Canadian Cannabis Retail Sales Miss Deloitte Forecasts
According to data provided by Statistics Canada, Canadian retail cannabis sales exceeded $100 million in July—setting a new record for the monthly cannabis sales in Canada. With approximately $676 million worth of cannabis products sold through retail outlets since cannabis’ legalization in 2018, the month of July alone appears to have accounted for almost a quarter of Canada’s year-to-date cannabis sales.
But while July may have certainly marked a milestone for retail cannabis sales in Canada, it also provides a grim reminder as to how painfully off-course retail cannabis sales have gone.
Cannabis Business Plan stated that,
“Legal [recreational] sales are expected to [make up] more than half of [the $7.17 billion cannabis market in Canada in 2019] – up to $4.34 billion.”
The figures that Cannabis Business Plan is referring to were sourced from the 2018 Deloitte Cannabis Report—a report that already appears to be showing its age. For Canadian retail cannabis sales to hit the 2018 Deloitte Cannabis Report’s projections, sales would have to exceed $3 billion between August and October 2019. Needless to say, this kind of spike in sales is simply impossible.
While many analysts could be forgiven for their overexuberant cannabis market forecasts, Deloitte is America’s 4th biggest private company. If Deloitte is this far off target, then what does that say about the industry’s other forecasts? The shortfall in Deloitte’s recreational cannabis sales estimates is doubly concerning when one considers that the company also projected billions of dollars in revenue generation from Cannabis 2.0 (the legalization of cannabis edibles topicals, and concentrates). There could be severe consequences for cannabis investor sentiment should Deloitte’s edibles sales projections go the way of their recreational cannabis sales projections.
With the legalization of cannabis edibles just weeks away, Canada’s cannabis industry is at an inflection point. However, if the launch of recreational cannabis in Canada is anything to go by, cannabis investors may have to wait until mid-2020 until the full impact (or lack thereof) of Cannabis 2.0 is known.