Nearly 80% of Canadian’s now source their cannabis solely from the legal market, marking a stark shift away from the illicit market seven years after legalisation.
A new report from the International Cannabis Policy Study (ICPS), which conducts annual surveys to assess the impact of cannabis policy in different global markets, found that Canadian consumers report that 78% of all their cannabis came from legal sources in the past year.
One of the primary objectives of 2018’s Cannabis Act, which saw Canada become the first G8 country to legalise adult-use cannabis, was to displace the illegal cannabis market. Yet, for years, a significant portion of the cannabis consumed continued to come from the illicit market.
According to data from ICPS and the Canadian Cannabis Survey (CCS), Canada’s national monitoring survey on cannabis, in 2019, the majority of cannabis flower (54.3%) was sourced from the black market.
This improved gradually over the next few years, with legally sourced cannabis taking a slim majority in 2021 (53%) and 2022 (61%).
However, the market appeared to cross a meaningful rubicon in 2023, when the percentage of cannabis sourced from legal distributors shot up to between 73% (CCS figures) and 84% (ICPS figures).
While lower prices played a key role, researchers say the shift away from the illicit market was driven by a combination of factors, including expanded retail access, diversified product offerings, and growing consumer confidence in regulated sources.
“Prices of legal cannabis products have decreased substantially… with a narrowing differential between the cost of legal and illegal products,” the study found.
The average price gap between legal and illegal dried flower shrank to just $1.49 per gram in 2023, compared to more than $3 per gram in 2019.
But the market shift can’t be explained by price alone. As Canada’s legal industry has matured, more stores have opened across the country, increasing convenience and reducing the need to rely on unlicensed sources.
The legal market also now offers a wider range of sophisticated products, such as cannabis capsules and drinks, that are less accessible through illicit channels.
“Consumers were most likely to report purchasing all their capsules and drinks from legal retail sources… due to their sophisticated manufacturing processes and costly shipping expenses,” the report notes.
Legal products are also subject to quality control standards, which may appeal to risk-averse consumers, particularly in the wake of safety concerns around unregulated vapes.
The post Overwhelming Majority (80%) of Canadian Cannabis Now Sourced from Legal Distributors in Major Turnaround appeared first on Business of Cannabis.
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A new report from the International Cannabis Policy Study (ICPS), which conducts annual surveys to assess the impact of cannabis policy in different global markets, found that Canadian consumers report that 78% of all their cannabis came from legal sources in the past year.
One of the primary objectives of 2018’s Cannabis Act, which saw Canada become the first G8 country to legalise adult-use cannabis, was to displace the illegal cannabis market. Yet, for years, a significant portion of the cannabis consumed continued to come from the illicit market.
According to data from ICPS and the Canadian Cannabis Survey (CCS), Canada’s national monitoring survey on cannabis, in 2019, the majority of cannabis flower (54.3%) was sourced from the black market.
This improved gradually over the next few years, with legally sourced cannabis taking a slim majority in 2021 (53%) and 2022 (61%).
However, the market appeared to cross a meaningful rubicon in 2023, when the percentage of cannabis sourced from legal distributors shot up to between 73% (CCS figures) and 84% (ICPS figures).
While lower prices played a key role, researchers say the shift away from the illicit market was driven by a combination of factors, including expanded retail access, diversified product offerings, and growing consumer confidence in regulated sources.
“Prices of legal cannabis products have decreased substantially… with a narrowing differential between the cost of legal and illegal products,” the study found.
The average price gap between legal and illegal dried flower shrank to just $1.49 per gram in 2023, compared to more than $3 per gram in 2019.
But the market shift can’t be explained by price alone. As Canada’s legal industry has matured, more stores have opened across the country, increasing convenience and reducing the need to rely on unlicensed sources.
The legal market also now offers a wider range of sophisticated products, such as cannabis capsules and drinks, that are less accessible through illicit channels.
“Consumers were most likely to report purchasing all their capsules and drinks from legal retail sources… due to their sophisticated manufacturing processes and costly shipping expenses,” the report notes.
Legal products are also subject to quality control standards, which may appeal to risk-averse consumers, particularly in the wake of safety concerns around unregulated vapes.
The post Overwhelming Majority (80%) of Canadian Cannabis Now Sourced from Legal Distributors in Major Turnaround appeared first on Business of Cannabis.
Continue reading...
