Ontario is projected to have the biggest cannabis market in Canada
A new report by Deloitte has concluded that Ontario will have the biggest market among all provinces, the user demographic is likely to shift slightly, and that not every province is looking forward to legalization of recreational cannabis.
In the first two months of 2018, Deloitte surveyed current recreational cannabis consumers in Canada to gain inside information into consumption levels, types of products consumers are interested in, and their preferred retail channels.
After carefully analyzing the results of the survey, the conclusion appears to be consistent with previous findings.
Let’s start with the projected market size in Canada for the year 2019, which was previously projected to be around $7 billion, although some analysts projected that it might even hit $10 billion.
Canadian cannabis market size in 2019
The total cannabis market in Canada, consisting of the medical, illegal, and legal recreational products, is expected to come around at $7.17 billion in sales next year.
Around $4.34 billion is projected to come from the legal recreational market, according to the survey.
Medical cannabis in Canada is projected to make $0.77 billion to $1.79 billion in sales, and the illegal market should bring in another half a billion to one billion dollars.
Once those three are added up, we get the total size of the market in Canada for 2019.
Here’s the breakdown of how those sales are expected to look like, spread across Canada:
Ontario is projected to have the biggest cannabis market out of all the provinces, although the western provinces aren’t falling behind too much.
Quebec is going to be right behind Ontario as the provincial government has already secured a very adequate supply deal, and its producers have the cheapest production rate when compared to producers from other provinces.
Not all provinces are on board
When it comes to the provinces, there are some differences to how people living in them are going to react to legalization.
Seeing how the goal of this legalization is to move users away from the black market, it would be best to do it as soon as possible.
At first, it seems that people in the Western provinces are far more likely to switch over to their legal retailers, and the ones in the East are a bit more antsy to do so.
The image above shows us that both Quebec and the three Atlantic provinces are not really looking forward to moving over to the legal system, but Quebecois in particular.
Why is that?
Well, in my opinion, it has something to do with the way recreational cannabis will be set up in those provinces.
Here’s a list of who will control the sales of cannabis in those provinces:
- Quebec: Government-run specialty stores and online
- Nova Scotia: Government-run specialty stores and online
- Newfoundland: Government-run specialty stores
- PEI: Government-run specialty stores and online
- New Brunswick: Government-run specialty stores
Starting to see a pattern?
On the other side of the country — guess who will be controlling the sales in BC, Sask, Manitoba, and Alberta? Privately-owned companies, that’s right.
However, these numbers only represent the people that plan on entering the legal system at first. They are projected to grow as we go further into 2019 and 2020.
On the image above we can see the most often mentioned reasons for moving into the legal market. Obviously, everyone wants better weed for a cheaper price.
Aside from that, Canadians also want their weed to be certified and safe to use, which also goes hand in hand with the prices going down and quality going up — you simply can’t get that from a street dealer.
Perhaps the most interesting reason for moving into the legal market was the one 44% of surveyed users mentioned: having a range of products that target specific effects on the body.
This is one of the main focal points when discussing anything related to medical cannabis.
Having the option to choose cannabis over painkillers is a blessing, which is why 44% of the users mentioned that having that range is of utmost importance.
Who will be the main cannabis users?
Currently, most of Canada’s cannabis users are the youth — people aged 18-34 and the young ones love to do it often, even a few times per week.
It would seem that Deloitte found that people from lower-classes are more likely to use cannabis, as the current user only has a high school or college diploma.
On the other hand, Deloitte is projecting that once cannabis becomes legal, the more conservative and older fan base will become more active on the market.
They are projecting that the average age group will be between 35 and 54 years for consumers, and those consumers are more likely to be university educated or hold a graduate diploma.
When it comes to the frequency of cannabis use among current users, the trends aren’t going to change a lot after legalization.
The same cannot be said for those that are likely to start using cannabis after legalization.
Those that plan to start smoking soon are less likely to be daily users, and three times more likely to use cannabis once a month than current users.
This means that even though there might be more new users, they won’t visit the weed shops quite as often as those that have already developed this habit.
Consumption levels are not expected to change significantly with the addition of these new users. Overall, 41% of all consumers—and 63% of probable ones—say they’ll use it less than once a month.
All images and graphs were taken from the Deloitte 2018 cannabis report, “A society in transition, an industry ready to bloom.”
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