A correction was made on December 12, 2019 to reflect that online cannabis distribution in Alberta is conducted under the public retail model and not the private model as originally indicated.

Corrections have been made to this product. Please take note of the following changes:

In the year following the legalization of non-medical cannabis in Canada, the retail non-medical cannabis market has grown considerably, with retailers of legal cannabis establishing more than 400 brick-and-mortar stores and registering $908 million in online and retail store sales (Chart 1).

Data table for Chart 1 ﻿ Data table for Chart 1 Retail trade sales Chart 1 Note 1

Table summary

This table displays the results of Chart 1 Retail trade salesby cannabis stores 2018, 2019, O, N, D, J, F, M, A and S, calculated using millions of dollars units of measure (appearing as column headers). 2018 2019 O N D J F M A M J J A S millions of dollars Rest of Canada 12,431,891 19,411,306 19,900,134 18,132,182 16,322,820 19,590,280 19,362,630 21,357,472 22,238,528 25,928,348 35,516,427 32,070,884 Quebec 9,415,586 11,859,076 11,992,781 11,217,753 11,389,083 14,107,288 13,598,216 17,129,629 18,764,537 24,195,624 24,981,593 26,211,588 Ontario 11,453,939 8,919,722 8,720,707 8,947,005 7,539,152 7,691,964 19,687,110 22,820,558 25,855,485 29,613,021 33,771,918 31,786,026 Saskatchewan 579,752 926,321 969,660 960,330 2,700,247 3,477,914 4,371,738 3,606,460 4,531,186 4,989,680 5,442,745 5,609,290 Alberta 5,700,750 11,205,413 14,225,138 14,037,065 12,341,781 14,482,623 15,876,414 17,470,051 18,422,591 21,340,218 24,861,633 25,775,892 Total 39,581,918 52,321,838 55,808,420 53,294,335 50,293,083 59,350,069 72,896,108 82,384,170 89,812,327 106,066,891 124,574,316 121,453,680

Since October 2018, the provinces and territories have instituted a variety of regulatory frameworks to manage the distribution and sale of non-medical cannabis Note in their jurisdictions, resulting in an industry structure composed of public, private, and hybrid systems engaging in retail trade through both brick-and-mortar and online stores.

As the industry establishes itself and the market develops, Canadians’ access to cannabis retailers is increasing. This paper describes recent trends in the retail cannabis sector,Note provides an update to Statistics Canada’s October 2018 proximity study,Note and highlights the role that accessibility, online sales and wholesaler retail sales have played in the evolution of the cannabis market to date.

Overview of provincial and territorial sales

Ontario cannabis retailers led sales at the provincial level, contributing $217 million to the sector from October 2018 to September 2019, followed by Alberta ($196 million) and Quebec ($195 million) (Table 1).

Table 1

Total retail sales Table 1 Note 1

Table summary

This table displays the results of Total retail sales at cannabis stores Total retail sales at cannabis stores, July 1st Q3 2019 population estimate and Sales per capita, calculated using unadjusted dollars (thousands), persons and dollars units of measure (appearing as column headers). Total retail sales at cannabis stores July 1st Q3 2019 population estimate Sales per capita unadjusted dollars (thousands) persons dollars Canada Table 1 Note 2 907,833 37,589,262 24 Newfoundland and Labrador 30,615 521,542 59 Prince Edward Island 15,216 156,947 97 Nova Scotia 65,805 971,395 68 New Brunswick 37,905 776,827 49 Quebec 194,865 8,484,965 23 Ontario 216,807 14,566,547 15 Manitoba 56,103 1,369,465 41 Saskatchewan 38,165 1,174,462 32 Alberta 195,740 4,371,316 45 British Columbia 49,659 5,071,336 10 Yukon 4,216 40,854 103 Northwest Territories 2,737 44,826 61 Nunavut Note ... : not applicable 38,780 Note ... : not applicable

In contrast, British Columbia, one of the four most populous provinces, reported relatively low total sales at cannabis stores ($50 million) and the lowest sales per capita values in the country at $10 during the same period. Conversely the Yukon, one of the least populated regions in the country, reported the highest per capita sales at $103, with Prince Edward Island and Nova Scotia observing the next highest values at $97 and $68 average sales per person respectively.

Differences between regions in total and per capita cannabis store sales may be explained in part by Canadian’s access to cannabis stores. A variety of factors may influence access to cannabis in a given region including the administrative and operational steps required to establish a cannabis retail store (which may affect the pace at which new outlets are able to open for business), the immediate or staggered entry of retail operations over the course of the year, competition from illegal markets, the density and distribution of the population and of stores in a given region, demographic and income factors, disruptions in the supply chain, and differences in the regulatory approaches pursued by regional governments. Examples of regulatory influences include increasing the federally mandated minimum age; lowering possession limits; a jurisdiction’s decision to support a public, private, or hybridNote retail model; limitations on the number of private stores to be established; restrictions on store locations and proximity to schools and restrictions on hours of operation (Myran, Brown & Tanuseputro, 2019).

Cannabis regulation across Canada

With the enactment of the Cannabis Act, provinces and territories are responsible for determining how non-medical cannabis is distributed and sold in their jurisdictions. Each jurisdiction has chosen to operate either a government-run retail model, a privately run model, or a hybrid of the two. Table 2 describes the model choice of each regional government, and the physical or online retail distribution modes they employ.

Table 2

Cannabis retail models and distribution modes in the provinces and territories

Table summary

This table displays the results of Cannabis retail models and distribution modes in the provinces and territories. Retail model, Physical retail and Online retail (appearing as column headers). Retail model Physical retail Online retail Newfoundland and Labrador Public Note ... : not applicable √ Private √ Note ... : not applicable Prince Edward Island Public √ √ Private Note ... : not applicable Note ... : not applicable Nova Scotia Public √ √ Private Note ... : not applicable Note ... : not applicable New Brunswick Public √ √ Private Note ... : not applicable Note ... : not applicable Quebec Public √ √ Private Note ... : not applicable Note ... : not applicable Ontario Public Note ... : not applicable √ Private √ Note ... : not applicable Manitoba Public Note ... : not applicable Note ... : not applicable Private √ √ Saskatchewan Public Note ... : not applicable Note ... : not applicable Private √ √ Alberta Public Note ... : not applicable √ Private √ Note ... : not applicable British Columbia Public √ √ Private √ Note ... : not applicable Yukon Public √ √ Private √ Note ... : not applicable Northwest Territories Public √ √ Private Note ... : not applicable Note ... : not applicable Nunavut Public Note ... : not applicable Note ... : not applicable Private Note ... : not applicable Note ... : not applicable

Cannabis is available through online retail in every province and territory, with only Manitoba and Saskatchewan allowing online sales via the private retail model. The majority of private and hybrid retail models are in Western Canada. Nunavut is the only jurisdiction without a physical retail store.

A growing number of cannabis stores

The seven regions operating under private and hybrid retail models are home to 72% of the Canadian population and 85% of retail cannabis stores (Table 3). Since the legalization of non-medical cannabis, these private and hybrid model stores account for 65% of sales to date (as of September 2019). The total number of cannabis retail stores in Canada rose from 217 in March 2019 to 407 in July 2019, an increase of 88%.Note Alberta held top rank in store count since legalization and opened the most stores (101) between March and July 2019 for a total of 176 cannabis stores province-wide. Starting with just 16 stores in March, the number of cannabis outlets in British Columbia increased to 57 in July, the second highest number of cannabis outlets in the country.

Prior to legalization Ontario shifted from its planned public retail model to a hybrid model, permitting a first wave of private brick-and-mortar stores to open in April 2019. Despite the lag in the introduction of private retail stores, and despite having fewer stores (Ontario ranked 5th in the country with 24 stores in July 2019), the province has since surpassed Alberta in total retail sales from cannabis stores.Note Notably, within the March-July 2019 time frame, there was little change in counts of publicly operated stores across the regions with the exception of Quebec, which added four more stores.

The proximity of Canadian households to retail cannabis stores

One way to examine Canadians’ increasing access to cannabis products is to estimate the distance from households to retail cannabis stores. In this study, a measure of proximity was calculated by determining the location of each Canadian household in Statistics Canada’s geographic databases, and calculating the distance from its location to the nearest legal retail cannabis outlet.Note Population-weighted averagesNote of these distances were then derived to determine how generally accessible retail cannabis products are to Canadians. It should be noted this measure does not account for online distribution or illegal retail stores (online sales are discussed later in this paper).

Table 3

Population-weighted distance to cannabis retail stores, March, May and July 2019, Canada, provinces and territories

Table summary

This table displays the results of Population-weighted distance to cannabis retail stores Population, Store count, Population weighted average distance, 2019, March, May and July, calculated using people, number and kilometres units of measure (appearing as column headers). Population Table 3 Note 1 Store count Table 3 Note 2 Population weighted average distance 2019 2019 March May July March May July people number kilometres Canada 36,540,268 217 285 407 66 39 34 Newfoundland and Labrador 528,567 26 26 26 34 34 34 Prince Edward Island 150,566 4 4 4 12 12 12 Nova Scotia 950,680 13 13 13 20 20 20 New Brunswick 766,852 21 21 21 15 15 15 Quebec 8,297,717 14 16 18 47 37 35 Ontario 14,071,445 Note ... : not applicable 20 24 Note ... : not applicable 44 43 Manitoba 1,335,396 21 23 23 28 28 28 Saskatchewan 1,150,782 19 26 35 50 47 37 Alberta 4,243,995 75 101 176 25 22 13 British Columbia 4,922,152 16 27 57 57 46 24 Yukon 39,628 2 2 4 104 104 103 Northwest Territories 44,936 6 6 6 100 100 100 Nunavut Table 3 Note 3 37,552 Note ... : not applicable Note ... : not applicable Note ... : not applicable Note ... : not applicable Note ... : not applicable Note ... : not applicable

The population-weighted average distance between Canadians and the nearest cannabis store was 34 km in July 2019, nearly half the distance observed in March (66 km). Residents of Prince Edward Island travelled the shortest average distance to access cannabis stores in all three time periods observed (12 km). In Alberta, which ranked second in accessibility, the measure of proximity changed from 25 km in March, to 13 km in July 2019 after the roll out of over 100 new stores. The most significant improvement in average distance to the nearest cannabis store was observed in British Columbia, where a decrease from 57 km to 24 km was observed after an additional 41 cannabis retail stores opened over that same period.

Table 4 shows the cumulative proportion of the population in each province and territory residing within a given distance of a cannabis retail store. As of July 2019, 45% of Canadians live within 10 km of a cannabis store, while 30% live within 5 km, and 19% live within 3 km.

Table 4

Cumulative percentage of Canadians living within a given distance to a cannabis store, March 2019, July 2019, Canada, provinces and territories

Table summary

This table displays the results of Cumulative percentage of Canadians living within a given distance to a cannabis store Given distance to a cannabis store, 3 km , 5 km and 10 km , calculated using percent units of measure (appearing as column headers). Given distance to a cannabis store 3 km 5 km 10 km percent Canada March 2019 12 20 31 July 2019 19 30 45 Newfoundland and Labrador March 2019 37 46 55 July 2019 37 46 55 Prince Edward Island March 2019 26 34 49 July 2019 26 34 49 Nova Scotia March 2019 26 38 48 July 2019 26 38 48 New Brunswick March 2019 23 36 51 July 2019 23 36 51 Quebec March 2019 12 24 43 July 2019 13 27 48 Ontario March 2019 Note ... : not applicable Note ... : not applicable Note ... : not applicable July 2019 9 18 33 Manitoba March 2019 29 44 54 July 2019 29 44 54 Saskatchewan March 2019 26 38 44 July 2019 32 41 48 Alberta March 2019 35 48 61 July 2019 50 63 70 British Columbia March 2019 10 17 28 July 2019 23 32 46 Yukon March 2019 7 22 31 July 2019 18 29 31 Northwest Territories March 2019 32 46 52 July 2019 44 58 62 Nunavut March 2019 Note ... : not applicable Note ... : not applicable Note ... : not applicable July 2019 Note ... : not applicable Note ... : not applicable Note ... : not applicable

In Alberta 70% of the population lived within 10 km of a cannabis retail outlet in July 2019, up from 61% in March. The proportion of households within 3 km of a retail cannabis outlet increased from 35% in March to 50% in July after the opening of an additional 101 stores. Meanwhile, in neighboring British Columbia nearly a third of residents (28%) lived less than 10 km from a cannabis store as of March, with this figure increasing to nearly half (46%) the population by July 2019 after the store count grew from 16 to 57.

Only 33% of Ontarians lived within 10 km of a cannabis store in July 2019 due to the later roll-out of the province’s private retail outlets. Retail sales from cannabis stores in Canada’s most populous province accelerated significantly in April 2019 with the introduction of the first physical outlets. While Ontario ranks relatively low in the July proximity and accessibility measures compared to other provinces, these figures are expected to change given recent developments in provincial license allocations.

Online and wholesaler retail sales

Online sales of cannabis are an important vector of consumer access. Every province and territory, regardless of the existence of physical stores, provides access to non-medical cannabis through online stores. Most online sales are operated under the public retail model, the exception being Manitoba and Saskatchewan. Online sales were relatively stable over the observation period, however the share of online sales from cannabis stores steadily declined from 43.4% in October 2018 to 5.9% of sales in September 2019 due to the increase in the number of physical cannabis stores and their sales (Table 5). Online sales represented 13.3% of total sales from cannabis stores since legalization.

Table 5

Online cannabis sales Table 5 Note 1

Table summary

This table displays the results of Online cannabis sales as a proportion of retail sales Online retail sales of non-medical cannabis, Total retail sales of non-medical cannabis and Proportion of total retail sales, calculated using unadjusted dollars (thousands) and percent units of measure (appearing as column headers). Online retail sales of non-medical cannabis Total retail sales of non-medical cannabis Proportion of total retail sales unadjusted dollars (thousands) percent Total 120,586 907,833 13.3 September 2019 7,120 121,453 5.9 August 2019 9,262 124,576 7.4 July 2019 7,808 106,065 7.4 June 2019 7,783 89,811 8.7 May 2019 8,657 82,384 10.5 April 2019 9,740 72,895 13.4 March 2019 11,123 59,350 18.7 February 2019 9,891 50,292 19.7 January 2019 11,061 53,294 20.8 December 2018 9,283 55,808 16.6 November 2018 11,692 52,322 22.3 October 2018 17,166 39,583 43.4

In some retail models, wholesale distributors also sell to retail consumers and are therefore included in the assessment of the cannabis retail market.Note

Direct-to-consumer trade by wholesalers, including retail sales by publicly operated cannabis stores classified as wholesalers, accounted for a total 1.9% of cannabis-related retail activity since October 2018, reaching a high of 4.4% in November 2018 and averaging less than 1% in September 2019 (Table 6).

Table 6

Direct-to-consumer retail sales Table 6 Note 1

Table summary

This table displays the results of Direct-to-consumer retail sales of cannabis by wholesalers Retailers’ sales of non-medical cannabis, Wholesalers’ retail sales of non-medical cannabis, Total retail activity and Wholesalers proportion of total retail activity, calculated using unadjusted dollars (thousands) and percent units of measure (appearing as column headers). Retailers’ sales of non-medical cannabis Wholesalers’ retail sales of non-medical cannabis Total retail activity Wholesalers proportion of total retail activity unadjusted dollars (thousands) percent Total 907,833 17,541 925,374 1.9 September 2019 121,453 904 122,357 0.7 August 2019 124,576 931 125,507 0.7 July 2019 106,065 1,095 107,160 1.0 June 2019 89,811 1,232 91,043 1.4 May 2019 82,384 1,377 83,761 1.6 April 2019 72,895 1,380 74,275 1.9 March 2019 59,350 1,391 60,741 2.3 February 2019 50,292 1,419 51,711 2.7 January 2019 53,294 1,796 55,090 3.3 December 2018 55,808 2,005 57,813 3.5 November 2018 52,322 2,409 54,731 4.4 October 2018 39,583 1,602 41,185 3.9

Conclusion

Since the legalization of cannabis, online and retail store sales have reached $908 million. With more than 400 retail stores in the country, 45% of Canadians live within 10 km of a cannabis store. While online cannabis retail ensures access to all Canadians regardless of proximity to a physical store, accessibility continues to improve as more stores open across the country. Among the provinces and territories, a diverse array of retail models and regulatory frameworks have influenced the structure and pace of the emerging cannabis market. The cannabis retail market will continue to evolve as jurisdictions adapt their regulatory approaches, as supply chains develop and as cannabis product offerings diversify. Measures such as retail sales values and proximity estimates will continue to be important sources of market insight. Over time, as more data are collected, Statistics Canada will continue to serve the interest of Canadians by observing market trends and developing new indicators that help assess the growing cannabis industry.

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