The Canadian hashish market continues to develop, and Ontario is nowhere close to the retail outlet saturation level: Brightfield

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Canada’s recreational weed market grew 118 percent in 2020.

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Angela Stelmakowich Cannabis retail is likely to be a big part of the upward trend in growth.  /. Cannabis retail is likely to be a big part of the upward trend in growth. /. Photo by Michel Comte / AFP via Getty Images / File

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Retail was the main driver of Canada’s recreational cannabis market, rising 118 percent over the past year. The eagerly anticipated launch of business in Ontario accelerated the pace, and Alberta saw steady growth.

“The opening of retail stores drove growth in 2020,” said Brightfield Group, a consumer insights and market intelligence company for the CBD and cannabis industries, in a new report on Canada’s recreational herb market.

In February, the Ontario Alcohol and Gambling Commission (AGCO) announced it had issued 30 cannabis retail store approvals (RSAs) per week, up from 20 a few months ago. By mid-month, AGCO said it had received more than 1,630 RSA applications and issued 489 RSAs, with 430 authorized provincial cannabis retail stores opening in the province.

  1. Newfoundland and Labrador Liquor Corporation aims to increase the number of retail stores by 50 percent.  /.

    Newfoundland is looking to add more cannabis retail stores and improve delivery times for online orders

  2. FILE: New Brunswick Premier Blaine Higgs speaks to the media in Fredericton, NB on Monday, February 17, 2020.  / CANADIAN PRESS PHOTO / STEPHEN MACGILLIVRAY

    New Brunswick weed retail rights no longer retained on sales block, such as Cannabis NB model

  3. Trang Trinh is the founding director and CEO of TREC Brands.

    The Ontario retail cannabis market is likely to have a year or two at the current rate of growth before saturation

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Ontario led the retail fee but still has plenty of room for more stores, according to the Brightfield Group report. “There is still tremendous potential for more retail stores before the province saturates with its large population.”

Cannabis sales in Alberta – the original pioneer in weed retailing – also rose significantly as the number of private retail stores was not limited.

Cannabis sales in the province “boomed quickly, with no license cap. We expect more large provinces to follow as retail continues to grow. “

Specifically, a graph in the report shows that Alberta had 493 retail stores in early 2020, compared to 574 in early 2021, while Ontario had 145 versus 444, Quebec had 43 versus 61, and BC had 233 versus 339.

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Overall, the Canadian cannabis market – i.e., recreational and pharmaceuticals – was around $ 2.6 billion in 2020 and is expected to grow over the next several years, the report said.

The market value is projected to be about $ 4.2 billion in 2021, $ 5.9 billion in 2022, $ 6.8 billion in 2023, $ 7.4 billion in 2024, $ 7.4 billion in 2024 7 $ .9 billion and reach about $ 8.7 billion in 2026.

The lion’s share of the market throughout the projection horizon is in recreational cannabis, which accounted for nearly $ 8.2 billion in 2026, compared to about $ 499 million for pharmaceuticals. In the leisure sector, “growth will largely subside by 2024, when the market reaches its capacity”.

However, retail is likely to be a big part of the upward trend in growth. The Brightfield Group already sees emerging partnerships between Canadian and US cannabis brands, with Licensed Manufacturers (LPs) “bringing American products to the Canadian market. This underlines the ambition of the Canadian market for consistent quality products with proven value as opposed to pure name recognition. “

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The lion's share of the market throughout the projection period comes from recreational cannabis.  /. The lion’s share of the market throughout the projection period comes from recreational cannabis. /. Photo by AP Photo / Elaine Thompson

The report cites Indiva as an example, which is partnering with Bhang, Wana, Kin Slips, and Ruby Sugar to make food. 48North, Apothecanna produces current affairs; Dosecann develops Dosist Vape products and Pax is working with multiple LPs to provide its pod technology and create co-marketing opportunities.

“With this method, Canadian companies can easily avoid the often costly and lengthy process of targeted branding by using existing and successful models,” the report said. “For American companies, this type of licensing agreement allows them to expand into a sizeable international market without having to set up offices in the country, which gives them additional revenue streams,” he added.

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However, greater retail product variety may not be the only factor that comes into play. Brightfield Group suggests that the surge in value brands and the ability to buy in bulk could also be a growth driver.

“Cheap Buds are also classified as 1.0 products that benefit from excess supply and universal customer access in the country, making them cheap and quick to manufacture and distribute,” the report said. Some brands have adopted the low-cost label, including HEXO’s Original Stash, Tilrays The Batch, Auroras Daily Special, Zenabis’ Re-Up, Aphrias B! NGO and organizational chart SHRED.

FILE: The guests gathered around the 48North booth.  /. FILE: The guests gathered around the 48North booth. /. Photo by CAFA

Citing Canadian figures, the Brightfield Group notes that the price of legal recreational herb is down 10 percent from the third quarter of 2019 – a year after legalization – compared to the same quarter of 2020, in particular, they are better positioned to cope with the illegal To compete in the market. “

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Indeed, the report cites an earlier review of customer insights by the company that stated that “Freund” was the top buying location in Q1 2020 but had shifted to “Private Retail / Pharmacy” by the end of the year .

In terms of product preferences, the Brightfield Group expects the market to continue to be predominantly THC dominant, especially in categories like flowers, which primarily appeal to regular users. However, this will gradually shift towards other THC: CBD ratios as consumers become more educated.

“While Canada has had increasing pain in opening up its adult applications market and is likely to continue to do so in the near future, the longer-term outlook looks positive as provinces – Ontario in particular – begin to relax regulations and expand access to consumers “It says in the report.

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The Brightfield Group anticipates that the market will continue to be predominantly THC-dominant, especially in categories like flowers, which primarily appeal to regular users.  /. The Brightfield Group anticipates that the market will continue to be predominantly THC-dominant, especially in categories like flowers, which primarily appeal to regular users. /. Photo by MJ_Prototype / iStock / Getty Images Plus

“The gradual expansion of the product categories approved on the market (Cannabis 2.0) had the greatest impact on the market and resulted in gradual growth,” notes the Brightfield Group. “Now that virtually all cannabis products are federally approved for formal sale – for both medicinal and adult uses – the way has been paved for scaled growth and the development of a legal market that can compete more effectively with the black market. ”

In general, market growth is also being driven by the expansion and diversification of quality products at reasonable prices, as well as “developing a more market-friendly regulatory environment,” which the report says is likely.

“This will review (lower) tax rates, allow for more efficient and comprehensive licensing and less provincial middlemen in the supply chain, as well as easing marketing and advertising restrictions, as well as many provincial-level measures (such as those banning vapes),” adds the report added.

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