Canada’s medical cannabis exports jump to CA$220 million as domestic sales fall

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Canadian exports of medical cannabis hit an all-time high last year as the county’s licensed producers continue to diversify from the competitive local market in favor of pursuing top-line opportunities overseas.

In the 2023-24 fiscal year, Canada exported roughly 218 million Canadian dollars ($189 million) worth of medical marijuana products for commercial and scientific use, MJBizDaily has learned.

That’s an increase of more than 36% from the previous year’s exports of CA$160 million.

The data from regulator Health Canada paints a picture of brisk and consistent growth in the export sector.

In previous years, the revenue of cannabis exports reported by licensed producers was:

  • CA$8 million in 2019-20.
  • CA$39 million in 2020-21.
  • CA$107 million in 2021-22.

Health Canada said the 2023 data is subject to revision as it continues to be validated.

Some Canadian cannabis companies have looked to capitalize on opportunities overseas, in part to dodge a multitude of hurdles in their home market.

Those challenges include an onerous excise-tax regime imposed on the industry by the federal government as well as provinces gouging businesses via government-owned wholesalers, according to experts.

Deepak Anand, principal of ASDA Consultancy Services in Surrey, British Columbia, suggested that Canadian marijuana producers benefited from a first-mover advantage after Canada legalized marijuana in late 2018.

“On the one hand, Canada’s reputation for producing high-quality cannabis products at competitive prices has positioned it as a preferred supplier in the global market,” he said.

“On the other hand, slow regulatory developments in other lower-cost jurisdictions, such as Colombia, have limited their ability to compete effectively.”

Countries that had declared their intention to be net exporters of cannabis – including Australia, Colombia, Israel, Jamaica and Portugal – have faced various challenges exporting meaningful quantities.

Anand said challenges faced by producers in other countries provided Canada with a significant advantage, helping to drive an increase in cannabis exports from Canada.

Domestic sales falling

The trend in exports contrasts with Canada’s domestic market, which has been in freefall for a number of years.

In the 2023-24 fiscal year ended in March, Canada’s medical marijuana spending was CA$355 million, according to Statistics Canada data.

That marked a 13% decline from the previous year’s CA$409 million.

The figure for 2023-24 represents a 41% decline from the peak in 2019-20, when Canadians spent CA$603 million on regulated medical marijuana products.

The last time medical cannabis spending was this low was in 2016-17, before recreational marijuana was legalized.

Mitchell Osak, president of Toronto-based Quanta Consulting, said the medical marijuana industry is being hobbled by systemic problems such as excessive taxes, low insurance reimbursement and access to products via traditional pharmacies.

“It also doesn’t help that patients can often get the exact same product from the same LP for a much cheaper price in the adult-use market,” he said.

“All large LPs struggle with a declining domestic medical cannabis market and slowing adult-use growth, punitive excise taxes and hyper competition.

“The savvy LPs have discovered a new, lucrative channel for profitable and high growth: exporting medical cannabis.”

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