Following an announcement that British Columbia has entered the cannabis delivery scene, this event took center stage for examining Canada’s complex cannabis landscape. The industry has navigated various roadblocks since its legalization nearly five years ago.
The Canadian cannabis market is a promising one, as underscored by EY Canada’s recent report. It revealed that the market ballooned from $1.2 billion in 2019 to an impressive $4.7 billion in 2022. Additionally, the nation now hosts over 3,000 cannabis retail locations.
As the first G20 nation to create a national legal cannabis market, Canada is poised to be a global pacesetter in cannabis regulations. Yet, there are obstacles to overcome. Executives in an EY Global Cannabis survey expressed concerns such as cutthroat competition (76%), pricing issues (73%), and capital scarcity (42%).
Moreover, complications like supply chain inefficiencies, excessive taxes, and competing with an untaxed black market make profitability elusive for many. A surprising 58% of publicly-traded cannabis firms did not meet board expectations last year.
Going ahead, it’s critical for cannabis companies to reassess their strategies and goals. Industry leaders must act now to secure funding for the next 6-12 months and focus on operational efficiency and prudent financial management. Businesses will need to trim their sails, especially considering that half of the global cannabis executives plan to either maintain or reduce capital investment.
Retailers, too, face their own hurdles. Overextension in retail locations necessitates a more strategic approach to location optimization, driven by consumer demand.
Regulatory initiatives could bring relief. For example, the Ontario Cannabis Store’s recent move to cut price margins is expected to return $35 million to licensed operators in 2023 and an additional $60 million in 2024. Businesses are advocating for more relaxed promotional and packaging rules, as well as a unified national excise stamp to replace the current province-wise system.
In summary, 2023-2024 could be transformative years for Canada’s cannabis industry, provided businesses and regulators alike work towards operational excellence and strategic changes. Doing so would not only build confidence but also cement Canada’s reputation as a global leader in the cannabis marketplace.
https://www.cannabisnews.org/canadian-cannabis-news/navigating-the-highs-and-lows-unpacking-the-future-of-canadas-cannabis-market/