Legal cannabis sells better than the illegal market in Ontario for the first time

Sales of legal cannabis exceeded the illegal market in Ontario for the first time in the second quarter of this year, according to new data from the province’s only licensed online cannabis retailer.

“Ontarians chose to buy more than half of their cannabis through legal channels as Ontario’s legal market share rose from 47.1 percent in the previous quarter to 54.2 percent,” the Ontario Cannabis Store (OCS), also the only one The province’s licensed cannabis wholesaler wrote in its most recent quarterly report.

The number is based on data collected by Statistics Canada from cannabis users who may be prone to under-reporting purchases from unlicensed sources. But Jennawae McLean, the co-founder of the cannabis pharmacy chain Calyx + Trichomes in Kingston, Ontario, said the number was not unthinkable.

“When it comes to the unregulated market, (sales) is a hard number to pin down, but assuming the coverage is true, it’s not hard to believe,” said McLean. “The number of stores in Ontario has grown exponentially over the past two years. It really just completely exploded. “

The number of licensed cannabis retailers in Ontario has risen to 1,115 in the past few months. At the time last year there were only 183 legal pharmacies in the province and only 53 were operating two years ago.

Sales of licensed cannabis by licensed retailers between July and September this year amounted to nearly $ 394 million Canadian dollars ($ 306.7 million) compared to $ 204.3 million Canadian dollars for the same period last year. Record sales of 56 million grams of licensed cannabis across all product types during the quarter. The vast majority of sales, 96 percent, were achieved in stationary pharmacies, with online sales making the difference.

The market share of legal cannabis is growing rapidly

When licensed cannabis sales began in Canada in 2018, licensed retailers made up only about 5.4 percent of the total recreational cannabis market in Ontario. The market share of licensed dealers rose to 19 percent by the end of 2019 and to 44.1 percent by the end of 2020. According to the report, regulated cannabis sales in Ontario, Canada’s most populous province, were the highest in the country.

“Ontario continued to sell more legal cannabis than any other province or territory, with nearly 39 percent of all legal cannabis sales in Canada being through the provincial licensed retailers and online store,” the report said. “During the quarter, a record 56 million grams of cannabis was sold across all product categories, with sales of nearly $ 394 million, up 28 percent compared to the first quarter of the fiscal year.”

McLean attributed the success of the regulated cannabis industry in Ontario in part to the wide range retailers have compared to the illegal market. There were more than 1,800 different licensed products available in the province in the second quarter, including nearly 400 recently added by OCS. Dried flowers, vapes, and pre-rolls were the most popular types of products.

“I was working in one of my stores yesterday and this guy came in and he was blown away by the size of our menu, which is 27 pages to be fair,” McLean told The Canadian Press. “He had no idea where to start and he said that since he started smoking cannabis, he got it from a man and didn’t know what it was or what it was.”

Lori Hatcher, director of marketing at Truss Beverage Co., a joint venture between Molson Coors Canada brewery and cannabis company Hexo Corp., said cannabis beverages have also helped boost cannabis sales through legal channels in Ontario.

“This is a category that doesn’t really exist in the illegal realm, so it was really important to actually get these consumers into the legal market,” Hatcher said.