Ontario dominates provinces in selling recreational cannabis
Retailers in Ontario sold the most cannabis of any province in the first year of legalization, even though there was only one online store and 24 brick-andmortar stores in operation for most of that period, according to new Statistics Canada data.
Ontario accounted for $217 million in recreational cannabis sales — or 24 per cent of the overall Canadian market — from October 2018 to September 2019, followed by Alberta and Quebec, at $196 million and $195 million, respectively.
The year following legalization saw more than 400 brick-andmortar stores established across the country. Total adult-use cannabis sales from online retail stores amounted to $908 million from October 2018 to September 2019, far short of many estimates put out prior to legalization.
For instance, a June 2018 report from CIBC estimated that legal cannabis sales could reach $6.5 billion by 2020, with the potential to yield $1 billion in EBITDA. A similar report by Deloitte had forecast the legal cannabis market to generate $4.3 billion in sales in the year following legalization.
The Statistics Canada data also observed a sharp decline in the number of consumers who purchased cannabis online, in tandem with the growth of the number of retail stores across the country. The share of online sales declined from 43.4 per cent in October 2018 to just 5.9 per cent the following September, while the number of brick-andmortar stores rose by 88 per cent between March and July 2019.
Online retail stores — most operated by provincial wholesalers — made about $120 million in the year following legalization, while physical stores raked in the remaining $788 million in sales.
Government-run stores have been struggling. Ontario Cannabis Retail Corp. which operates the Ontario Cannabis Store, lost $42 million in its latest fiscal year ending March 31, 2019.