OCS and legal marijuana dispensary sales not meeting expectations

Published Apr 12, 2019 09:00 a.m. ET
AP Photo/Marcio Jose Sanchez

On October 17 of 2018 Canadians officially gained access to legal marijuana through government-approved sources like OCS and licensed dispensaries which seem to have gotten off to a rocky start. Still, operators and government officials remained hopeful, but the number simply aren’t adding up to anywhere near what was expected. The same trend is holding true for states that have had legal marijuana dispensaries for anywhere from 1-5 years leading many to wonder what the reasons are for such low sales among a population that so fiercely fought for the right to obtain, grow, and enjoy cannabis not too long ago.  

The statistics

These are only a handful of the world's leading legal marijuana markets and the income that they generated immediately after legalization as well as reported weekly earnings up until now.

Ohio (medical): $1.85 million in the first two months and 248000 weekly since then.

Pennsylvania (medical): 1.32 million the first year and 197000 weekly since then.

Colorado (medical and recreational): 1.24 million in the first year and 241000 weekly since then.

Canada (medical and recreational): 3 billion in the first year and 247 000 weekly since then.

Suspected reasons for lack of customers

There are many reasons that licensed growers and marijuana dispensaries are citing as major reasons for declining sales.

1. Cost: The most common reasons that Canadians seem to be avoiding OCS and other legal marijuana dispensaries is the incredibly high cost that products are selling for. The average gram of cannabis that is sold through legal avenues costs an average of $12-$20 each, where the black market offers prices that are much more competitive and almost half the cost with an average ranging between $5-$10 per gram. With stagnant wages and sky-high housing costs, many Canadians just can’t afford to choose the legal option. Especially in situations where a person is medicating and requiring cannabis for medical use daily. This is mainly due to the government's taxing that doesn’t allow for enough room for marijuana dispensaries to make a good profit which is required in such a new industry.

2. Lack of access: Most of the regions touched on here have also been affected by an incredibly slow and spotty roll out of dispensaries that have severely limited customers access. Some like Ontario have had absolutely no legal marijuana dispensaries and will not get to until after April 1st. Even once they do open their doors to the public, there will only be 21 locations to service the entire province with most slated for dense population centers like Niagara Falls and London. OCS is accessible by everyone there, but placing an order comes with a side of a minimum three-day waiting period plus a fee for delivery.

3. Lack of choices: Most dispensaries have had a difficult time keeping up with demand using legal marijuana rather than a product that is sourced from grey market growers.

4. Low quality: Much of the cannabis that is currently available in dispensaries doesn’t seem to compare with street level quality. Black market weed is often more potent, and with OCS having troubles with mold playing long awaited deliveries, many Canadians simply don’t want to take that chance and are used to a much stronger product for a lower price.

5. No visual: If you purchase from a government dispensary like OCS you do not get the option to look, smell, or feel the product before choosing to buy it. Anyone that smokes cannabis knows that the taste, aroma, and sight of a bud is half of the experience and a lot of folks are opting out of giving up that luxury in exchange for legal weed.

Potential fixes

The biggest changes we expect to see in the future of legal marijuana is fair and equal access and a more competitive product pricing that makes a trip to a cannabis dispensary much more appealing and affordable for the average person. A loosening of regulation might be necessary to give the legal marijuana industry an excellent chance to flourish while putting black market dealers out of business.

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