The accounting firm Deloitte just released its 2018 report on the Canadian cannabis industry, and there are some very interesting bits of info in there for everyone, whether you’re a dedicated cannabis consumer, potential investor, or just curious about how the landmark Cannabis Act will impact Canadian society.
From its estimate that cannabis will be a $7+ billion industry, to who will be using cannabis, how much consumers are willing to pay, and the impact cannabis could have on the liquor industry, let’s have a look at what Deloitte learned from surveying recreational cannabis users across the country.
Cannabis will be $7 billion industry in 2019
Up to $7.17 billion, in fact, but that number combines all the different cannabis markets- recreational, medical, and illegal- and legal sales are estimated to be around $4.34 billion.
Cannabis users are also anticipating higher prices for legal cannabis, although they have indicated they’re only willing to spend up to 10% more, which aligns with the government’s proposed 10% excise tax (or $1 per gram, whichever is more).Current cannabis consumers indicate that they will buy up to 2/3 of their cannabis from legal sources, and edibles may make up for that missing 1/3 since they will not be legal until 2019 at the earliest.
Deloitte expects 60% of likely cannabis consumers to try edibles at some point.
Also, it should be noted that some consumers may choose to boycott legal cannabis because many provinces are forcing all retailers to carry cannabis from licensed producers only, whose inconsistent quality and monopolistic tendencies have left a bad taste with many Canadians.
What will the average cannabis consumer look like?
Right now, the average cannabis consumer is between 18-34 years old, but legalization is expected to attract an older, more conservative crowd that ranges in age from 35-54 who will become more open to experimenting with cannabis.
With legalization, current consumers are expected to increase their cannabis purchases by up to 68% more! But keep in mind that frequency and consumption levels are not expected to increase dramatically. The biggest increase is in the likely cannabis consumers who will have the occasional toke less than once a month.Consumers also expect their data to be secure and protected, especially when buying online and in-person at government-run stores.
Alcohol sales going down?
In many cases across the country, provincial liquor boards will be the sole distributors and retailers of legal cannabis, so while alcohol sales of all kinds are expected to be hit by a “negative impact on the revenues for government, liquor companies, and retailers”, it may be balanced out by the increase in cannabis sales as people substitute it for alcohol. At least, for the government. Liquor companies and retailers may not be so lucky or protected.
For the full report, click here.