Right-Sizing the Canadian Recreational Cannabis Market Report: 2017 - Revenues of $5 Billion CAD in FY2018, Increasing to $7 Billion CAD in FY2022 are Projected - ResearchAndMarkets.com

DUBLIN--()--The "Right-Sizing the Canadian Recreational Cannabis Market" report has been added to ResearchAndMarkets.com's offering.

In April 2017, the Canadian government announced its intention to legalize recreational cannabis. Sales may begin as early as the middle of 2018 - a moving target.

The Canadian Recreational Cannabis Market is modelled over a four-year time horizon, focusing on cross-price elasticity of demand of individual consumer cohorts. Second order model drivers include Canadian population dynamics, producer efficiency gains, and spillover effects of recreational legalization.

In summary, this research finds:

  • Canadians will consume 473.7 metric tons of recreational cannabis in FY2018; consumption will increase to 860.8 metric tons by FY2022.
  • At the inception of legalization pretax prices will average $8.33 CAD per gram, falling 28.3% to $5.97 CAD by FY2022. As in any black-to-white market, legal producers must underprice illegal ones to maintain a sustainable market, and thus, Canadian Licensed Producers should seek to price competitively and pass on associated costs and other efficiency gains to end consumers.
  • Throughout the modeling period, heavy and regular users drive the lion's share of demand (see graph above), 95% in FY2018 to 94.5% in FY2022.
  • Total revenues will increase over time, with higher sales volume offsetting downward pricing pressure. We project revenues of $5.0 billion CAD in FY2018, increasing to $7.0 billion CAD in FY2022.
  • Importantly, increasing revenues should not be conflated with overall market growth; it is instead a function of existing consumers moving from the black to the white market. Contrary to the consensus view, we predict that total market demand will contract by an average of 0.98% annually over the four year period in the absence of population growth.
  • With expectations for overall market growth tempered, investors may wish to focus on Licensed Producers that emphasize cost efficiency.

Key Topics Covered:

  1. Executive Summary
  2. Introduction
  3. Who Drives Recreational Sales?
  4. Consumer Profiles
  5. Puff, Puff, Pass: Sales to New Users Will Be a Flash in the Pan
  6. Legality Bump: Word of Mouth Effect
  7. Will Edibles Take a Bite Out of Cannabis Flower Sales?
  8. Unpacking Cannabis Expenditure
  9. Link Between THC Yields and Prices Is Overwrought
  10. Bridging Perception and Reality: The Chemistry and Biology of Potency
  11. A Zero-Sum Game: Tug of War Between BMC and CRCM
  12. Segment Proclivity for Contraband Procurement
  13. Supply-Side Dynamics
  14. Death and Taxes
  15. The Dealer Next Door
  16. Cost Structures by Growing Operation
  17. End Game: Revenue Trajectory
  18. Dissecting Aggregate Demand
  19. End Game: Revenue Trajectory
  20. References

For more information about this report visit https://www.researchandmarkets.com/research/j3s9br/rightsizing_the?w=4

Contacts

ResearchAndMarkets.com
Laura Wood, Senior Manager
press@researchandmarkets.com

For E.S.T Office Hours Call 1-917-300-0470
For U.S./CAN Toll Free Call 1-800-526-8630
For GMT Office Hours Call +353-1-416-8900

Related Topics: Analgesics

Contacts

ResearchAndMarkets.com
Laura Wood, Senior Manager
press@researchandmarkets.com

For E.S.T Office Hours Call 1-917-300-0470
For U.S./CAN Toll Free Call 1-800-526-8630
For GMT Office Hours Call +353-1-416-8900

Related Topics: Analgesics