Report forecasts rapid growth of recreational cannabis market in Canada

Brightfield Group projects cannabis sales increasing to more than $4.1 billion in 2021.

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A report sees bright prospects for recreational cannabis in Canada.

A market update released by the Chicago-based Brightfield Group forecasts sales rising to $4.1 billion in 2021.

To explain, this represents a 60 percent increase over $2.6 billion worth of recreational cannabis purchases in 2020.

Additionally, the Brightfield Group report anticipates sales to continue rising over the next five years following 2021.

Based on the research firm’s projection, annual cannabis sales will total $8.1 billion in 2026.

The company’s report also identified factors that will drive growth.

These include the “expansion and diversification of reasonably-priced, quality product”.

As well, growth will hinge on the “evolution of a more market-friendly regulatory environment – which looks likely”.

This will entail, among others, revisiting or lowering tax rates.

Similarly, the report sees more efficient and broader licensing happening in Canada.

In sum, growth will “continue at a rapid pace as regulations loosen further and the market irons out supply, demand and quality issues”.

Further, the report expects the market to reach capacity by 2024.

Canada legalized cannabis for recreational use in 2018.

The market marked its second full year of legalization in 2020, with sales growing 120.5 percent from 2019.

CannCentral reported on February 22, 2021 that the retail sector experienced a boom last year.

Specifically, the number of licensed cannabis stores increased to around 1,400 across the country in 2020, up from 760 shops in 2019.

Report says flower rules cannabis market

In its report, the Brightfield Group also took note of so-called Cannabis 2.0 products like edibles and beverages.

The firm stated that these products contributed to the growth of the cannabis market, and will continue to do so.

Speaking of products, the report anticipates that cannabis flower or bud will remain the dominant product in the market.

The firm projects that flower sales will reach 2.37 billion out of combined receipts of $4.1 billion.

Furthermore, pre-rolls will take a 16 percent share of the market, coming third to vapes and concentrates with a share of 17 percent.

The report anticipates edibles, and oils and capsules to capture eight percent and seven percent, respectively of the market in 2021.

In addition, the research firm expects the Canadian flower market to grow at a 16.6 percent compound annual growth rate (CAGR) from 2020-2026.

Meanwhile, pre-rolls will have a CAGR of 8.6 percent.

“Flower is quintessential cannabis – the format that has been ground up and smoked since the ancients first discovered the intoxicating property of this little green flower,” the report stated.

Follow Carlito Pablo on Twitter at @carlitopablo

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