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Legal Cannabis Sales Outpace Unregulated Sales In Canada For The First Time

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Legal adult-use cannabis sales started in Canada in 2018. Canada is only one of two countries where adult-use cannabis sales are legal, with the other one being Uruguay.

However, unlike Uruguay which limits sales to residents, Canada allows legal sales to all adults regardless of residence status. In so many ways Canada is the largest cannabis policy and industry experiment on earth.

Transitioning sales from unregulated sources to legal ones has been a turbulent process in Canada, which is not entirely unexpected. After all, Canada is the first nation to ever embark on such a massive cannabis industry undertaking, so setbacks were expected.

Since the launch of legal adult-use sales, Canada’s government has struggled to combat unregulated purchases, with the unregulated market receiving a larger share of sales compared to the regulated market. However, that changed recently with Canada recording its first quarter in which legal cannabis sales outpaced unregulated sales. Per Bloomberg:

Canadian household spending on legal cannabis in the second quarter of the year outpaced the illicit market for the first time, marking a significant milestone for the licensed pot industry.

Statistics Canada said Friday that Canadian household spending on recreational cannabis reached $648 million in the second quarter of 2020, an increase of 74 per cent from the same period last year. Meanwhile, spending on medical cannabis was flat at $155 million in the second quarter, StatsCan said.

Canadian household spending on illicit cannabis fell to a new low of $784 million in the second quarter, StatsCan added. Taken together, the legal cannabis market now accounts for 50.5 per cent of all pot-related spending in Canada.

This is a significant milestone for not only Canada but also for the rest of the world. All ‘cannabis policy eyes’ from around the world have been locked on Canada to see how things are unfolding.

The situation in Canada is far from perfect, however, the fact that the legal market is now seriously competing with the unregulated market is very significant. It’s a meaningful sign that legalization is working in Canada, and if Canada can do it presumably other nations around the globe can do it too.