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Cannabis Canada Weekly: November pot sales fall 2.9%; Hexo outlines cost-cutting path

 

 

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BNN Bloomberg <[e-mail]>	7:00 AM (40 minutes ago)
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Can't see this email properly? View Online   November pot sales fall 2.9% to $353M as Ontario continues to drive market Canadians bought $353.6 million worth of cannabis in November with Ontario continuing to drive overall market growth, according to Statistics Canada.  The national data agency reported November retail sales figures on Friday that showed Canada's legal recreational pot industry currently operates at an annual run rate of about $4.24 billion. Cannabis retail sales fell 2.9 per cent in November from October, but rose by just 0.4 per cent on a per-day basis, and were up 35 per cent on an annual basis.  Cannabis underperformed national activity with total Canadian retail sales climbing 0.7 per cent in the month.   As usual, Ontario continued to drive the growth in Canada’s cannabis market with $148 million of legal pot sold in the province - one of only two (Saskatchewan is the other outlier) to report an increase in month-over-month sales in November. Ontario now represents 40.2 per cent of all cannabis retail sales in Canada, up from about 32 per cent a year earlier, the StatsCan data showed. Craig Wiggins, managing director of The Cannalysts Inc., an independent cannabis research firm, said that while sales growth appears to have flattened, he notes that the sales velocity - the monthly trend of year-over-year retail activity - has stopped declining following a six-month slide.  "So there's still growth, but the growth isn't nearly as rapid as it has been in the past," Wiggins said in an interview. "When dollar growth grows, there's opportunities for companies. When dollar growth starts retreating, there's less opportunities to come into the market." Wiggins said that Ontario will continue to be the main driver of growth in the Canadian market as more stores open in strategic locations to avoid saturating the province, something that he said is being observed in Alberta.  It remains to be seen if the pace of growth in the Canadian market will continue to keep up with analyst expectations of the country's cannabis sector peaking at $8 billion in sales by 2025. That could be due to a potential overstating of initial estimates of the illicit market, Wiggins stated. Many consumers that buy in the illicit market may have already shifted over to legal stores, he noted.  "At the end of the day, I believe in the numbers I can see," he said. "So, the numbers are telling me that the market is still growing. It's just not growing at the same clip."  Early estimates suggest that November's sales decline may be short-lived. Cannabis data provider Hifyre forecasts that $370 million of cannabis was sold in December, although it should be noted that the firm's previous estimate of November's data point was off by about $15 million.    THIS WEEK'S TOP STORIES