Retail Cannabis Sales Drop for Third Consecutive Month in 2023

Retail Cannabis Sales Drop

The Canadian cannabis industry is facing a slowdown in sales after a strong start to the year. According to the latest data from Statistics Canada, retail cannabis sales in August 2023 were $464.23 million, down 1.6% from July and 3.4% from June. This is the third month in a row that sales have declined, after reaching a record high of $482.85 million in May.

What is Causing the Decline?

There are several factors that could be contributing to the lower sales figures, such as:

  • Seasonality: Cannabis sales tend to fluctuate with the seasons, as consumer demand and behaviour change throughout the year. For example, sales usually peak in the summer months, when people are more likely to socialize and enjoy outdoor activities, and dip in the winter months, when people are more likely to stay indoors and consume less. This pattern was observed in 2022, when sales reached $467.9 million in August and dropped to $387.4 million in December. Therefore, it is possible that the decline in sales in 2023 is partly due to the normal seasonal cycle of the industry.
  • Competition: The Canadian cannabis market is becoming increasingly competitive, as more licensed producers, retailers, and products enter the scene. According to Health Canada, there were 1,057 licensed cannabis cultivators, processors, and sellers as of September 2023, up from 846 in September 2022. Moreover, there were 3,139 cannabis stores operating across the country as of August 2023, up from 2,406 in August 2022. This means that consumers have more choices and options when it comes to buying cannabis, which could lead to lower prices and lower revenues for some businesses.
  • Supply and Demand: Another factor that could affect cannabis sales is the balance between supply and demand. According to the latest data from Health Canada, the total inventory of finished and unfinished cannabis products in August 2023 was 1,163,917 kilograms, while the total sales of dried cannabis and cannabis extracts in the same month were 19,865 kilograms and 10,216 litres, respectively. This indicates that there is still a significant oversupply of cannabis in the market, which could put downward pressure on prices and sales. On the other hand, the demand for cannabis could also be influenced by external factors, such as the COVID-19 pandemic, the economic situation, the legal status of cannabis in other countries, and the consumer preferences and trends.

Retail Cannabis Sales Drop

How are the Provinces and Territories Performing?

The retail cannabis sales data from Statistics Canada also show that the performance of the provinces and territories varied in August 2023. The following table summarizes the sales figures and the percentage changes from the previous month and the previous year for each jurisdiction:

Province/Territory Sales in August 2023 (in millions) % Change from July 2023 % Change from August 2022
Newfoundland and Labrador $7.56 5.13% 29.64%
Prince Edward Island $2.32 2.25% 25.81%
Nova Scotia $10.62 2.87% 24.67%
New Brunswick $8.53 5.97% 23.74%
Quebec $55.91 2.74% 18.69%
Ontario $188.46 7.03% 17.75%
Manitoba $15.42 -7.55% 15.79%
Saskatchewan $20.50 3.30% 14.54%
Alberta $78.59 0.07% 13.67%
British Columbia $73.93 4.13% 12.64%
Yukon $0.65 8.33% 10.17%
Northwest Territories $0.54 10.20% 8.00%
Nunavut $0.15 0.00% -6.25%

As the table shows, most provinces and territories saw an increase in sales from July to August, with the exception of Manitoba and Nunavut. However, all jurisdictions saw an increase in sales from August 2022 to August 2023, with Newfoundland and Labrador having the highest growth rate at 29.64%. The largest markets in terms of sales were Ontario, Alberta, and British Columbia, which accounted for 64.6% of the total sales in August 2023.

What are the Future Prospects for the Industry?

Despite the recent decline in sales, the Canadian cannabis industry still has a lot of potential for growth and innovation in the future. According to a report by MJBiz, cannabis sales are projected to exceed $33.5 billion in 2023, a $4 billion increase from 2022. Furthermore, the industry is expected to witness sales nearing $57 billion by 2028. Some of the factors that could drive this growth include:

  • New Products and Formats: The legalization of cannabis edibles, extracts, and topicals in 2022 opened up new opportunities for product development and diversification in the industry. According to a survey by Deloitte, 59% of current cannabis consumers and 65% of likely consumers said they would try cannabis edibles in the future. Moreover, 37% of current consumers and 42% of likely consumers said they would try cannabis-infused beverages. These new products and formats could attract new customers and increase the frequency and amount of consumption among existing customers.
  • Medical Cannabis: The medical cannabis market in Canada is also expected to grow in the coming years, as more patients and health-care practitioners become aware of the benefits and uses of cannabis for various conditions and symptoms. According to Health Canada, there were 377,024 registered medical cannabis clients as of June 2023, up from 329,038 in June 2022. Moreover, there were 1,495 health-care practitioners who provided a medical document for cannabis access in June 2023, up from 1,271 in June 2022. The medical cannabis market could also benefit from the research and development of new products and formulations, such as cannabis-based pharmaceuticals and nutraceuticals.
  • International Expansion: The Canadian cannabis industry could also leverage its expertise and experience to expand into the global market, as more countries legalize or decriminalize cannabis for medical or recreational purposes. According to a report by Prohibition Partners, the global cannabis market could be worth $103.9 billion by 2024, with Europe, Latin America, and Asia-Pacific being the most promising regions. Canadian cannabis companies could take advantage of their reputation and quality standards to establish partnerships and joint ventures with local players, as well as export their products and services to these emerging markets.

The Canadian cannabis industry is facing some challenges and uncertainties in the short term, but it also has a lot of opportunities and potential in the long term. The industry will need to adapt and innovate to meet the changing needs and preferences of consumers, as well as the evolving regulations and competition in the market. The industry will also need to demonstrate its social and environmental responsibility, as well as its economic contribution, to gain the trust and support of the public and the government.

By Benjamin Parker

Benjamin Parker is a seasoned senior content writer specializing in the CBD niche at CBD Strains Only. With a wealth of experience and expertise in the field, Benjamin is dedicated to providing readers with comprehensive and insightful content on all things CBD-related. His in-depth knowledge and passion for the benefits of CBD shine through in his articles, offering readers a deeper understanding of the industry and its potential for promoting health and wellness.

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