Cannabis is a legalized drug in Canada. It is used both for medicinal and recreational purposes. Canada is the second country in the world after Uruguay to legalize the use of Cannabis. 17th October 2018 is the date when the federal Cannabis Act was put into place. As from the specified date, one was allowed to cultivate, possess, acquire, and consume cannabis. Regardless of Cannabis being legalized in Canada, regulations to govern it were put into place. For instance, home production of Cannabis was banned, aimless distribution was prohibited, there are specific times to sell cannabis, and also you were not allowed to consume cannabis anywhere.
Everyone expected 2021 to be a year of success and prosperity. However, in the Canadian cannabis market, things did not go as expected because the average sale in Cannabis Sativa fell by over 5% at the start of January. Based on reports from Statistics Canada, this is a drastic fall compared to other months in the previous years. Averagely, per day, the sales fell by almost 2.5%.
In December the previous year, the revenue collected by Canada in selling Cannabis was $298.4 million while in January of 2021, they got $282.8 million. When you compare the two months, the sales in January is a 5% decline compared to December. Each province in Canada recorded declines, this is according to statistics done by StatsCan. Research shows that the possible cause for this decline could have resulted from the decrease in expenditure because of overspending during the festive season. Also, the COVID-19 pandemic negatively impacted all Cannabis markets in Canada. This is because these markets were forced to work under tight pressure and strict corona-virus rules.
Hifyre and Headset are other statistic companies that deal with the analysis of Cannabis-related data. For instance, the recent data from Hifyre shows that sales in February may also go down. However, this is likely to end soon and things will get back to their norm, this is as per Cantor Fitzgerald. The sales in Canada will rise and this will be spearheaded by a broad vaccination and support from the government to ensure that the health condition returns to its normalcy.
Besides COVID-19 and seasonality, lack of high-quality cannabis products and failure to have the right inventory requirements will also be a challenge to several cannabis producers. If these are not taken good care of, the sales are likely to decline drastically. The conditions of legalizing the drug for medicinal purposes are clearly stated in the Marihuana for Medicinal Purposes Regulations.
