Output from the Canadian cannabis sector has dropped to $10.8B in July after peaking at $11.6B in November 2022, new research from Statistics Canada indicates as the country marks five years since marijuana legalization.
Marijuana use among Canadians has continued to rise since the country legalized the possession and use of recreational cannabis on October 17, 2018, becoming the second nation to do so after Uruguay.
According to Statistics Canada, by 2022, more than one in four Canadians aged 16 years and older (27%) have reported cannabis use over the past 12 months, up from ~15% in 2017.
However, access to cannabis has stabilized, with 3,332 brick-and-mortar pot shops operating as of Q1 2023 after a nearly two-fold rise by Q2 2022, up from 1,445 about two years ago.
“Legal sales are growing… but there are simply too many players in most segments for the industry overall to be profitable,” CTVNews reported, quoting Brad Poulos, a lecturer at the Toronto Metropolitan University and industry expert.
“We’re in a period of industry consolidation and seeing all of the things you see when that happens such as bankruptcies, restructuring and mergers,” he added.
CEO of Canadian cannabis player Tilray Brands (NASDAQ:TLRY), Irwin Simon, agrees. “I see a lot of consolidation,” Simon said during an interview with Bloomberg TV. “A lot of these companies cannot raise money.”
H/T: seekingalpha.com
