Advertisement

Ontario’s legal cannabis industry gaining market share, but COVID-19 lockdowns could impact sales: OCS

Click to play video: 'Cannabis retailers plead with Ontario to allow reopening in lockdown zones'
Cannabis retailers plead with Ontario to allow reopening in lockdown zones
WATCH ABOVE: From the onset of the coronavirus pandemic, the provincial government has maintained that it would keep both cannabis and alcohol retailers open. But cannabis retailers are crying foul, saying the province is imposing limits on how their products are sold. Morganne Campbell has more in this report – Nov 28, 2020

TORONTO — Ontario’s legal cannabis industry is gaining ground in its fight against the illicit market, but the progress likely won’t last long because of COVID-19 lockdowns.

The Ontario Cannabis Store said Thursday that between the start of July and end of September the legal industry controlled slightly more than 36 per cent of the recreational market, up from about 25 per cent the quarter before.

However, the OCS warned the gains may soon dissipate. The pot distributor said the legal industry’s market share will decline in the next quarter because of COVID-19 lockdowns that forced pot retailers in Toronto and Peel to operate solely through pickup and delivery.

“While there is still a great distance to travel in moving consumers from the illegal market to the new channels, we are establishing forward momentum, driven by a number of factors such as access, quality and price,” OCS president and chief executive Thomas Haig wrote in the pot distributor’s quarterly report.

Story continues below advertisement

Canada’s legal cannabis sector has been challenged since its inception in 2018 by the illicit market and gaining market share has been particularly tough during the COVID-19 pandemic.

For news impacting Canada and around the world, sign up for breaking news alerts delivered directly to you when they happen.

Get breaking National news

For news impacting Canada and around the world, sign up for breaking news alerts delivered directly to you when they happen.
By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy.

The health crisis has resulted in delays in cannabis shipments and temporary store closures, making the underground market more attractive for consumers.

The legal industry’s gain of 10 per cent in market share is its largest ever, and came just 17 days shy of the second anniversary of the legalization of recreational cannabis in Canada, Haig said.

The gain is largely due to the fact that 322 cannabis products saw their prices reduced during the latest quarter, the OCS said.

The average price of dried flower on the OCS’s website sank to $6.41 per gram, down from $7.05 a gram in the previous quarter.

Click to play video: 'Edibles, vapes and tea to become available in Ontario pot shops'
Edibles, vapes and tea to become available in Ontario pot shops

Meanwhile, illicit market cannabis reached $8.17 per gram, up from $7.98 earlier in the year.

Story continues below advertisement

The OCS said its sales hit $30.5 million while retail stores raked in $173.9 million.

Altogether about 25.8 million grams of cannabis valued at $204.3 million was sold in Ontario in the quarter.

Dried flower accounted for about 60 per cent of those sales, followed by vapes and pre-rolls at 15 per cent and 12 per cent respectively.

As the quarter ended, the number of cannabis stores hit 183, but by the time of the report’s publication, had climbed even further to 280.

Sponsored content

AdChoices