The cannabis market has shown rapid growth in revenues in recent times especially from cannabis edibles and dried flower. According to research with the legalization of recreation use marijuana in Canada last October the illicit sales are likely to decline as more retail outlets make it possible to purchase cannabis and cannabis products as affordable prices.
Cannabis market to double to 8.3 million
Research by Ernst & Young has shown that in the next six years the cannabis market in Canada is likely to double to around $8.2 billion. The flower market share is expected to reduce by halve as consumptions changes to non-combustible methods. The consulting firm indicated that by 2025 the dried flower sales, which currently contributes to up to 84% of cannabis sales, will reduce to around 46%.
These estimates are for the illicit and legal markets excluding the ancillary sales. There will be a decline in illegal sale of marijuana more so if the price and quality of legal cannabis product is proportionate with what is available in the illegal market and if access is enhanced.
Following the enactment of law legalizing cannabis in Canada it is expected that non-edibles nan edible derivatives as well as extracts will contribute to a larger share of the market. extracts are expected to grow by up to 37% from the current 10% while edibles are expected to jump to 12% from 5% by 2025.
Canadian cannabis companies gearing up for growth
A number of big companies in Canada have already made the move and are capitalizing on the booming cannabis market. some of the companies include Aurora Cannabis Inc. (NYSE:ACB), Green Thumb Industries Inc. (OTCMKTS:GTBIF), and Choom Holdings Inc. (OTCMKTS:CHOOF). For instance a company like Aurora Cannabis has been warming up to the legalization and recently they launched a research program examining the use of hemp-derived CBD as a treatment for inflammation, pain, and wound healing.
Choom Holdings has also seen a flurry of activity after it secured one of the biggest retail networks in the country. They have also done some restructuring of their leadership with the appointment of Corey Gillon as its president as a way of strengthening their management as they warm up to the growing cannabis retail market in Canada.
Implementation of retail and distribution networks should be accelerated
Although it is legal now to grow and process cannabis for recreational use in Canada there are other product formats that are expected to spur growth in the sector. Currently the momentum of implementation of distribution and retail frameworks in the country is a bit slow than expected since the enactment of law legalizing marijuana. As a result a lot of consumers are turning to the illegal market for marijuana.
The Canadian cannabis market is on the path to maturity and with an increase to legal access to cannabis products it is expected that the market will grow by close to 50% in the next six years. Equally the average spending per year for each consumer for cannabis products bot medical and recreations is expected to increase to C$1,600 this year from C$1,200.