Although Canadian cannabis stocks were under considerable pressure in 2021, the size of the market continues to grow and this is a trend that we are closely following. 

According to Statista Canada, the recreational cannabis market is expected to be a $5.9 billion market in 2022. By 2026, the firm expects Canada’s recreational cannabis market to be an C$8.6 billion market which implies more than 100% growth since 2021.

The most recent sales data out of Canada was for the month of October. During the month, there were C$354 of Canadian retail cannabis sales which represented a more than 35% increase on a year-over-year basis. This amount was almost 3% higher than the prior month and November data is expected to be released in late January.

While we are impressed with the growth of the market when compared to 2020, October’s numbers came in below Hifyre IQ’s forecast of C$360 million. The data analytics provider expects November Canadian retail cannabis sales to be lower than what was reported for October and we will monitor how the trend continues into the end of the year.

The Canadian cannabis industry continues to be negatively impacted by COVID lockdowns and we will monitor how this factor plays a role in the advancement of the industry in 2022. Although COVID has been a headwind for growth, the Canadian cannabis sector benefited from an increase in the number of retail outlets as well as falling flower prices. 

In Ontario (the largest province by population) sales were up 3.0% from September and 77% from a year ago, reflecting the increase in the number of stores. Sales in Alberta (the second largest province by population), was up 4% from September and up 12% from a year ago. We will monitor how these two provinces continue to perform in 2022 and would not be surprised to see other provinces capture market share.

Hifyre IQ released data on the type of cannabis products that were sold in October and dried flower and pre-rolls continued to dominate the market. The data analytics firm said these two categories accounted for more than 70% of sales in October and we expect cannabis 2.0 products to capture additional market share in 2022.

One of the reasons we are closely following the Canadian cannabis market is related to the leverage that it has to burgeoning international markets. In 2022, we expect the market to be highly focused on Canadian companies that have leverage to Germany and/or Mexico. We expect these countries to steal a lot of the international cannabis headlines in 2022 and believe our readers should be aware of this possibility.