A new report from Deloitte projects Canadians will create C$4.34 billion in sales of legal recreational cannabis product during 2019.
Deloitte’s latest cannabis market projection report released on Tuesday (June 5) indicates the entire Canadian cannabis market has the potential to reach close to C$7.2 billion by 2019.
As part of this report, the research firm surveyed cannabis consumers on their consumption trends and how that may change with the upcoming legalization of recreational cannabis in the country.
According to the Canadian Press the results from an online survey of 1,500 Canadians, which took place between March 6-20, created the projection of C$4.34 billion for adult-use cannabis.
“Executed well, legalization will also help shift a considerable proportion of cannabis consumption to legal channels in the years to come,” Deloitte said.
In its conclusion Deloitte wrote the effect of legalization for cannabis in Canada, on its own, won’t move consumers to switch from illegal sources into legal government approved retailers. “[O]ur research suggests the right mix of quality, price and safety could just do the trick.”
Canadian licensed producers are working not only to develop the product needed for their sales projections but to entice consumers into joining legal avenues for the consumption of the drug, Allan Rewak, executive director of the Cannabis Canada Council, told the Investing News Network (INN).
During the Lift & Co Cannabis Expo in Toronto in late May, Rewak said a mission for the council, a grouping representing the interests of LPs, is to “migrate” consumers into the government approved market.
The study also found “current and likely consumers” are, at present, expecting to pay “slightly more” for legal products. On the things needed to really entice consumers away from illegal suppliers, Deloitte wrote:
High product quality and integrity (as affirmed by quality testing) as well as a range of competitive price points will be needed to persuade current consumers to move their purchases over to legal sources. Delivering a superior customer experience will be of vital importance.
The promise of the sales from the legalized adult-use market in Canada is starting to become a reality. Projections are closing in on the first year of sales and this latest one by Deloitte shows a high expectation of the growth the industry will see during 2019.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.