As Canada continues to navigate its federally regulated marijuana industry, 2023 marked a significant milestone in terms of capturing a larger share of the illicit market. According to the annual Canadian Cannabis Survey, an increasing number of consumers are opting for legal cannabis products, indicating a pivotal shift in purchasing habits.
Understanding Illicit-Market Capture
For legal cannabis businesses, illicit-market capture is a vital metric, representing the total addressable market (TAM) – the potential revenue available to those operating legally. This metric is particularly crucial outside the United States, where, despite state-level legalizations, federal illegality still looms, rendering underground sales often included in TAM models irrelevant for legal enterprises.
Survey Insights: Legal Purchases on the Rise
The 2023 survey, which garnered responses from about 11,700 individuals, highlighted a striking increase in legal cannabis procurement. A notable 69% of Canadian cannabis consumers reported "always" buying their marijuana from legal or licensed sources. This percentage shows a substantial rise from 48% in 2022 and a mere 37% in 2020, indicating a growing trend towards legal purchases.
The survey also observed a decrease in consumers who "never" buy legally, dropping to 9% in 2023 from 15% in 2022. This trend reflects a broader acceptance and trust in the legal cannabis market.
Consumer Spending Patterns
Another interesting finding is the change in consumer spending. On average, Canadians spent about CA$63 per month on cannabis in 2023, with CA$54 going towards legal purchases – a decrease from CA$65 in 2022. Illicit spending saw a more drastic fall, with consumers spending approximately CA$8 per month in 2023, compared to CA$47 in 2020.
Other Key Findings
- Home cultivation is reported by 4% of medical and recreational consumers.
- Price and convenience are the top factors influencing where consumers buy cannabis.
- Only 9% cited potency as their primary consideration.
Implications for the Cannabis Industry
These findings underscore a significant shift in consumer behavior, with a growing preference for legally sourced cannabis. This trend presents an opportunity for businesses in the cannabis industry, including growers, labs, edibles manufacturers, and retailers, to capitalize on an expanding legal market.
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