The marijuana industry has come a long way from its first introduction to North American culture. While negative stigmas continue to plague the field, new studies, changing attitudes, and impending legalization are slowly shifting former thoughts.
Legalization will certainly affect the country’s economy. With Canada taking the lead as one of the first countries to legalize marijuana nationally, it’s opening export opportunity and growth, with the potential to supply products to other countries.
As a substance, some brands, particularly those in the alcohol sector, are keeping an eye on forecasted statistics to see whether legalization will significantly hamper sales in their markets. Most don’t expect Canada’s buying habits to change in a night, and current estimates predict these sales won’t significantly impact the booze industry.
Stats Canada surveyed Canadians to find out just how much marijuana they’re consuming, where they’re getting this drug, and how much they’re spending. Youth, referring to as those under 25, aren’t using marijuana as much as some might think. Even the millennial age group, covering those from 25-34, only reported some use. A large consensus, approximately three-quarters of those surveyed agreed that legalization would not impact their decision to increase their cannabis consumption.
When it comes to buying habits, current users are concerned about the lack of product available from licensed producers. It’s a big reason for retaining familiar methods instead of purchasing through the legal route. Habits are changing in terms of product cultivation, where niche licensed producers, unlike corporate-run growers, are focusing on selections that offer consumers more choice, creating unique strains with benefits and tastes unlike popular strains already on the market. As producers become better equipped to handle the licensing process, this trend is expected to continue.
What’s more, there’s certainly a gap in the cannabis market. Men and women use marijuana differently—for both consumption and personal reasons. Licensed producers are discovering their need to accommodate the entire market, which means developing strains that speak to both men and women.
The Black Market
Will the black market disappear once marijuana is legal? It would be naïve to think so. The provinces and territories are individually responsible for organizing sales and distribution of marijuana, and their plans don’t jive well with users. Whether it’s because people prefer using their own connections or they don’t like the supply that will be available in stores, those who regularly use marijuana now likely won’t abandon their ways to obtain it legally.
According to Stats Canada, an estimated 90% of pot is bought for illegal, non-medical purposes, totalling approximately $5.7 billion in revenue. The government has several major factors to compete with if it hopes to be successful: price, supply, taxes, and the consumer experience. Retailers should be conveniently located, they should sell a curated yet wide selection of products, and they should potentially provide consumers with convenient purchasing methods, such as online shopping. Ideally, it should be more convenient to obtain marijuana legally than through a dealer or dispensary.
Many believe the government’s set price of $10.00 a gram is too expensive. It makes it hard to entice buyers to change their habits, leaving them to continue to stick with their current means of obtaining cannabis. The government and provinces will have to match the black market—if not beat it entirely—if they hope to change buying patterns. Right now, consumers like their price point and access.
The black market will never go away completely, but there are predictions that it could take a downturn once the market stabilizes.