Apr 16, 2020
Ontario online pot purchases jump 600% amid COVID-19 pandemic, data shows
Ontario pot orders surge amid quarantine
Cannabis purchases rose as much as 600 per cent since the beginning of March in Canada's biggest market thanks to stockpiling by consumers during the COVID-19 pandemic - and demand may be sticking around.
Sales data provided by the Ontario Cannabis Store (OCS) over the past six weeks - the same period that COVID-19 spread across the country - show legal pot appears to be a more "habitual" purchase than a one-time novelty, according to Cheri Mara chief commercial officer at the provincial retailer.
While it may be too early to really gauge how COVID-19 will impact legal cannabis sales over the long term, the OCS data provide a highly precise glimpse at how people are consuming cannabis during the pandemic.
Daily online orders hovered in the mid-2,000 range for the first half of last month, and abruptly tripled to 6,042 on March 16, the same day that Prime Minister Justin Trudeau announced Canada would restrict entry at the U.S. border.
Orders averaged just below 5,000 a day until April 3 when they shot to a high of 13,691 - the same day Ontario declared cannabis stores were not an essential business. Those stores were able to re-open four days later but only with curbside and delivery service.
"To borrow an old saying: the toothpaste is out of the tube," Mara said. "Restricting access would have created an opportunity for the illicit market."
Nearly two weeks later, daily sales have held steady around the 9,000 level, almost five times the amount made prior to the pandemic. More than one-third of all orders are classified as new OCS customers, the data showed.
"It's going to stabilize, but I don't think we're going to be going back to 2,300 orders a day," Mara said.
The virus' impact on sales has been mixed so far in other provinces. Leamington, Ont.-based Aphria Inc. disclosed in a filing Tuesday that Alberta's provincial retailer found pot shops have reduced their wholesale orders by 25 per cent, while Quebec's retailers have seen sales rise 40 per cent.
The data, however, corroborate early assumptions that cannabis is something that consumers aren't willing to give up. Last month, MKM Partners analyst Bill Kirk published a survey suggesting cannabis is among the most resilient discretionary spending category for U.S. consumers as a result of COVID-19.
"I really do believe we're setting a new baseline in terms of behaviour," Mara said. "Cannabis, like many other goods, is becoming habitual in terms of a purchase pattern."
The OCS doesn't anticipate the demand surge will result in cannabis supply shortages this year, but infused edible products may not be as readily available as dried flower, Mara said.
The agency's online store will sell infused beverages later this month as well as a larger assortment of cannabis seeds right in time for consumers to grow at home this summer, she added.
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