70% of Canadians buy legal weed?
70% of Canadians buy legal weed?

If You Believe Almost 70% of Canadian Cannabis Consumers Only Buy from Legal Sources Then I Have a Bridge to Sell You in Florida

MJ BIZ calls out Statistics Canada for their obvious failure in reporting correct information!

Posted by:
Laurel Leaf on Sunday Jan 21, 2024

canadians buying legal weed

The government's annual Canadian Cannabis Survey indicates that the federally regulated cannabis business in Canada witnessed a considerable rise in acquiring unlawful market share in 2023.

 

Except, that number probably isn't true.  In one of the funnier stories of the week, MJ BIZ covered the new Statistics Canada report that 69% of Canadian cannabis consumers "always" buy from legal sources.  The huge jump in that number isn't because Canadians love paying taxes and higher fees associated with legal cannabis, it is pointed out by MJ BIZ on how that information is being read is probably actually incorrect.

 

For legal cannabis businesses, the percentage of the criminal market that is captured is an important indicator that represents their actual total addressable market (TAM). The TAM represents the income potential that companies working within the industry's legal framework might potentially earn.

 

Unlike in the United States, where marijuana is legal in numerous states but remains federally prohibited, TAM models often incorporate underground cannabis sales. However, this practice is questionable, given that such sales are not accessible to legal businesses.

 

The most recent survey queried Canadians who had consumed cannabis in the past 12 months about their product sources. A significant 69% reported "always" obtaining their marijuana products from legal or licensed sources. This marks a substantial increase from the 48% who reported the same in 2022.

 

In 2020, when the question was first made public, just 37% of participants said they "always" got their cannabis lawfully. Based on replies from almost 11,700 people, the 2023 study provides insight into these changing dynamics in the cannabis market in Canada.

 

Cannabis Survey Interpretations

 

As the estimates regarding illicit market capture stem from a survey, they should be regarded as a general approximation of legal versus illegal sales rather than precise figures.

 

When comparing the legal and illegal markets, MJBizDaily prefers to look at survey metrics that show where consumers regularly buy legal cannabis, whereas Statistics Canada prefers to look at statistics that show where people buy "some" of the cannabis they consumed last year.

 

Even as MJBIZ covered the press release, they had to make it clear on how these stats are probably not correct in the bigger picture!

 

For example, Statistics Canada revealed the previous year that over 68% of cannabis users stated they got "at least some" of their consumption from legal sources in 2020. Compared to the proportion of respondents who said they "always" obtained their cannabis lawfully, this number is noticeably higher.

 

The 2023 survey also revealed that 9% of those who used cannabis in the past year claimed to have "never" obtained their products from legal sources, a decrease from 15% in 2022 and 18% in 2021.

 

In 2020, one-fifth of survey participants indicated "always" obtaining cannabis illegally.

 

The 2023 Canadian Cannabis Survey further noted a decrease in monthly cannabis expenditures among consumers. Those who used cannabis in the past 12 months reported spending approximately 63 Canadian dollars per month ($47) on both legal and illegal products.

 

Of this amount, individuals reported spending roughly CA$54 to acquire cannabis legally in 2023, a decline from CA$65 in 2022. Estimated illegal spending is decreasing at a faster rate. In 2023, respondents reported spending around CA$8 on illegal cannabis per month, a substantial decrease from the approximately CA$47 spent monthly in 2020 when this category first appeared in the annual poll.

 

For the first time in 2023, the survey inquired about consumers obtaining cannabis from a storefront in a First Nations community. MJBizDaily previously reported that First Nations entrepreneurs faced broad exclusion from Canada's cannabis legalization model, with only about 24 recreational marijuana stores located on First Nations reserves last year, among the more than 3,300 provincially authorized stores across the country. According to the survey, 2% of consumers reported obtaining their cannabis from a First Nations storefront.

 

Additional insights from the 2023 survey include:

 

- 4% of past-year medical and recreational consumers reported that cannabis had been grown in or around their home in 2023.

- 10% of medical cannabis consumers reported home-growing cannabis.

- The primary factors influencing where cannabis was obtained were price (42% reported it as their top factor) and convenience (15%).

- Strength or potency was ranked as the top factor by only 9% of cannabis consumers.

 

A Shift in Consumer Behavior

 

The 2023 Canadian Cannabis Survey illuminates a dynamic transformation in the preferences of cannabis consumers, marking a significant departure from previous years. The survey's revelation that 69% of respondents consistently opt for legal or licensed sources underscores a profound shift in consumer behavior. This notable surge in the preference for authorized channels suggests growing confidence in regulated cannabis products and reflects an evolving societal acceptance of the legal cannabis framework in Canada. As consumers increasingly gravitate towards these legitimate sources, it not only reshapes the industry landscape but also signals a maturing market that demands strategic adaptability from businesses seeking to thrive in this altered paradigm.

 

This shifting dynamic is a sign of a larger trend in which customers are choosing products with more knowledge and in line with the safety and quality guarantees associated with legal cannabis. The way the industry reacts to these changing tastes will be crucial in determining how rules, marketing tactics, and the general direction of the Canadian cannabis market will be shaped in the future.

 

Evolving Trends in Consumption and Expenditure

 

The 2023 survey offers valuable insights into the nuanced aspects of cannabis consumption, shedding light on evolving trends in consumer expenditure. A notable revelation is the decline in monthly cannabis spending among consumers who engaged with the plant over the past year. With individuals reporting an average expenditure of approximately 63 Canadian dollars per month ($47) on both legal and illegal products, this signals a noteworthy shift in consumer habits.

 

Delving deeper, the survey unveils a divergent trajectory in legal and illegal spending. Legal cannabis expenditure, reported at around CA$54 in 2023, reflects a decline from CA$65 in 2022. In contrast, estimated illegal spending has witnessed a more pronounced decrease, plummeting to approximately CA$8 per month in 2023 from a peak of CA$47 in 2020. These evolving trends highlight the financial effects of consumer choices on the cannabis industry in addition to reflecting rising confidence in legal channels. Businesses need to manage this changing landscape as customers redefine their buying habits and adjust their strategy to match the market's shifting dynamics and consumer behavior.

 

Bottom Line

 

The 2023 Canadian Cannabis Survey paints a transformative picture of the industry, spotlighting a substantial rise in legal cannabis adoption and offering nuanced insights into evolving consumer habits. The notable shift to 69% of consumers consistently choosing legal sources reflects an industry maturing towards acceptance and regulation. Additionally, the survey uncovers changing expenditure patterns, signaling a significant economic impact on both legal and illegal cannabis markets. As the market adapts to these shifting dynamics, businesses must navigate wisely, aligning strategies with the evolving consumer preferences and economic trends to thrive in the dynamic landscape of Canada's cannabis industry.

 

CANADIANS DON'T BUY LEGAL WEED, READ ON...

CANADIANS DON'T BUY LEGAL CANNABIS PREFER BLACK MARKET

ONLY 20% OF CANADA'S LEGAL CANNABIS IS BOUGHT BY CANADIANS!


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