The number of cannabis stores in Canada has stabilized, and the cannabis sector started to decline in 2023, according to a new Statistics Canada report.
The report looks at the state of Canada’s cannabis industry five years since the legalization of non-medical cannabis in October 2018. Canada is the first major industrialized country to provide legal and regulated access to cannabis for non-medical purposes.
Cannabis Use Across Canada
Cannabis use before legalization had been steadily increasing over the last 30 years. The rate of cannabis use more than doubled between 1985 and 2017 from 5.6% to 14.8%.
Source: Statistics Canada
Cannabis use continued to change from 2018 to 2020 with use up between 11% and 27% across the country by the fourth quarter of 2020.
Source: Statistics Canada
By 2021, the rates of past-year cannabis use stabilized across Canada, although regional rate differences remain. For instance, the rates of cannabis use were higher than the rest of Canada in BC, Alberta, Ontario, Nova Scotia, and PEI, whereas cannabis use in Quebec remained lower.
Some studies conducted during the pandemic suggest that cannabis consumption may have increased in response to the changed daily routines and related stress. Whether the higher rates of cannabis use reported during the pandemic will remain is yet to be determined.
Cannabis Use Demographics
Cannabis use is most common among 18- to 24-year-olds in Canada. Use among 15- to 17-year-olds has not increased with legalization. But use in other age groups rose from 2011 to 2021.
Source: Statistics Canada
Stores Stabilized and Sector Declining
As expected, access to legal cannabis has increased since the Cannabis Act came into force. By the end of 2018, there were fewer than 200 legal stores. By the end of 2020, the number of stores had increased nearly eightfold then doubled again by the second quarter of 2022. Data from the first quarter of 2023 suggest the number of stores has stabilized.
Source: Statistics Canada
Canada’s cannabis sector grew from October 2018 to December 2022 but started to decline in 2023. The cannabis sector accounts for about 0.5% of the total Canadian economy.
Retail sales of non-medical cannabis are a growing fraction of the retail sales of alcohol. From 2019 to 2022, liquor retailers sold on average $26 billion worth of alcoholic beverages annually in Canada. In comparison, in 2022, the annual sales of non-medical cannabis were $4.5 billion.
Source of Cannabis
More Canadians are getting cannabis legally or growing it. An estimated 68% of cannabis users reported obtaining at least some of the cannabis they consumed from a legal source in 2020, higher than before legalization in 2018 (23%) and just after legalization in 2019 (47%).
Growing cannabis, either themselves or by someone else, was a supply source for 14% of consumers in 2020, higher than in 2018 (8%) or 2019 (9%).
By the first half of 2023, more than 70% of the total value of cannabis consumed in Canada was from a legal medical or non-medical source. This is an increase from 22% in the fourth quarter of 2018 when legalization had just begun.
Product Trends
Dried cannabis is the most popular product sold in the legal market accounting for 71% ($2.8 billion) of total value of legal, non-medical, retail sales in 2021 and 2022. It is also the product used by most consumers.
Self-reported National Cannabis Survey data show that about 7 in 10 Canadians who reported using cannabis in 2020 consumed dried flower or leaf, while 41% reported consuming edible cannabis products.