Legal cannabis in Ontario is beginning to chip away at the firm hold that illicit providers have on the cannabis market. According to a newly released report from the Ontario Cannabis Store (OCS), legal cannabis’s share of the market is nearly four times larger than it was at the end of 2018.
Before brick-and-mortar stores opened in Ontario, OCS claimed only 5.4% of the market and licensed retailers now hold 19% of the market share and OCS expects that number to climb quickly. Since the AGCO opened up retail licensing to non-lottery winners in April of this year, hundreds of applications have flooded in for retail stores all over Ontario. On March 31, 2019, Ontario had 53 stores licensed and that number has already climbed to 77 as of May 31 with many stores waiting for authorization to open.
OCS had 1500 products on offer in March and that product selection will be increasing dramatically this year as more Cannabis 2.0 products come into the market.
Considerable differences in prices also stood in the way of some consumers adopting legal cannabis. To combat this, the OCS slashed prices on dried flower, lowering the median dried flower price by 25%. This amounted to an approximately $2 price drop for dried flower. They believed that by providing new and exciting products that are safe and affordable, they may be able to get a leg up on their competition. Overall, the average price for OCS cannabis last year was $8.56, making it much easier to compete with the illicit market, which sells a gram for $8.23. Retail stores are a bit higher priced at $10.84, but consumers have shown they are willing to pay a little bit more for the in-store experience.
With more access to legal cannabis, a wider selection of products, and more competitive pricing, Ontario looks to be on its way to dramatically reducing the black market.