The company behind Canada’s census and many other crowdsourced data collection programs called Statistics Canada has predicted that the sale of legal cannabis in Canada could reach as high as $1.02 billion from the launch of the retail market on October 17 through the end of 2018. The Q4 estimates of StatCan were derived from census population data and the National Cannabis Survey statistics. Moreover, above the outstanding projection in sales, StatCan also predicts a total decrease in the black market as consumers will now buy legally.
Canadians Could Spend Over $1 Billion on Legal Weed in 10 Weeks
The $1 billion dollar sales projection of Statistics Canada’s isn’t a yearly figure. However, it’s the estimation of the company based on cannabis consumers in Canada will spend on marijuana in just the final 10 weeks of 2018, and that’s not the expected spending of Canadians on cannabis. The $1 billion figure is based only on legal sales of cannabis. Furthermore, an additional $250 million to $315 million in illegal cannabis sales, will give us the full picture of StatCan’s marijuana purchasing projections.
The increased demand for legalized marijuana in Canada presently stands at 5.5 million consumers. According to the projection of StatCan, 1.7 million individuals will continue buying marijuana in the illegal market after the drug is fully legalized in October. Nevertheless, these estimations are based on surveys and census data. It will mostly depend on the number of cannabis consumers that will make the change and how many new consumers will be available when the drug is legalized.
The Black Market Will still make up a Noteworthy Portion of Cannabis Sales
Singlehandedly, the $1 billion dollar figure, which could be as small as $815 million, is very high. However, taking into account data from the beginning of the year, during the build-up to legalization, it draws the perfect picture. The annualized second-quarter data of Statistics Canada’s states that Canadians spent $5.7 billion on cannabis-infused products.
However, legal and illegal sales are the key to the data. Based on the $5.7 billion (annualized) spent by Canadians on cannabis in Q2, 85 percent of it, or about $4.8 billion were based on illicit purchases. The rest were based on medical cannabis purchases. This is true because the strong illicit dispensary network in Canada has been meeting consumer demand ahead of legalization.
Nevertheless, in the context of post-legalization predictions, StatCan states that the sales of illegal marijuana will substantially fall from $1.2 billion six months ago to around $300 million after legalization. If this prediction happens, there will be a huge shift in Canada’s cannabis market. The sale of illegal cannabis could still account for 24 percent or more of total cannabis sales after October 17, which is significantly less than 85 percent.
However, data processing always tend to have some small inconsistencies in the data. If Canadians spent over $1.5 billion in Q2 Canadians on (mostly illicit) cannabis, what will account for the gap between the $1 billion in StatCan estimates on legal sales and the paltry $315 million in illegal sales? That’s more than a hundred million dollars still unaccounted for by the present projections. Sooner or later, we’ll know whether that purchasing power continues to feed the black market or redirects toward legal cannabis deals.