Two years after recreational cannabis sales became legal in Canada, the industry is flourishing. Amidst the coronavirus pandemic, the Great White North’s legal marijuana industry is celebrating increased sales, more brick and mortar stores, and competitive pricing. Although the industry has struggled to compete with the black market ever since Canada legalized recreational cannabis in October 2018, it has recently been gaining ground.
According to David Soberman, a professor of marketing at the University of Toronto, this can be attributed to the coronavirus pandemic. “It’s been a boon for the legal industry,” he says. July, for instance, saw a 15% increase in sales from June, the biggest monthly jump in sales since Canada legalized cannabis. Terry Kulaga, the founder of Weed Me, a legal cannabis production company based in Pickering, Ontario says self-isolation and working from home policies have greatly benefited the industry.
“Because people are spending more time at home, they’re perhaps more comfortable with consuming cannabis. As people work from home, they probably have more time to actually consume cannabis,” he says. Statistics Canada reports that Canadians have been buying more marijuana, it’s just that they are now sourcing it legally. Compared to April-June 2019, people spent 74% more money on licensed cannabis during the same period in 2020.
“There’s been a downturn in the black market because people are more reluctant to go out and meet their regular cannabis dealer in the way that they were prior to the pandemic,” Doberman explains. Additionally, the country has also seen an increase in the number of brick-and-mortar retail shops. According to the Alcohol and Gaming Commission of Ontario, there are more than 180 licensed cannabis stores in the province of Ontario.
“More and more people are having a shop open up locally where they can access a safe and reliable product,” says Weed Me founder Terry Kulaga. “Moreover, I’ll mention that inside the stores themselves, the people selling the products are becoming more knowledgeable about the product and the suppliers,” he surmises.
With the legal cannabis market offering cheaper prices, consumers have even more incentive to ditch the black market and start buying legal marijuana. Back in the industry’s inception, the average price per gram for legal cannabis was $10.25 while on the black market it was around 4 dollars less. Now the average price per gram for legal dried flower is around $7.05.
“Legal cannabis is infinitely better than illegal cannabis,” says Steven Frys, president and co-founder of Sessions Cannabis, a chain of five stores across Ontario. “It’s a healthy and safe product that’s approved by Health Canada and it’s highly regulated. Tax money is going back to the community when we’re purchasing through the legal channels.”
There are many cannabis sector players within the Canadian and U.S. marijuana industry. One of the interesting firms to watch is Sugarmade, Inc. (OTCQB: SGMD). They focus on offering delivery services and their market segment is certainly trending up as the pandemic drags on and people get used to having everything they need delivered to their doorsteps.
CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of two informative articles each business day. Our concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. Articles are released each business day at 4:20 a.m. and 4:20 p.m. Eastern – our tribute to the time synonymous with cannabis culture. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.
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