Legal weed sales outpace the black market for the first time ever
Canada is in its third year of being home to a legal cannabis market, but since the very beginning, licensed vendors and producers have had a difficult time competing with the black market. It’s a problem that plagues legal industries all over the world, but there are few places where it’s stayed so far out of control, and that’s why, when Statistics Canada released third-quarter data for 2020, which showed legal adult-use transactions way ahead of illicit ones, pretty much everyone in the legal green market rejoiced.
An increase in sales revenue
The increase in adult-use sales can be attributed to several factors that helped to force a change in 2020, with one of the biggest being the COVID-19 pandemic. As fear over the virus spread and licensed dispensaries garnered essential status, consumers happily spent more of their hard-earned cash through more reliable dispensaries, many of which made the change to delivery and other safer contactless methods of pickup.
The virus made it harder for black-market vendors to get in touch with their regular consumer base, but it isn’t the only influential factor in how 2020 turned out for legal weed. Dispensary owners and producers have been actively working to bring down prices for the last 2 years in an effort to compete against illicit dealers, and a wider menu selection since the introduction of legalization 2.0 isn’t hurting matters either.
With all of these new changes, it really shouldn’t be much of a surprise to see the legal cannabis industry catching up, but will this progress last past the end of the pandemic?
Increased consumer spending on legal cannabis is definitely something worth celebrating, particularly for those who have worked hard to ensure that they’re following all of the rules, but despite this great news, some of the biggest Canadian cannabis companies out there have reported major losses over this last year.
HEXO Corp., Aurora Cannabis and Canopy Growth combined have lost millions after making huge unnecessary investments into production and infrastructure, so this new trend of consumer buying power is going to have to hold up if there is going to be much hope for them to recoup from these losses.
Changes to promote steady growth
Chances are pretty good that at least some consumers will return to their black-market suppliers as restrictions wind down and access to illicit products becomes easier, but industry professionals are hard at work, coming up with a plan to maintain a robust consumer base by:
Cannabis consumers need and deserve affordable products, and both dispensaries and producers and working hard to make that happen.
Cannabis deserts still exist in Canada, but as more dispensaries open up right across the country, it will be easier for more consumers to shop legally, conveniently.
Making products better
One of the biggest appeals of the illicit market is that it boasts a wide selection of cannabis products that cannot be found through licensed vendors, but as regulations adjust and the number of offerings increases, so too will interest in legal transactions.
These new figures might not hold steady as we launch into 2021, but the future is looking much more promising due to this shift in consumer opinion. This is excellent news, considering the massive stock of raw products that producers across the country are currently sitting on. If the legal market is to succeed, it will need to stay competitive, and it looks like industry professionals are rising to the occasion, moving both laws and perceptions to better the cannabis industry as a whole.