Canada, Cannabis and COVID
When COVID-19 hit in early 2020, many retail sectors faced an uphill battle in meeting sales projections. But just how did the cannabis industry perform throughout the year? Here we take a deeper dive into the wider implications of marijuana and COVID and analyze how the latter influenced our consumption habits.
Marijuana and COVID
According to the retail sales figures from Statistics Canada, Canadians bought over $2.6 billion worth of cannabis products throughout 2020 — a substantial increase in the amount purchased throughout 2019.
According to StatsCan, Canada’s recreational market saw a growth of 120 percent from 2019. This is represented by the revenue generated from the roughly 1,400 licensed cannabis dispensaries operating across the country — a figure that’s up from the 760 outlets in operation at the end of 2019.
Marijuana and COVID – Meeting Increasing Demand
The sales gains in 2020 coincide with the damaging economic effects of COVID-19. As cannabis demand surged, the recreational sector saw a host of new players enter. Stores continued to open throughout the year right across the country, and new product legislation for edibles and extracts meant that many new consumers were drawn to the market.
Marijuana and COVID – Inaccurate Forecasts
Despite the fact that cannabis sales increased overall in 2020, market analysts actually predicted greater sales for the year. BDS Analytics boldly predicted that Canada’s cannabis market would reach $3.3 billion, while other analysts predicted sales to hit even higher figures.
Despite their optimism, market analysts weren’t aware of the impact that COVID-19 would have. The broader economy suffered a downturn in many sectors as retailers were forced to adapt to ever-changing circumstances.
While the numbers do sound promising, many market analysts have dampened expectations. Many of them expect sales in the first quarter of 2021 to be lower than expected due to the COVID-related lockdowns that occurred across the country through the first two months of the year.
Despite the setbacks caused by COVID, several market observers expect Canada’s cannabis sales to reach between $5 billion and $8 billion once the market matures.
Marijuana and COVID – Slowing Sales
Some market analysts predict that the slow pace of growth in cannabis sales may extend yet further.
While sales missed their projected expectations, many experts, including Stifel Analyst Andrew Carter, expect Canadian cannabis sales to recover somewhat in 2021 and potentially climb to $4 billion over the course of the year. Much of the growth is expected to come from Ontario, which led the country with $727.5 million in sales last year.
Due to the COVID-19 pandemic, Canadian cannabis sales failed to meet projected targets. However, with the expansion of retail access in late 2020, coupled with the rollout of second-generation products, the future still looks bright for the industry.