The legalization of cannabis is gaining massive momentum in different countries around the world. As a result of this, the cannabis industries around the world are growing at distinct rates with certain countries experiencing major boom at times. Canada stands out as one of the countries that saw significant growth in their cannabis industry in recent years, with the cannabis sales in the country hitting $ 2.6 billion in 2020. The cannabis sales number in Canada represents a triple-digit growth of Canada’s legal cannabis market. This is an accomplishment that’s beyond astonishing.This is one of the biggest boom that the world of cannabis has seen in recent times and we’ll be dissecting it in this article. What drove the growth of the cannabis sales in Canada? Is the growth sustainable? What does the future hold for cannabis in Canada? These and lots more will be discussed in detail. Read on!
What Drove the Growth of Cannabis Sales in Canada
Determining the exact factor responsible for driving the cannabis market upwards astronomically is a complicated task. So many factors, so many variables come into play when it comes to the growth of an industrial sector, especially one that’s booming like Canada’s cannabis industry. However, despite the tricky nature of the task experts have conducted several detailed surveys and studies to determine the catalysts responsible for the growth and several reports have been put out.
A report put out by the Brightfield Group details all about the growth of cannabis sales in the country, as well as the catalysts for this growth. These growth factors include:
Growth and expansion in e-commerce and click and collect offerings.
An increase in brick and mortar retail access in areas that include Quebec, Ontario and British Columbia.
Quick adaptation to the pandemic by retailers, devising means to deliver despite the lockdown and closure.
Legal prices also became quite competitive with the black market.
The Rise of Value Brands in The Canada Cannabis Market
The volume of sales was not the only thing that experienced significant rise in the Canada cannabis market in 2020, value brands also increased. With the industry seeing great diversification in the year, the rise of value brands can be traced down to a number of factors which include competitive prices and the influx of new consumers. The legalization of cannabis means that the legal market can now compete with the illicit market, making it easy for new value brands to make their foray into the market.
These value brands do not need to bother about being outpriced, as most consumers are increasingly making the switch from the illicit market to the legal cannabis market. This switch meant that regular stoners purchased more from these value brands. The legality of cannabis and ease of dealing with value brands also saw new cannabis enthusiasts give marijuana a try. These give value brands in Canada all the valuable traffic that they require.
Speaking on the growth of the industry in Canada, the international research manager of Brightfield Group, Jamie Schau said “The Canadian market is witnessing impressive growth, with adult-use cannabis growing 118% in 2020 and in line to grow another 60% this year. That growth has ushered in a new era of adult-use cannabis, one that has brought not only an ever-evolving set of both 1.0 and 2.0 product offerings, but increasingly sophisticated and strategic competitors across the supply chain, and more diverse and demanding consumers.”
What to Expect in The Coming Years
The future is always a mystery, no matter how stable things might seem no one really knows what the future holds. However, with obvious growth, and specific tools in place its possible to predict and make projections of what the future might hold.
Along with the growth in the market, a lot of structure came into the Canadian cannabis market. Most of the licensed producers placed their focus on improving consumer experience, branding and most importantly product quality. This had led cannabis enthusiasts to identify with certain brands, building customer loyalty in the market.
Another trend in the market is the increase in diversity of consumers. This means brands will the need to appeal to a more diverse pool of consumers. The quality of marketing and product offerings will be improved, with innovation reaching an all-time high. Partnerships between brands will also increase, in a bid to cater to the needs of their diverse pool of consumers. All of this will position Canada as one of the biggest cannabis industries in a few years. The Brightfield Group report has the numbers to back this up.
Retail openings and price drops were notable catalysts for growth in 2020, especially in Ontario and British Columbia. Partnerships and M&A are ramping up — most notably, partnerships between Canadian LPs and U.S. brands.
The international research manager of Brightfield Group, Jamie Schau said “We look forward to watching the market continue to mature as retail openings and price competitiveness make cannabis more approachable for Canadian consumers, and compelling brands and products continue to surge”.
The growth in the Canadian cannabis industry did not come as a surprise to experts in the industry. It should be noted that Colorado and Louisiana also experienced boom right after legalization. We’re almost at the halfway point of the year and so far 2021 has been looking really optimistic for the cannabis industry globally and in Canada. Will cannabis sales in Canada double again by the end of 2021? Economic projections point that way but we’ll wait and see. Regardless of what happens these are exciting times for all cannabis enthusiasts.