Ontario was the only province in Canada to see lower month-over-month sales of adult-use cannabis in December, according to the latest Statistics Canada data – the latest sign that the provincial government continues to struggle to get a handle on the new industry.
Sales in Ontario dropped to just 8.7 million Canadian dollars ($6.6 million) in December, down 1.5% from CA$8.9 million the previous month.
December’s sales are a 25% drop-off compared to October’s sales of CA$11.7 million – the first month of legalization.
Industry sources aren’t surprised by Ontario’s dismal sales figures, because the province has yet to open brick-and-mortar stores.
All sales in Canada’s largest economy thus far have been through the online Ontario Cannabis Store, which itself saw a rocky launch.
The province recently awarded licenses via lottery to 25 businesses, which are required to open their doors in April or face steep fines.
Deepak Anand, a cannabis industry expert based in Vancouver, British Columbia, cited Ontario’s “somewhat dysfunctional” online system and the absence of any physical legal retail stores as reasons for the declining sales.
“It’s not surprising given the horrible rollout of the Ontario Cannabis Store program at the outset in October,” he said.
“We saw the OCS website not able to keep up with demand, call centers were slammed, orders weren’t shipped for a very long time. So there seems to have been some growing pains at the outset of the launch.”
British Columbia and Ontario have been at the bottom of per-person sales since Canada legalized cannabis Oct. 17, 2018.
Canada’s westernmost province suffered through its own growing pains.
British Columbia’s sales of CA$1.23 million are second-last among the 10 provinces, edging out only Saskatchewan’s CA$970,000. Even tiny Prince Edward Island reported higher sales than B.C. in December at CA$1.29 million.
Alberta led Canada with CA$13.5 million in sales in December, followed by Quebec at CA$11.9 million.
This data includes both online and physical cannabis stores.
Modest growth overall
Overall, Canada’s provinces and territories recorded a modest bump in sales for December.
Sales of recreational cannabis across Canada that month were CA$55.2 million, up slightly from November’s CA$53.2 million and October’s CA$43 million.
Analysts expect sales to improve significantly as more physical stores open across the country and licensed producers deliver a greater variety of cannabis products to wholesalers.
New Brunswick received just 11% of the cannabis products it ordered from cultivators consistently, for example.
December was the first month all 13 provinces and territories reported sales data to Statistics Canada, including Manitoba, which recorded CA$4.2 million in retail sales.
The data includes both online and physical cannabis stores. It does not include business-to-business and wholesale sales.
Matt Lamers can be reached at [email protected]
To sign up for our weekly international cannabis business newsletter, click here.