NORML – Analysis: Legalization Has Largely Displaced Canada’s Illicit Cannabis Market | Cannabis Law Report | Where to buy Skittles Moonrock online
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If this is indeed true it has happened a lot quicker than most would have expected
Most Canadian cannabis consumers have transitioned to the legal marketplace in the years following nationwide legalization, according to new data published online in the International Journal of Drug Policy.
Researchers affiliated with The RAND Drug Policy Research Center in California and the University of Waterloo School for Public Health in Ontario assessed marijuana-related purchases over 12 months in a cohort of 5,656 participants.
Consistent with prior studies, investigators reported, “Canada’s legal cannabis market has displaced approximately three-quarters of domestic expenditures on the illegal cannabis market four years after federal legalization of non-medical cannabis.”
Specifically, researchers acknowledged that lower retail prices and increased access to legal retailers has driven consumers’ transition from the unregulated market to the legal adult-use marketplace.
“The findings provide evidence of substantial transition from the illegal to the legal market in the five years since the legalization of non-medical cannabis in Canada,” the study’s authors concluded. “Since the opening of legal retail stores in Canada in October 2018, legal retail sales have increased in a linear fashion, with no indication of a ‘plateau’ up to five years after legalization.”
Data compiled in the United States also reports that a growing percentage of consumers are transitioning to the legal marketplace. According to a 2023 survey, 52 percent of consumers residing in legal states said that they primarily sourced their cannabis products from brick-and-mortal establishments. By contrast, only six percent of respondents said that they primarily purchased cannabis from a “dealer.” Many consumers residing in non-legal states also reported that they frequently traveled to neighboring legal states to purchase cannabis products and return home with them.
A separate US economic study similarly reports that consumers are most likely to transition to the legal marketplace in jurisdictions where state-licensed retailers are widely available. According to the study’s findings, “States with roughly 20 to 40 legal regulated stores per 100,000 residents, in general, have captured 80 percent to 90 percent of all cannabis sales in the legal market.”
Commenting on the studies’ findings, NORML’s Deputy Director Paul Armentano said: “These data indicate that legal, regulated cannabis markets are displacing the underground marketplace. Over time, consumers are becoming more comfortable with and more reliant upon licensed retailers – which typically offer greater convenience, product quality, and safety.”
The full text of the study, “Transitions to legal cannabis markets: Legal market capture of cannabis expenditures in Canada following federal cannabis legalization,” appears in the International Journal of Drug Policy.
Highlights
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Legal market capture of cannabis 5 years post-legalization in Canada is ∼78 %.
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Dried flower accounted for approximately 60 % of all legal cannabis expenditures.
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Higher legal market capture for drinks, vapes, and capsules; lower for concentrates.
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Overall, evidence of substantial transition in expenditures from illegal to legal cannabis market.
Abstract
Background
Canada legalized ‘recreational’ or ‘non-medical’ cannabis in 2018 with a primary objective of displacing illicit cannabis and transitioning consumers to a ‘quality controlled’ legal retail market. To date, there is limited research on legal market capture in jurisdictions with non-medical cannabis markets.
Methods
The current analysis used ‘demand-side’ methods to estimate the size of the Canadian cannabis market using data from two sources. First, data from the Canadian Community Health Survey were used to estimate the number of Canadians who use cannabis. Second, data on cannabis expenditures from legal versus illegal sources were analyzed from 5656 past 12-month consumers aged 16–100 who completed national surveys conducted in 2022 as part of the International Cannabis Policy Study.
Results
Total estimated expenditures from legal sources were within two percentage points of the ‘actual’ retail sales data from Government of Canada’s tracking system. In the 12-month period ending in September 2022, total cannabis expenditures in Canada were estimated at $6.72 billion dollars, including $5.23 billion from legal sources and $1.49 billion from illegal sources for an estimated legal market capture of 78 %. In 2022, dried flower accounted for 55 % of total legal expenditures and an additional 2 % was spent on plants and seeds. Concentrates accounted for 12 % of legal expenditures, followed by oral liquids (11 %), vaping liquids (10 %), and edibles (8 %, excluding drinks).
Conclusions
The findings provide evidence of substantial transition in expenditures from the illegal to the legal market in the five years since legalization of non-medical cannabis in Canada.
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