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420 with CNW — Official Records Show Recreational Marijuana Sales in Canada Exceeded C$5B in 2023

In 2023, Canada’s recreational marijuana market boasted a value of approximately C%5.07 billion ($3.8 billion), a recent government report on retail sales stated. This reflects a 12.2% increase from the previous year, showcasing a trend of growth, albeit at a slower pace compared to earlier years, marking more than five years since the legalization of recreational marijuana in 2018.

Brad Poulos, an entrepreneurship professor at Toronto Metropolitan University, explains this slowdown as a normal evolution of the market. He points out that a big part of the increase in sales of legal marijuana comes from customers moving away from illegal sources. This trend is expected to continue in 2024, with 40% of cannabis transactions still taking place in the illegal market.

One aspect where the illicit market maintains an edge, according to Poulos, is in marijuana edible potency, a product capped by Canadian regulations at 10 mg of THC per package for public health purposes.

Headset Data analyst Mitchell Laferla draws attention to how customer preferences changed last year in Canada’s marijuana market, with pre-rolled joints showing a remarkable rise in sales, accounting for 31.4% of sales, which is a significant increase over the previous year. This surge brings pre-rolls nearly on par with flower products (35.2%), traditionally the most popular category.

Moreover, Laferla’s analysis notes that, in 2023, marijuana prices in Canada decreased generally for the majority of product categories. But compared to the double-digit compression seen the year before, this decrease was less severe, with pre-roll pricing notably remaining stable, probably helped by continued demand in the category.

The recent retail sales data from Statistics Canada for December revealed a year-over-year increase of 3.6% in legal recreational marijuana sales, amounting to C$441.2 million. This represents an 8.2% month-on-month increase over November 2023, reversing the downward trend that had been seen since August, when monthly sales reached a height of C$467 million.

Despite these positive indicators, challenges persist within the regulated market. High taxes remain a significant grievance among industry stakeholders, compounded by the enduring presence of the illicit market. In addition, the industry is looking forward to the parliamentary study of legalization that is scheduled for release in the spring, though it is unclear if the outcome will allay the worries of cannabis retailers and producers.

The marijuana retail industry in Canada is still recouping after several locations were either closed or acquired last year.

Looking ahead, Poulos estimates a potential 10% growth in Canadian marijuana sales for 2024 over the previous year, fueled by continued migration of users from the illicit market and further expansion of legal dispensaries, particularly in regions with limited accessibility such as Quebec and certain municipalities in Ontario.

Individual companies, such as Aurora Cannabis Inc. (NASDAQ: ACB) (TSX: ACB), are likely to fare differently in the new year depending on how well they position themselves to appeal to different consumer segments, including medical marijuana users.

About CNW420

CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of an article each business day at 4:20 p.m. Eastern – a tribute to the time synonymous with cannabis culture. The concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.

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