ARMSTRONG: Why Canada’s legal marijuana market needs more stores to thrive

Michael Armstrong, Associate Professor of Operations Research in Brock’s Goodman School of Business, wrote a piece recently published in the Globe and Mail about the impact more stores would have on Canada’s legal marijuana market.

Armstrong writes:

“Recreational cannabis sales volumes continued their steady growth in June, in contrast with slumping medical sales. Processing and inventory levels, meanwhile, remain problems for licensed producers (LPs). But for legal cannabis over all, the opening of more retail stores increasingly seems to be the driver of growth.

Last week, Health Canada reported that combined medical and recreational sales in June totalled 19,590 kilograms, just 1 per cent higher than the number for May. Assuming Canadian monthly consumption of roughly 77,000 kg, that means legal sales captured just more than one quarter of the national market.

Medical sales fell to 1,535 kg for dry cannabis and 4,986 litres for cannabis oils, but those might be just random fluctuations. Since October, combined monthly medical volumes have seemingly plateaued around 6,730 kg, or about 9 per cent of national consumption. Growth might not resume until topical lotions and vape oils become legal later this year.

By contrast, recreational sales achieved their fourth consecutive monthly increase. Dry sales rose 8 per cent to 8,441 kg, while oils grew 17 per cent to 4,928 litres. Together, they covered perhaps 16 per cent of Canadian consumption.”

Continue reading the full article here.


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