Predictions for Canadian cannabis sales fall short of expectations
If tax revenues help to run the country, then the government wants the cannabis industry to pull up their socks. Cannabis did not make the cut where the government saw tax contributions. The less than expected revenues were disappointing. Predictions were for $35 million in tax revenue, but alas only half of those numbers were realized from the revenues of 2018-2019 as reported.
Let's look at the predicted numbers through the crystal ball
The forecasted numbers for legal cannabis sales have fallen short. The projected numbers analysts were telling us that it was 4.34 billion dollars in cannabis sales. These predictions applied to the first year of cannabis legalization in Canada, but the reality is that the real numbers were much lower than anticipated and voiced before the legalization of cannabis back on Oct 18, 2018.
According to the Deloitte research group, the majority of the cannabis sales number would be from authorized dealers, not the legacy market. However, StatsCan data indicates the legacy market represents about 75% of the cannabis sales for the first year cannabis was legalized.
Now, if you look at those same numbers today, while the world is battling the COVID-19 predictions may surprise some people. Canadians used their money to purchase $1.2 billion on recreational cannabis in the first year since legislation. Alas, cannabis sales still fell short of expectations, but the future looks a little bit brighter for 2020 cannabis sales.
Statistic Canada has promising news, and they have reported to cannabis news sources that cannabis sales have risen for three consecutive months straight. The numbers for cannabis sales predictions in December were reported through as $146 million, which means that they’re in for a pretty big payout if these trends continue.
Moving forward to 2020
In comes the COVID-19 to add to the struggles that legal cannabis sales and marijuana stocks were already facing. Putting many of the cannabis shops into lockdown, and those that stayed open were forced to utilize a different delivery service or type of stock. The deeming of essential services put cannabis sales into a different mode of serving the consumer, as they are just trying to survive.
Still today, the cannabis industry is not showing remarkable profit growth. Cannabis sales growth has been, to say the least, disappointing for investors monitoring marijuana stocks. As always, some people think the cup is half-full and believe that there is a long-term potential still available for the growth of marijuana stocks. However, a word to the wise has been given by investors who said to analyze marijuana stocks as one would do for any other kind of investment.
As some of the marijuana stocks lick their wounds, others celebrate the victories achieved. There is a light at the end of the tunnel. Despite the many setbacks that cannabis sales and stocks have suffered, the experts say to hold on to your hat, because the industry is on the way back from an unexpected decline in both cannabis sales and stocks.
Some of the insights include:
- Global legalization is on the rise the skies over many countries are turning green
- CBD market is growing and will continue to thanks partially to the US Farm Bill Act.
- Cannabis extraction companies are perhaps the biggest winners with the initiation of Cannabis 2.0