensed producers offering cheaper bud has also helped moved things in the right direction.
This year was also a big year for cannabis edibles, vapes, and drinks hitting store shelves.
However, Khan said the “cannabis 2.0” products are still often 50 percent more expensive than what’s available in the illicit market.
“It’s not really attracting the chronic users,” he said. “They’re going to buy a lot of product and they tend to skew towards dried flower.”
Khan said while the industry is seeing “incremental improvement” more stores need to be rolled out and the government needs to figure out how to penetrate the illicit market.
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