It is no secret that cannabis retail sales are still growing despite so many industry issues; including, lower quality cannabis, insufficient number of license issued, unreliable product availability, and slow approval of edible cannabis regulations.
Despite these issues, the legal cannabis industry continues to grow. Sales continue to grow. More licenses continue to be issued. More legislative approving the sale of related products are being passed. Even more producer licenses are being awarded. This all means good news for those who own retail shops in Canada. Cannabis retail businesses will continue to expand and new ones will continue to open as demand increases and prices become more competitive.
2019 earnings for legal cannabis sales
Reportedly retail Cannabis shops, in just five months, brought in $85.6 million from legal cannabis sales as of May 2019. This is a 56% growth in sales since January of the same year. This is great news for those owning retail property in Canada. As sales grows, so does expansion efforts.
The data from Statistics Canada is broken down by province or territory. The provinces with the most sales were Ontario, followed by Alberta and Quebec. These three provinces combined accounted for earnings of $57.45 million, or 67% of the total sales, year to date. Ontario just opened its doors this year to legal cannabis sales and the fact that they are so strong is something to note for retail shop owners and investors of retail commercial real estate.
Cannabis industry size and market penetration
April 2019 recreational sales reportedly jumped to 10.2 tonnes of dry cannabis being sold. That places the legal usage at 18.5 tonnes, or 24 per cent of Canada usage in such a short timeframe. It is estimated that Ontario with its larger population would need roughly 585 retail shops to match the 176 cannabis retail shops in Alberta.
What if more licenses was issued for retail shops and cannabis producers? What if the quality of the cannabis matches the black market? What if the price of $11.99 or more per gram competes with the black market $7.05 per gram? As these scenarios occur, it will fuel more growth. This would also be great news for retail plaza owners, as the demand for retail space would continue to be strong.
The Saskatchewan’s finance minister was quoted stating that the legal price of cannabis must eventually drop. While others noted that adding more licenses to provinces like Ontario, Quebec and British Columbia would mean a demand for more retail shops, which in turn equals a boost in total national sales.
Many believe that the Canadian legal cannabis industry is slowing its own growth with its legislation, restrictions and taxes. Once it gets out of it’s own way and allow the industry to grow organically, even more sales and success will follow.
The legal cannabis industry has brought in sales of $85.5 million in five months, up by more than 56%. It’s a great time to own retail in the strongest Canadian provinces. Contact ReDev to get started.