Canada’s Boom in Cannabis Export
Canada’s cannabis overseas exports have almost doubled year-over-year, according to recent reports. Industry insiders believe that profits from international trade will continue to grow in the coming years. At the same time, medicinal cannabis sales at home have dropped by roughly 20 percent.
Five years into recreational cannabis legalization, legal pot shops are a common sight in the bigger Canadian cities. As an example, Toronto, the country’s biggest metropolis, has over 400 licensed cannabis retail locations. Whether they’re all profitable that’s another subject of discussion. Across all provinces, Ontario in particular, businesses have struggled with oversaturation and high competition. Farmers have as well have faced problems, producing more than what can be sold on dispensary shelves. Every year, the legal sector is left with no other choice but to destroy alarming quantities of weed.
The World Leader in Regulated Medical Cannabis?
If there’s one thing that seems to be going particularly well as of lately, it’s the surge in medical cannabis sales overseas. Between 2022 and 2023, Canadian cannabis exports climbed for almost half, generating CA$160 million in profits (US$118 million). This represents a 50% increase from CA$107 million in 2021-22, according to data from Health Canada shared with MjBizDaily.
Industry experts believe that the profits from overseas cannabis trade will only continue to rise in the coming years, placing Canada in a very good position over other countries who do export.
In the meantime, domestic sales of medical cannabis have seen a downward trend. Between April, 2020 and April, 2021, Canadian retailers profited more than CA$500 million. Two years later, sales have dropped 20 percent for the same period, generating around $400 million. Though, Canada’s domestic medical market has other strengths; such as, the government spends over 150 million every year to reimburse medical cannabis costs for veterans.
Combining Canadian exports and domestic sales, the country’s medical marijuana industry has turned in a total of CA$570 million last year (without counting government’s expenditures). The figure makes Canada the world’s largest regulated medical cannabis market at the moment.
What Else is Happening on the Canadian Market?
Canada’s recent boost in international sales is accompanied by other intriguing trends that may or may not have direct correlation, however. For example, the country has seen an increase in high-quality craft flower production by micro-cultivators. The number of micro-class licenses has surpassed 400 in 2023, while the number of standard licenses have begun to move down. This might help correct the oversaturation issue in the end.
Overall, Canada’s legal cannabis sector has not been at much peace anyway. In the past year, there have been several rounds of layoffs as the industry has shown signs of struggle. Part of the burden comes from high excise taxes and pressing competition from the black market.
The problems look more or less the same as in the U.S. With the difference that Canada has set a regulatory blueprint for everyone else to follow. Cannabis is legal federally. Licensed production of weed is controlled by the federal government, while distribution and retail is controlled by provincial governments.
The Canadian market has seen double-digit growth in the years since legalization, and consumers have access to safe supplies of cannabis products through 3,000 licensed retailers.
Legal retailers earn somewhere between $250,000 and $500,000 per year. Though these figures are uncited, they are very probable. If your company is among the profitable ones, chances are you’re making over a million annually in gross revenue.
Canada is also working to improve other drug laws. Recently, British Columbia became the first Canadian province to decriminalize possession of small quantities of other recreational drugs, such as opioids, methamphetamines and MDMA, under a three-year government pilot program.
More news from Canada on Soft Secrets:
- The Legal Cannabis Market in Canada
S
Stephen Andrews
