Canada’s cannabis market continues to report impressive growth and announced a new sales record in July. According to Statistics Canada, the country generated C$338.9 million of sales in July which is 6% higher than June and 45.6% higher when compared to July 2020.
One of the interesting data points is related to the amount of revenue that came from certain product categories. When compared to June, the percentage of sales for edibles and pre-rolls is higher in July. Compared to July, the percentage of sales from dried flower, oils, and vapes were higher in June.
In late October, Statistics Canada will release August sales data and we will monitor how the percentage of revenue from certain product categories changes. Currently, dried cannabis flower accounts for more than 50% of sales and the percentage could drop below this level in August. We are favorable on this trend due to the margins on cannabis 2.0 products being higher than dried cannabis flower.
Although we are bullish on the record sales numbers that were reported in July, the percentage growth on a year-over-year basis was the lowest annual growth to date (down from 58.5% year-over-year growth in June).
The amount of sales that was reported in July came in below what leading data analytics provider, Hifyre IQ had forecasted. The data firm previously announced that it expected C$340 million of sales and we will monitor how August sales numbers compare to expectations when released.
One of the reasons for the miss is COVID lockdowns and licensed companies continue to highlight the negative impact on retail sales in earnings reports. Going forward, we will monitor how companies continue to address this risk and believe our readers need to be aware of this trend.
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