Canada's cannabis landscape: A province-by-province breakdown

Ctvnews.ca
April 12, 2019
Ryan Flanagan

As Canada’s six-month anniversary of marijuana legalization day approaches, it’s clear that it's been a bit of a rocky road.

Supply shortages have left customers and retailers frustrated across the country. Some provinces have already laid off workers or cut hours at government-run cannabis retailers, while others are still having trouble getting their retail networks off the ground.

A possible positive to take from the past six months is that there has been no indication of serious spikes in criminal activity or public health emergencies due to marijuana being more readily available -- but even that could change as time moves on and more data is compiled.

One thing that can’t be argued is that the business world has seen a lot of opportunity in the Canadian cannabis market. Even though major industry players such as Cronos and CannTrust are reporting higher-than-expected losses, the surging revenues have investors dreaming of dollar signs. From the takeover of Newstrike to European expansion to celebrity involvement, the weed business remains an attractive one in many quarters.

That optimism is backed up by a new report from Arcview Market Research, which forecasts total spending on legal cannabis in Canada to grow from $569 million in 2018 to $5.2 billion in 2024.

With half a year since legalization day in the rear-view mirror, CTVNews.ca is taking a province-by-province look at how Canadians are responding to legalized cannabis.

ALBERTA

What’s happening? There was so much interest in operating private-sector cannabis stores in Alberta that the government had to step in and put a freeze on the issuing of new retail licences just weeks after legalization day. That moratorium hasn’t stopped the province from experiencing a long-lasting cannabis shortage, with some industry insiders warning that it could be a year or two before the situation stabilizes.

How much has been sold? According to the Arcview report, $24.5 million worth of legal, non-prescription marijuana was purchased in Alberta before the end of 2018. The province was responsible for 38 per cent of all legal cannabis sales in Canada over that time period, making it by far the leader in cannabis purchases per capita.

Who is using it? Statistics Canada says 16.2 per cent of Albertans consumed some form of cannabis in the last three months of 2018.

What does it cost? Cannabis is selling at an average price of $9.07 per gram, according to Statistics Canada data collected up to March 31. This is an increase of about 24 per cent from pre-legalization prices -- one of the largest in the country.

Future forecast: Arcview says Alberta’s legal cannabis sector will become a nearly $800-million industry by 2024. Despite the growth, its share of the national market is forecast to decline from 38 per cent to 18.2 per cent as other provinces catch up to Alberta’s early adoption of the drug.

BRITISH COLUMBIA

What’s happening? B.C.’s experience with legalized marijuana has gotten off to a slow start. An online ordering portal is open, but physical cannabis stores have been slower to get off the ground. Licences for 14 new stores have been approved, including one for a store in Victoria which expects to open this month. The rollout has been slow enough that the province recently revised its projected tax revenues from cannabis from $200 million over three years to $68 million over the same period.

How much has been sold? Possibly due to physical stores being slow to open, B.C. residents have been slower than people in any other province to start acquiring cannabis legally. Arcview says $3.4 million was spent on non-prescription cannabis in the province before the end of 2018. Total sales including medicinal cannabis make up 3.4 per cent of the national sales figure -- even though B.C. contains 13.5 per cent of the country’s population.

Who is using it? Unlike the low interest in purchasing legal cannabis, B.C. residents are almost right at the national average when it comes to consumption. StatCan reported a 15.3 per cent usage rate as of the end of 2018.

What does it cost? Average usage and low legal purchase levels suggest British Columbians may be sticking with their pre-legalization methods of accessing cannabis -- and it isn’t because of a price gap. According to StatCan, B.C. has seen the smallest post-legalization price increase of any province, with the cost of a gram rising by 3.7 per cent to $7.15.

Future forecast: Arcview expects B.C. residents to eventually get on board with the legal cannabis system, pegging its 2024 share of the Canadian market at 14 per cent.

MANITOBA

What’s happening? There are 22 licensed cannabis stores in operation around the province, including 13 in Winnipeg. More stores are in the works for seven rural communities, and the province has set a goal of having 90 per cent of Manitobans be within a 30-minute drive of a cannabis store by October 2020.

How much has been sold? Manitobans seem to be giving legalized cannabis a fair shake. Arcview says the province was responsible for 3.6 per cent of the national sales figure, in line with its share of the national population, with non-prescription sales totaling approximately $7.8 million.

Who is using it? Just over 15 per cent of Manitobans consumed cannabis in the last three months of 2018, according to StatCan.

What does it cost? Manitoba had the second-highest legalization price bump of any province, with the average cost of one gram increasing by 27.7 per cent to $9.14.

Future forecast: Manitoba’s cannabis industry is expected to keep growing steadily at its current per capita rate, with Arcview expecting non-prescription sales in the province to total $171 million by 2024.

NEW BRUNSWICK

What’s happening? The pot shortages that gripped much of the country post-legalization made headlines in New Brunswick, where Cannabis NB laid off approximately 60 workers. There are currently 20 government-run stores in operation, as well as an online sales portal.

How much has been sold? Non-prescription cannabis sales in New Brunswick for 2018 clocked in at $6.3 million, according to Arcview. New Brunswickers punched slightly above their weight, accounting for 2.5 per cent of the national market.

Who is using it? Atlantic Canada has the highest rates of reported cannabis consumption in the country, and New Brunswick is no exception, with 18.9 per cent of the province’s residents reporting use.

What does it cost? No province saw as big of a jump between pre-legalization and post-legalization prices as New Brunswick. While $8.27 per gram isn’t the highest average price in the country, the 30.5 per cent increase is the largest experienced anywhere.

Future forecast: The Arcview report forecasts New Brunswick’s share of the Canadian cannabis market to retreat closer to two per cent by 2024, bringing it more in line with its population.

NEWFOUNDLAND AND LABRADOR

What’s happening? Newfoundland and Labrador’s unique time zone made it the first place in Canada where legal cannabis could be purchased. The rollout has been slow and steady ever since, with 25 privately operated stores now up and running around the province.

How much has been sold? Because its stores opened first, Newfoundland and Labrador technically had 100 per cent of the Canadian market to itself for 30 minutes or so. That didn’t last, of course, but sales have remained brisk. The province’s residents purchased $5.3 million worth of non-prescription cannabis in 2018, according to Arcview, and were responsible for 2 per cent of national sales -- nearly 1.5 times their share of the population.

Who is using it? Give the relatively high purchasing levels, it’s no surprise that Newfoundland and Labrador is also one of Canada’s leaders when it comes to consuming cannabis. StatCan says 19.2 per cent of the province’s population reported using the drug in the last three months of 2018.

What does it cost? Newfoundland and Labrador had the priciest cannabis of any province prior to legalization, and a 21.8 per cent cost increase since Oct. 17, 2018, has helped its keep it crown. One gram of cannabis retails for an average of $9.36.

Future forecast: Continued sales growth is expected over the next few years, with Arcview forecasting Newfoundland and Labrador to have a 2.2 per cent share of the national market by 2024, with non-prescription sales accounting for approximately $108 million.

NOVA SCOTIA

What’s happening? Nova Scotia started cannabis sales in 12 NSLC liquor stores, and is now looking at expanding that offering because of surprisingly low interest in online purchases. Nova Scotians are also behind two attempts to change federal rules around the drug, with one woman calling on Health Canada to permit the importation of CBD oil products from the U.S. and another planning a constitutional challenge over new impaired-driving-by-drug laws.

How much has been sold? Nova Scotians were big consumers of cannabis post-legalization, with Arcview reporting that the province made up 4.6 per cent of the Canadian market. An estimated $12.8 million was spent on non-prescription cannabis in the province post-legalization.

Who is using it? Everybody! Well, not everybody, but a higher proportion of people than in any other province. In total, 21.7 per cent of Nova Scotians used marijuana in 2018 after cannabis legalization, according to StatCan.

What does it cost? The high demand for marijuana in Nova Scotia occurred despite a relatively steep price increase. Marijuana in Nova Scotia is retailing at an average cost of $8.73 per gram -- a 19.7 per cent increase from pre-legalization levels.

Future forecast: While Arcview forecasts sales in 2024 to hit $137 million -- more than 10 times what they were during the brief legalization window of 2018 -- other provinces are expected to see even more growth. As a result, Nova Scotia’s share of total Canadian sales is expected to fall to 2.9 per cent, closer to the province’s proportion of the population.

ONTARIO

What’s happening? The Ontario government rethought its approach to cannabis sales a few months before the Oct. 17, 2018, legalization date, deciding to use private retail operators instead of the LCBO liquor agency. As a result, no stores opened in the province until April 1, and large cities including Windsor and Kitchener remain without any physical retail cannabis presence. Even then, 12 of the operators granted licenses were fined for not being able to open on time. Seventy-seven of the province’s 414 municipalities have decreed that no cannabis stores will be allowed to operate within their borders.

How much has been sold? Almost $22 million worth of non-prescription cannabis by the end of 2018, according to Arcview. With medicinal marijuana factored in, Ontario accounts for 35.7 per cent of the total national figure despite its lack of physical stores.

Who is using it? StatCan found that 15.4 per cent of Ontarians used cannabis in the last quarter of 2018, exactly in line with the national average.

What does it cost? One of the priciest provinces for marijuana prior to last October, Ontario saw a relatively small post-legalization price bump of 8.5 per cent, moving it closer to the middle of the pack. The average cost now sits at $8.05 per gram, one cent above the national average.

Future forecast: Arcview’s forecast calls for Ontario’s share of the national cannabis pie to rise to 39 per cent by 2024, making it a $1.8-billion market.

PRINCE EDWARD ISLAND

What’s happening? The smallest province offers its residents cannabis through an online portal and four physical storefronts, each in a different community. Future expansion is possible.

How much has been sold? Prince Edward Island punched above its weight in the first 2.5 months post-legalization, purchasing $2.5 million worth of non-prescription cannabis and making up 0.7 per cent of all national sales.

Who is using it? At 17.9 per cent, P.E.I. has a lower usage rate than any other Atlantic province but is still well above the national average of 15.4 per cent.

What does it cost? P.E.I. saw the smallest price increase of any province other than B.C., with a five per cent jump leaving the cost of cannabis at $7.69 per gram.

Future forecast: The province’s share of marijuana sales is expected to fall closer to its share of the country’s population over the next few years. Arcview predicts P.E.I. to see $16.2 million worth of marijuana sales by 2024.

QUEBEC

What’s happening? Supply shortages have hindered rollout plans in Quebec, with the province cutting hours at its retail stores and reducing the number of stores it plans to have open by 2020 to 40. The province’s new government is also working to increase the minimum legal age for cannabis consumption from 18 to 21, and to ban consumption from all public spaces.

How much has been sold? Quebec leads the country in non-prescription sales, with $24.7 million recorded as of the end of 2018. However, medicinal marijuana use in Quebec is very limited -- meaning the province only accounts for 6.2 per cent of the total national sales figure.

Who is using it? The low uptake of medicinal marijuana may help explain why StatCan found Quebec to have the lowest cannabis consumption rate of any province, at 13.6 per cent.

What does it cost? Perhaps owing to the relatively low demand for their product, Quebec’s marijuana retailers have had to keep their prices lower than those in any other province. The average price reported as of March 31 was $6.75 per gram -- which still represents a 15.9 per cent increase since legalization.

Future forecast: Arcview is bullish on the potential for the Quebec cannabis market to grow, predicting that the province’s share of the national market will more than double by 2024, reaching 13.6 per cent. That will still leave it well below the province’s share of the national population.

SASKATCHEWAN

What’s happening? There are currently 22 privately operated cannabis stores in operation in Sasktchewan. Their licenses also permit online ordering. A union representing government workers has said the province won’t take in enough revenue to offset the costs of cannabis-related training and enforcement.

How much has been sold? With 3.1 per cent of Canada’s population, Saskatchewan accounted for 2.9 per cent of the country’s marijuana sales in 2018. Non-prescription sales totaled $1.8 million. The black market may also be doing well, as one dealer told CTV Saskatoon her sales increased significantly post-legalization.

Who is using it? Saskatchewan is home to the biggest proportion of marijuana consumers of any western province, according to StatCan, with 16.5 per cent of people using cannabis during the last three months of 2018.

What does it cost? After paying above-average prices for cannabis pre-legalization, Saskatchewanians can now get it for a few cents less the average price across the country. The average cost of a gram has risen by 10.3 per cent since last October and now clocks in at $8.02.

Future forecast: The Arcview forecasts non-prescription marijuana sales in Saskatchewan in 2024 to be 100 times what they were in the abbreviated 2018 year, predicting sales volume of $180 million as the drug’s popularity in Saskatchewan grows beyond the province’s share of the population.

THE TERRITORIES

What’s happening? The spread-out populations of Canada’s north make cannabis both harder to come by and more expensive than it is for people living in the south. The Yukon government operates one retail store in Whitehorse, although it is open to allowing privately run stores in other parts of the province. Five private liquor store operators have been granted licences to sell cannabis in the Northwest Territories. Both territories also have online sales portals, and online purchases are the only way to get cannabis in Nunavut.

How much has been sold? Because of small and isolated populations of the territories, data can be a little more difficult to come by. Arcview says cannabis sales in Yukon, the Northwest Territories and Nunavut last year came to $2.3 million, including medicinal marijuana, representing 0.4 per cent of the national total.

Who is using it? Statistics Canada does not have consumption rate data available for the territories.

What does it cost? More than it does anywhere else in Canada. StatCan reports an average price of $10.36 per gram in Yukon and $14.45 per gram in the Northwest Territories. It has no cost data from Nunavut since prior to legalization, when the average cost was $15.24 per gram.

Future forecast: The territories make up 0.3 per cent of Canada’s population, but Arcview’s forecast calls for their share of marijuana consumption to rise from 0.4 per cent to 0.5 per cent by 2024. This will leave them as a $27-million market for cannabis, when medically prescribed versions of the drug are included in the total.