Legal Market Sales Surpass Illicit Sales in Ontario
Legal marijuana sales in Ontario eclipsed the total sales from unlicensed sources for the first time from July through September 2021. The Ontario Cannabis Store reported the second-quarter sales of legal cannabis accounted for more than 54 percent of marijuana sales. The remaining 46 percent came from illicit sources, such as unlicensed dispensaries.
Legal dispensaries in Ontario sold about $394 million in cannabis products during the second quarter. That nearly doubles the more than $204 million in legal marijuana sales during the same quarter in 2020. Ontario buyers purchased a record 56 million grams of cannabis during the quarter.
Ontario is the most populous Canadian province and greatly reflects national trends in cannabis sales and use. Ontario has about 6.61 million residents. That is about 2 million more than Quebec’s 4.67 million residents and well ahead of the 2.26 million in British Columbia and other lesser populated provinces in Canada.
Odds are that trend will continue as licensed dispensaries grow in number along with available legal supplies from licensed marijuana growers in Canada.
More Legal Dispensaries Enable Market Growth
The growth in legal sales is putting a pinch on unlicensed dispensaries and other sources of illicit sales. Canada made licensed marijuana sales legal in 2018, but a dearth of licensed dispensaries greatly affected legal sales. Only 5.4 percent of marijuana sales were done through licensed dispensaries in 2018.
That percentage nearly quadrupled to 19 percent by the time 2019 concluded. And it more than doubled with about 44 percent of all marijuana sales in 2020. Weedmaps Canada dispensary locations show where a growing number of licensed dispensaries are located throughout the nation.
Licensed dispensaries are different than unlicensed ones that provide customers with unregulated marijuana. The so-called illicit market often operates out of unlicensed and unregulated locations, and the products sold also are unregulated. Buying unregulated marijuana was more affordable than going through licensed dispensaries. But that is changing.
Lower Prices and Stronger Enforcement Boost Legal Sales
Provinces like Ontario are stepping up efforts to shut down unlicensed dispensaries. Raids on illicit marijuana dispensaries are on the rise in Ontario and other provinces. But many still operate in the open and continue to account for a si9gnificant portion of national marijuana sales in Canada.
Many Canadian provinces also are adjusting regulatory efforts to enable licensed growers to sell quality products for prices that are lower than the illicit market generally charges. Those efforts include assessing the quality of licensed marijuana versus what is sold on the illicit market.
The New Brunswick Research and Productivity recently analyzed illicit and legal cannabis and published the results. The New Brunswick cannabis study shows that illicit marijuana is not as potent as claimed and generally is inferior to cannabis products sold by licensed dispensaries.
The study affirms unregulated marijuana is not as good as what is available through licensed dispensaries. The study also shows that the potency and quality generally are less than advertised in illicit dispensaries. The combination of provinces enabling lower prices at licensed dispensaries while stepping up efforts to shut down illicit sellers is helping to make legal cannabis king in the Great White North.
Legal Limits on Licensed Cannabis Purchases
There are many licensed dispensaries in Canada and more opening all the time. But they cannot sell unlimited products or quantities. The products they do sell legally mostly cover the gamut of what most buyers want.
The Canadian cannabis market allows the legal sale of:
- Dried cannabis.
- Edible cannabis.
- Cannabis extracts and topicals.
- Cannabis plants and seeds.
Dried cannabis accounts for nearly two-thirds of the legal market in Canada. The legal market includes recreational and medical sales of marijuana.
In March 2021, Canadian dispensaries sold nearly 11.6 million packages units of legal cannabis. Dried cannabis accounted for nearly 7.38 million packaged units.
The edibles market accounts for about 20 percent of licensed sales at dispensaries with more than 2.26 million packaged units sold. Extracts are nearly as popular as edibles in Canada. Buyers bought 1.92 million packaged units, which amounted to 17 percent of cannabis sales across Canada.
Legal Limits for Cannabis Buyers
Canada’s Cannabis Act enables adults to possess up to 30 grams of dried cannabis. Canadian regulators say that 1 gram of dried cannabis is equal to about 5 grams of fresh cannabis, which enables the legal possession of up to 150 grams of fresh cannabis.
Regulators also say that a gram of dried cannabis is equal to 15 grams of edibles, 70 grams of liquid products, or a quarter gram of concentrate in liquid or solid form. Canada also allows possession of a single cannabis plant seed.
Although cannabis is legal, its illegal sale could lead to lengthy prison sentences for offenders caught selling cannabis to anyone who is under age 18.