Recreational cannabis sales in Canada surpass 5 billion $CA in 2023

According to Canadian government data on cannabis sales in Canada in 2023, the sector saw a significant increase, reaching C$5.07 billion (€3.5 billion) in retail sales of cannabis for adult use, up 12.2% on the previous year.

Market maturation and slowing growth rate

As the Canadian cannabis market matures, it is experiencing a natural slowdown in growth rates, reflecting a period of stabilization after the initial surge that followed the legalization of adult-use cannabis in 2018. Brad Poulos, Professor of Entrepreneurship at Metropolitan University of Toronto, notes with MJBiz that «the vast majority of growth in legal cannabis sales comes from consumers in transition from the illicit market».

Despite the growth in legal cannabis sales, However, the illicit market still has a significant share, estimated at around 40% by Mr. Poulos. Other projections place it at 30%. Mr. Poulos believes that the narrowing of the gap between the legal and illicit markets is due in particular to the expansion of product formats and improved access to legal stores.

Product preferences and price trends

The cannabis consumer preferences have evolved, with notable changes in product categories. Pre-rolled joints, in particular, experienced exceptional growth, capturing 31.4% of total sales in 2023, almost on a par with dried cannabis flowers.

What's more, if the price of cannabis have fallen in most categories, the rate of price compression has slowed compared with previous years. This trend indicates a certain stabilizing the cannabis market, Pre-roll prices remain stable due to strong demand.

Monthly sales data reveal fluctuations in consumer behavior and market dynamics. Despite a general decline in sales until December, monthly sales experienced a resurgence, reaching C$441.2 million, a year-on-year increase of 3.6 %. Ontario was the main driver of this growth, with a notable 19.3% increase in sales in December.

Persistent industry challenges

Despite global growth, the Canadian cannabis industry continues to face major challenges. Visit high excise taxes and the persistent presence of the illicit market are all obstacles to the growth and viability of the legal market. In addition, the industry expects a legislative review of legalization, with uncertain results for producers and retailers.

For the future, industry experts predict continued growth in cannabis sales in Canada, although at a more moderate pace. Poulos estimates potential growth of 10% in 2024, mainly due to the continued transition of consumers from the illicit market and the expansion of legal cannabis stores in the underserved regions such as Quebec.