It's been just over a year since cannabis was legalized in Canada, and consumers continue to voice their concerns about the lack of legal cannabis dispensaries out there to purchase products from.
Anyone who has been keeping an eye on the cannabis space knows that it has been a bumpy ride. One of the biggest indicators of this slower-than-expected growth comes from the financial reports released by major Canadian licensed producers.
It's become clear that in order for these companies to boost their lackluster sales, there need to be more cannabis dispensaries out there for their products to be sold in.
Let's take a look at the current state of Canada's legal cannabis market, how many cannabis dispensaries are open in each province, and what Canadian consumers can expect in the coming months.
Canada's Legal Cannabis Market
When Canada officially legalized recreational adult-use marijuana on October 17, 2018, it became the second country in the world to formally legalize the cultivation, possession, acquisition, and consumption of cannabis.
The exciting news caused Canadians across the nation to celebrate this long-awaited win.
However, that celebration was shortlived when it quickly became evident to consumers, cannabis companies, and stakeholders that the industry still had a lot of growing up to do.
Not only were illegal dispensaries still active in most of the major cities across the country, but the cannabis legal products were selling at a higher price point than their illicit counterparts. Perhaps the biggest disappointment of all was the lack of cannabis dispensaries out there that did sell legal recreational marijuana.
In fact, in Ontario, Canada's most populous province with over 14 million people, consumers could only purchase cannabis online through the Ontario Cannabis Store website. Unsurprisingly, "extremely high demand" paired with the unfortunate timing of a Canada Post strike that led to longer-than-expected delivery times.
A whopping 38,000 orders were received by the government-run Ontario cannabis store by mid-morning on legalization day. At the same time, New Brunswick's Cannabis NB website reported an average of 700 live users every hour.
Meanwhile, there was only one legal brick-and-mortar shop open in British Columbia on legalization day out in Kamloops.
But it wasn't just the lack of cannabis dispensaries that caused a kerfuffle on October 17, 2018; it was the lack of supply that prevented some stores from opening their doors. And the ones that did open quickly began running low or were completely cleaned out of their supply within the first couple days of opening.
In short, things were off to a very rocky start.
Cannabis Dispensaries Opening Across Canada
Luckily for cannabis companies and consumers alike, Canada's legal cannabis market has begun to pick up the pace, albeit a little slowly.
Alberta has been leading the charge since day one and now has 335 cannabis dispensaries open across the region to service its population of 4.3 million. The province's ambitious strategy has definitely worked in its favor after Statistics Canada revealed that Albertans had spent the most money on legal pot between October 2018 and June 2019.
Albertans spent $123.7 million on legal recreational marijuana during that time period. Ontario came in second place with $121.6 million in sales despite not opening its first cannabis dispensaries until April 2019.
In December 2018, Ontario announced that it was putting a temporary cap on the number of cannabis retail licenses and would hold a lottery to determine who could apply. Then in July 2019, the Government of Ontario announced plans for a second lottery that would include 42 additional licenses.
Although several of the cannabis dispensaries that won the lottery were individuals, major Canadian LPs still managed to get their hands on one or two. Industry giant Canopy Growth Corp. (TSX:WEED) (NYSE:CGC) opened a dispensary in Toronto under its Tokyo Smoke brand and another in London, Ontario, under its Tweed brand.
Meanwhile, Alberta-based retail cannabis company High Tide Inc. (CSE:HITI) (OTCQB:HITIF) has four Canna Cabana locations now open in Ontario.
Alcanna Inc. (TSX:CLIQ) (OTCPK:LQSIF) also brought its Alberta-based brand to Ontario by opening a Nova Cannabis shop in Toronto in April. Even Fire & Flower (TSX:FAF) (OTCPK:FFLWF) got a piece of the pie when it opened what is being dubbed "Toronto's first luxury cannabis store."
In Quebec, the government has taken a different approach and decided to control all of the dispensaries province-wide.
Although it was slow to roll out the opening of its Société québécoise du cannabis (SQDC) stores across the province, Quebec still came in third in sales at $119.2 million by June. Now, there are 25 cannabis dispensaries open, but it's unclear if and when more will open.
As mentioned, British Columbia began legalization with one lonely store. Luckily, the province has picked up the pace and now has 90 cannabis dispensaries open and another 90 coming soon.
Still, Manitoba, which has 27 dispensaries, and Saskatchewan, which now has 39, both pulled in more marijuana sales-revenue than cannabis-crazy BC. Of course, this is likely to do with the delayed shutdown of illegal dispensaries and the booming black market.
Of course, all of these sales numbers pale in comparison to the money that's being made in cannabis-friendly US states. Colorado brought in nearly $1.55 billion in marijuana tax revenue in 2018 and has topped $6 billion since recreational sales began in 2014.
The fact remains, if Canada wants to truly beat out the black market, it will have to open a ton more cannabis dispensaries and perhaps develop a nationwide approach.
What are your thoughts on Canada's legal pot market? Let us know in the comments!
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