|Cannabis in Canada is legal for both medicinal and recreational purposes. / Photo by Dmytro Tyshchenko via Shutterstock|
While some businesses are struggling to stay afloat during the pandemic, the marijuana industry in Canada is thriving. Cannabis in Canada is legal for both medicinal and recreational purposes.
Cannabis in Canada
Monthly sales data released by the government agency Statistics Canada (StatsCan) showed that Canadians spent about $150 million on weed in February, slightly down from the prior month. The agency added that Canadians bought $5.16 million of pot in February compared to $4.97 million in January. This resulted in an annualized revenue rate of $1.9 billion
Online pot purchases in Ontario grew 600%
Purchases of cannabis in Ontario, the largest economy in Canada, also rose by as much as 600% since the beginning of March. The growth was attributed to the stockpiling of consumers during the Covid-19 pandemic. The Ontario Cannabis Store (OCS) sales data indicates that for the last six weeks, when the pandemic hit the country, legal pot has become a more habitual purchase than just a one-time novelty.
Although it may still be too early to gauge how the global health crisis will impact the legal cannabis sales in the country for the long term, the OCS report already shows a highly precise glimpse of how Canadians are consuming weed during the lockdown.
Online orders of Cannabis only averaged below 5,000 daily until April 3 this year when it reached 13,691. It was also the same day Ontario declared cannabis stores as non-essential businesses. Four days later, these stores reopened but only for delivery service and curbside pickup. The chief commercial officer at the provincial retailer Cheri Mara said via BNN Bloomberg that “restricting access would have created an opportunity for the illicit market.”
|The daily sales of cannabis held steady nearly two weeks later. / Photo by Federico Magonio via Shutetrstock|
The daily sales of cannabis held steady nearly two weeks later. It stood at around the 9,000 level, nearly five times the amount made before the pandemic hit the country. More than one-third of all online cannabis orders were labeled as new OCS customers too. Mara added that the market is going to stabilize. The chief commercial officer likened it to the idiomatic expression of “the toothpaste is out of the tube,” which means a situation that cannot be recovered or reversed to its original state.
Cannabis firm stock jumped 19%
Canadian-licensed marijuana producer Aurora Cannabis Inc. achieved performance greater than expected during the early months of the pandemic. This was despite the imposed restrictions to make only essential purchases. Its shares jumped by 19% in the recent pre-market trading, reports Business Insider. This shows how the cannabis seller achieved a good quarter.
Aurora Cannabis Inc.’s Chairman and Interim CEO Michael Singer expressed how “incredibly proud” he is of the Aurora team for working through the challenging times to maintain the uninterrupted operations at all of their production facilities in the country and make sure that they continue to meet the needs of their consumers and patients. He added that he was “pleased” with the company’s progress in the quarter.
The Alberta-based company shared that its 3Q revenue, after subtracting the excise taxes, jumped to C$755 million from C$65.1 million in the year-ago quarter. Aurora executives also said in the earnings call that the firm observed that the stockpiling in March caused the surged in the sales of pot.
While its sales increased, Aurora reported a loss of over $1 billion in the nine months ending March. What impacted its cash cost to produce dried marijuana per gram was the inexpensive weed sales. Yet, the company said that its main focus is still to capture market share for the near term rather than prioritizing the revenue goals.
Some cannabis firms were also able to raise some financing despite the challenging environment heightened by the pandemic. Global cannabis company Flowr Corp. said it was able to raise $20 million in a private placement round while cannabis retailer Fire & Flower enter into a commitment letter to obtain $10 million in two separate loan facilities.
Connecting displaced marijuana professionals
Canada’s leading source for cannabis jobs Cannabis At Work has also recently launched a public database to connect displaced marijuana professionals with a potential employer. The plan comes after some struggling cannabis companies eliminated 2,700 positions in the country in the past nine months, including 910 jobs after the pandemic began. The employment agency said that such a number is already equivalent to 30% of the total workforce in the cannabis industry.
The database serves as a resource for employers in the cannabis industry to access talent if they are actively looking for work. Experts believe that despite the broad layoffs before the pandemic, the sector is growing quickly. This means that businesses will still need to hire a broad range of marijuana professionals in the country.
Canadian marijuana sales
Statistics Canada shared that licensed cannabis store sales in October 2018 reached CA$53.68 million and CA$53.73 million in November. The rundown of these sales are as follows: December 2018 (CA$57.34 million), January (CA$54.88 million), February (CA$51.66 million), March (CA$60.94 million), April (CA$74.58 million), May (CA$85.81 million), June (CA$91.46 million), July ( CA$107.36 million), August (CA$125.95 million), September (CA$122.93 million), October (CA$128.98 million), November (CA$135.31 million), and December (CA$146.25 million).
In a national cannabis survey in the country by StatsCan, it also shows that majority (26%) of cannabis users are 25 to 34 years old, followed by 15 to 24 years old (23%), 35 to 44 (16%), 55 to 64 years (10%), 45 to 54 years (8%), and 65 years and older (4%). The majority of cannabis users consumed the dried flower (76%) and newer gadgets, such as concentrates and vape pens, were less common in the country. Edibles were the second most popular choice of cannabis in the country followed by Hashish. When asked about their source of cannabis, 31% said from a family or friend and 22% answered it is shared among the group.
Meanwhile, Canadian regulatory agency Health Canada has been slow to approve sales and cultivation licenses and delay the launch of infused beverages, vapes, edibles, topicals. This presents a new challenge to the cannabis producers that are dealing with the unexpected effects of the pandemic.
The data on how legal sales of marijuana skyrocketed goes to show that people are turning to weed for anxiety relief amidst the pandemic. But health experts have already warned that it would be a good idea to stay away from cannabis as it raises the risk of Covid-19 complications.