Recreational cannabis sales in Eastern Canada punished by lack of retail expansion

Nova Cannabis and Juul stores in Toronto.

Adult-use cannabis sales fell sharply in September in every Eastern Canadian market except Quebec, a reflection of the industry’s inability to open new stores to meet consumer demand in those provinces.

Overall sales of recreational marijuana in Ontario, Quebec, Newfoundland, Nova Scotia, Prince Edward Island and New Brunswick declined 5.5% to 71 million Canadian dollars ($53 million) in September from the previous month.

The fall would have been steeper had Quebec not recorded a 5% increase to CA$26 million.

Quebec was the only province among the group to add to its roster of cannabis stores in the month by increasing its outlets by four, according to the Société québécoise du cannabis.

Canada’s largest consumer market, Ontario, remains stuck at 24 cannabis stores.

Ontario experienced a 6% decline in the amount of money spent on marijuana, recording CA$31.7 million in sales.

The steepest declines in Eastern Canada were seen in New Brunswick, which saw sales collapse 40% to CA$3.2 million, and PEI, where receipts fell 15% to CA$1.4 million.

Eastern Canada’s struggles helped pull down Canada’s overall sales in September to CA$123 million, a month-over-month decline of 2.4%.

Western Canada – where new cannabis stores opened their doors in September – experienced a rise in retail sales.

Cumulative receipts for adult-use cannabis products in British Columbia, Alberta, Saskatchewan and Manitoba rose 2.6%, to CA$50.8 million.

Alberta had 7% more stores licensed in September (283) versus August (265), said Chris Damas, editor of Ontario-based BCMI Cannabis Report.

He also noted that the number of private stores in British Columbia rose to 77, with another 157 in the queue.

“It has been shown that consumers prefer conveniently located bricks-and-mortar stores to buying at government online stores, so they can see and smell the product they are buying, and to ensure confidentiality,” he said.

Damas said store openings in underserved locations are important for retailers, whether they’re privately or provincially owned.

“They allow the legal industry to better penetrate markets currently served by illicit dealers and illegal online dispensaries,” he noted.

‘Market has spoken’

With new products (edibles, extracts and topicals) not hitting store shelves in meaningful quantities until next year, store openings will continue to be the most important driver of retail sales growth – or lack thereof – in Canada for some time.

Craig Wiggins, managing director of market researcher TheCannalysts, said consumers do not like shopping online for a variety of reasons.

“The market has spoken,” he said. “Shoppers want to go and peruse a store. New consumers into the market definitely want to go into a store versus doing it online.

“Online for a new consumer is just way too difficult to figure out where to start.”

Canada’s monthly retail sales of cannabis can be viewed here.

Matt Lamers is Marijuana Business Daily’s international editor, based near Toronto, Ontario. He can be reached at [email protected].

One comment on “Recreational cannabis sales in Eastern Canada punished by lack of retail expansion
  1. Steve Quinton on

    Follow the money…..there is a reason why central Canada government prefer illegal cannabis dominance to the legal market.

    Reply

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