The anticipated legalization of recreational cannabis in Canada is expected in July, which has companies like Canopy Growth Corp. (TSX:WEED) (OTC:TWMJF), Delta 9 Cannabis Inc. (TSXV:NINE) (OTC:VRNDF) and more investing millions to prepare.
Market Size Estimates
Earlier today, Canopy and Delta 9 were selected for one of four retail licences in Manitoba, and they've estimated the provincial cannabis market at $300 to $500 million annually.
If Manitoba's market is worth $300 to $500 million CAD annually, one could only imagine how large the entire Canadian recreational market is worth. Deloitte has already estimated that the Canadian retail market will be worth $4.9 to $8.7 billion CAD based on one simple equation:
Clearly, the equation above has an operative variable that can drastically change the estimated value of the cannabis market - the population of adult cannabis consumers.
Deloitte estimates that 22% of the population is made up of existing cannabis consumers, and an additional 17% might become cannabis consumers once legalized. With that said, these estimates were based on a survey of just 5,000 Canadian adults (19 years or older).
More Accurate Results are Coming
To get a more accurate estimate, Statistics Canada will be conducting a survey aimed at better understanding cannabis use in Canada.
The National Cannabis Survey is part of a larger initiative underway at Statistics Canada to track the impact of the legalization of non-medical cannabis, a change that may come into effect by mid-year.
Each quarter, a sample of 12,000 households will receive an invitation to complete the 21-question online survey. In addition to frequency of use, amount and types of product consumed, and prices paid, Canadians will be asked about changes in their behaviour or consumption patterns. Respondent information will be kept strictly confidential; data are collected under the authority of the Statistics Act.
Survey results will be released five to six weeks after the end of each collection period. Results will be used in conjunction with other data sources to ensure that Canadians are well-positioned to understand the economic, health and social impacts of legalization.
The National Cannabis Survey differs from Statistics Canada's recently-launched crowdsourcing platform, which collects information online on previous cannabis transactions.
It will be interesting to see how Statistics Canada's results differ from Deloitte's. To stay up to date with important developments in the cannabis industry, be sure to subscribe to one or more of our free email newsletters. Also, connect with The Daily Marijuana Observer on Facebook, Twitter, StockTwits and Instagram!