On Oct. 17, 2018, the Canadian government legalized the recreational use of marijuana. Given the legislation’s upcoming sixth anniversary, one researcher believes the time has come to assess how the process has impacted the medical marijuana market.
Associate professor Michael Armstrong, who specializes in operations research, conducted a new study demonstrating that while recreational legalization did see fewer patients remain in the medical market, the medical program is still running. Armstrong reveals that following recreational legalization, many individuals left the medical marijuana system, some of whom shouldn’t have been there in the first place. Data from the study reveals that patients who remained in the program increased the sizes of their purchases and stabilized their purchasing rates, which suggests that there is a need for a medical marijuana system.
The study analyzed data collected between 2017 and 2022, with a focus on how many patients registered to use medical marijuana, how much they purchased per order and how often their purchases were made. Armstrong also examined behavioral patterns that coincided with the Cannabis Act’s passage in June 2018, recreational sales launch in October of the same year, and the arrival of edibles and other products in stores in December of the following year.
The study found that while patient registration had been rising before recreational marijuana was legalized, the number of Canadians who sought medical marijuana licenses started changing after July 2018. Armstrong observed that following the act’s passage, Alberta recorded the highest reduction in registrations in the entire country. By contrast, rates of registration in Ontario slowed down during that period then gradually declined.
The study also demonstrated that there was minimal change to purchase sizes or registrations after marijuana stores first opened and sales began in October 2018. However, the frequency of medical marijuana purchases did decrease. Armstrong attributed the decline to retail stores offering the same products as medical stores, which offered consumers additional access to the products.
When marijuana offerings expanded to include products such as vapes, beverages and edibles, a huge change in patient behavior was observed, with registration rates dropping during this period. In the same period, product purchases in every order rose and purchase frequencies stabilized.
Armstrong doesn’t expect any major fluctuations in these trends in the future — unless the government makes changes to the accessibility of medical marijuana or the current pricing structure. He argues that the removal of sales tax or excise tax on medical marijuana would make it more attractive and cheaper to consumers than recreational marijuana.
The study’s findings were reported in the “American Journal of Public Health.”
It would be interesting to examine how different Canadian cannabis companies, such as Aurora Cannabis Inc. (NASDAQ: ACB) (TSX: ACB), are tailoring their operations and products to suit the recreational and medical cannabis market segments around the country.
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