DUBLIN--(BUSINESS WIRE)--The "Canadian Legal Recreational Cannabis Market 2018-2022" 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.
We modeled the Canadian Recreational Cannabis Market 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, the 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. Revenues of $5 billion CAD are projected for FY2018, increasing to $7 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, it is predicted 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:
- Executive Summary
- Who Drives Recreational Sales?
- Consumer Profiles
- Puff, Puff, Pass: Sales to New Users Will Be a Flash in the Pan
- Legality Bump: Word of Mouth Effect
- Risks of Narcotic Abuse
- Will Edibles Take a Bite Out of Cannabis Flower Sales?
- Unpacking Cannabis Expenditure
- Link Between THC Yields and Prices Is Overwrought
- Bridging Perception and Reality: The Chemistry and Biology of Potency
- A Zero-Sum Game: Tug of War Between BMC and CRCM
- Segment Proclivity for Contraband Procurement
- Supply-Side Dynamics
- Death and Taxes
- The Dealer Next Door
- Cost Structures by Growing Operation
- End Game: Revenue Trajectory
- Dissecting Aggregate Demand
- End Game: Revenue Trajectory
- Licensed Producer Profiles
- Aphria Inc.
- Canopy Growth
- Aurora Cannabis
- CanniMed Therapeutics
- Cronos Group Firm
- Emblem Corp Firm
- Emerald Health Therapeutics
- Newstrike Resources Ltd
- Harvest One Cannabi Firm
- Invictus MD Strategies Corp Firm
- Medreleaf Corp. Firm
- OrganiGram Holdings Inc. Firm
- Supreme Cannabis Company Firm
- Hydropothecary Corporation Firm
For more information about this report visit https://www.researchandmarkets.com/research/3znjbg/canadian_legal?w=4