Cannabis retailers across Canada saw record sales throughout 2021, but this market growth is showing signs of slowing from its rapid pace.

According to federal data agency Statistics Canada, the world’s second-largest cannabis market achieved sales of C$3.9 billion in 2021 among its eight largest provinces which regularly release monthly figures. This figure represents a 50% year-over-year growth from sales of C$2.6 billion in 2020.

While Canada’s most populous province, Ontario, was the country’s largest cannabis market with C$1.47 billion in sales in 2021, the fourth-largest province by population, Alberta, came in second with C$716.7 million in sales.

Quebec followed suit with C$601 million; British Columbia, C$556.2 million; Saskatchewan, C$158.3 million; Manitoba, C$148.8 million; Nova Scotia, C$95.5 million; New Brunswick, C$80.4 million; and Newfoundland, C$60.7 million.

Editor’s note: Prince Edward Island and Canada’s three territories (Yukon, Nunavut and Northwest Territories) have not consistently reported monthly sales figures in 2021.

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The year was marked by eight consecutive months of growth from March to October, then ended with record sales of C$382.4 million for December.

While record retail months may continue, to some extent, 2021 trends indicate that year-over-year growth is slowing. For example, January 2021 sales increased by 81.3% over January 2020 sales, but a steady decline progressed throughout the year to the point that December 2021 sales increased by 28.5 % compared to December 2020 sales.

Much of this early momentum in 2021 may have been tied to increased end revenue from “cannabis 2.0” rules. At the end of 2019, the Canadian adult retail market presented a host of new product options under new government rules, which allowed the sale of derivative products, such as edibles, extracts and topical products.

The addition of these product offerings paved the way for 61% year-over-year growth in 2020, followed by 50% year-over-year growth in 2021.

But those record numbers from last year came at a time when retail cannabis prices have fallen across all product categories, including up to 35% for some categories – cannabis concentrates and vape pens – according to reports. Market data from Seattle-based cannabis analytics firm Headset, which tracks data from Ontario, Alberta, British Columbia and Saskatchewan.

Headset data analyst Cooper Ashley has already said so Cannabis time that the record numbers were the result of consumer demand rising faster than prices were falling.

“In fact, the large increase in total purchase volume itself may have contributed to increased competition and price suppression in the Canadian market,” he said.

As the Canadian cannabis market continues to mature, the supply and demand balance for the industry still isn’t up to snuff, said Andrea Dobbs, co-founder and CEO of Village Bloomery. TCC.

Opened in 2015, the Village Bloomery is a cannabis retail business in Vancouver, British Columbia, a province that saw 50% year-over-year sales growth in 2021.

“In the unregulated market, you can find what you want when you want it, but in the regulated market, products are introduced and discontinued soon after,” Dobbs said. “We will spend time and energy educating people about the features and benefits of a product, which of course develops a customer base, only to then turn around and find that either the producers have decided to give up the product, i.e. the BCLDB. [British Columbia Liquor Distribution Branch] decides not to continue.

One of the BCLDB’s approaches to dismantling the unregulated market is to manipulate product prices and THC content, which is not always consistent with licensed retailers’ business operations, Dobbs said.

Specifically, Village Bloomery’s customer base is more nuanced and less concerned about prices and/or THC content, she said.

“Of course affordability is a concern, especially for those of us whose livelihoods have been directly impacted by the global pandemic, but most of us are struggling to keep prices as low as possible because we recognize the market is fragile,” Dobbs said.

She added: “There are many products that are in high demand and these are often sold out within seconds on the wholesale site, which I think demonstrates that there is a demand for this type of product. “

In addition to prices for vape pens and cannabis cartridges down 35% from January to December 2021, topicals (-30%), capsules (-20%), pre-rolls (-19%), flowers dried (-16%), tinctures and sublinguals (-16%), beverages (-12%), edibles (-11%) and oils (-11%) also all fell in equivalent price, according to Headset.

While price squeeze is most often driven by competitive pressures within a market, Ashley said, diversification of price points with brands aimed at providing offers that appeal to customers with buying habits different consumption is often the next trend in a maturing market.

One consumer trend Ashley said she analyzed in 2021 was the purchase of larger packs (more grams per pack) across four product categories: The average price of items in the pre-roll category increased by 6 % from January to December, while capsules (4%), edibles (1%) and beverages (1%) also increased.

In British Columbia, Dobbs said efforts have been made to implement order limits to prevent certain products from selling out so quickly, but in reality, there just aren’t enough orders. supply for everyone.

“Most of the hard-to-stock products are not products that BCLDB prioritizes for its own stores,” she said. “Having said that, I’m glad to see high-quality products on the market, and I’m glad to see that people who were buying from us before the regulations are back to looking for these products.”