The Ontario Cannabis Store published its quarterly review for Q2 2021 and reported successes in most, if not all, areas. Legal market share (versus the illegal market) increased from 47.1% to 54.2% during the quarter and a record 56 million grams of cannabis were sold in the province.
Proud of Q2 Results
Compared to the first quarter of 2021, sales increased 28%, arriving at nearly $394 million for the quarter. Being the largest province in Canada by population and store count, Ontario pulled in the most sales of any province during the quarter, making up almost 39% of total sales. Ontario also leads the pack when it comes to product selection, having brought in 389 new products this quarter for a total of 1842 SKUs for retailers and customers to choose from.
Speaking of retailers, by the end of Q2 there were 1115 brick-and-mortar storefronts operating in 194 different communities. Of those 1115 stores, 288, or just over 25%, are operated by 10 corporations, each with 15 or more stores each. Compared to last quarter, 34 new communities have cannabis stores, bringing down the average distance between customers and cannabis stores to 4.6 km.
“The data this quarter shows promise and is a testament to the resilience and dedication of all those within the industry,” the report reads. “The OCS will continue to focus on serving the needs of its consumers and ensuring access to safe, legal, regulated cannabis throughout the province.”
Market Share
Of the total $394 million, retailers earned 96% of it, bringing in $376.4 million. This share is up from the previous quarter, where the OCS earned 8% of sales, rather than just 4%. According to the OCS, its decreased market share is due to the increase in storefronts, as well as the reopening of the province as public health measures like store capacity eased.
In fact, the OCS reports that despite the increase in stores, each store made around 6% more in Q2 than the previous quarter, accounting for around 5,000 more grams sold, or an average of $363,000.
When it comes to products, customer preferences fluctuated during the second quarter. Dried flower, which maintains first place, dropped 4%, capturing just over half (52%) of the market share. Customers seemed to be looking for a quick and convenient product to enjoy the summer, because pre-roll’s share increased 4% to 19%, knocking vapes into third place with 13%. Edibles (3%) and concentrates (2%) round out the top five, with the remaining five categories making up less than 7% of the market share.
Customers Learn, Not Shop, Online
According to OCS data, 34% of customers who visited a retail store during the quarter only shop in-store, while 12% only shop online. Just over half (52%) say they use both. When it came to pre-purchase research, however, many more customers were visiting OCS.ca. When asked, 56% of customers said they use the OCS website for researching products before they purchase, along with 43% who use other cannabis review websites or ask friends and family (36%). Around 30% credit budtenders or in-store product listings (19%) for helping them choose the right product, with social media websites like Reddit coming in close behind at 27%.
This thirst for knowledge is evident in existing and new customers alike, with the most important factors in choosing their purchases becoming more refined. While all customers look for quality, potency, price, and product descriptions when making a purchase, returning customers are now focused on a store’s product selection, flavour profiles, and environmental or sustainable packaging. New customers, who look for product descriptions and photos when making their decision, may not have the experiential knowledge to make the same specific choices as returning customers, but it’s clear they are looking for it.
OCS data for Q2 2021 shows that, at least by the end of September, the cannabis industry still had room to grow in Ontario. On top of that, customers new and returning are eager for knowledge about products so they can find the right one.