BDS Analytics cuts growth outlook for Canada's cannabis market
Canadian sales of dried cannabis flower in February declined to the lowest level since legalization, as producers continued to stock up on marijuana ahead of the launch of edibles later this year, according to Health Canada.
Canadians bought 6,671 kilograms of cannabis in February, down about nine per cent from the prior month, and the lowest amount since the last two weeks in October when 6,415 kilograms were sold, according to data released by Health Canada late Wednesday.
While the legal cannabis market has been hit by supply issues and packaging problems, and the black market has continued to flourish, Health Canada stated the sales decline is largely attributed to fewer days in February. As well, the average daily sales of dried cannabis in February increased by one per cent compared to January - from 236 to 238 kilograms, the government agency said.
Meanwhile, the total amount of inventory of finished and unfinished dried cannabis held by cultivators, processors, distributors and retailers totalled 144,470 kilograms in February, approximately 21.7 times the amount of total sales in the month, Health Canada said. The total amount of finished dried cannabis products held in inventory at the end of February was 23,739 kilograms, up 17.7 per cent compared to January.
Total sales of cannabis oil in February was 7,244 litres, a decline of 8.5 per cent, although average daily sales of cannabis oil increased by 1.3 per cent.
Finished inventory held by provincial and territorial distributors and retailers increased 16 per cent for dried cannabis, and 9.3 per cent for cannabis oil from the prior month, Health Canada said.
Cannabis sales fell 4.9 per cent in January to $53 million from December, the most recent month data is available, according to Statistics Canada.
A survey of 500 cannabis users conducted by BMO Capital Markets released earlier this month found 35 per cent of all respondents indicated they have purchased legal recreational cannabis. Nearly two-thirds of those legal cannabis users indicated that they plan to purchase legal recreational cannabis again.
BMO added the survey responses also suggest that the muted level of legal recreational sales at the beginning of the year reflects continued supply shortages amid low inventory during the fourth quarter of last year, rather than a lack of demand for legal cannabis.
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