How to understand recreational cannabis sales

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The Canada Cannabis Spot Index was assessed at C$5.80 per gram this week, down 1.2% from last week’s C$5.88 per gram. This week’s price equates to US$2,067 per pound at the current exchange rate.

Each week, Business of Cannabis delivers a series of insights from our partners at Cannabis Benchmarks®.

This week, Cannabis Benchmarks examines household expenditure data issued by Statistics Canada, which shows some positive trends for the legal cannabis sector.

According to the data, Q3 2020 was the first in which the estimated household expenditure for recreational cannabis exceeded that spent in the illicit market. Cannabis Benchmarks attributes that milestone to increased purchasing at licensed retailers and legal online sellers during the pandemic, in addition to lower prices due to ample supply.

From Q3 2019 to Q3 2020, estimated household expenditures on legal cannabis grew 102%, while spending on illegal cannabis dropped by 19%.

While legal cannabis sales are growing, they are not cutting into expenditures on alcohol and tobacco products. All categories saw increases in spending from Q3 2019 to Q3 2020 – likely attributable in large part to the COVID-19 pandemic and accompanying impacts – and alcohol and tobacco maintained their proportions of total spending in that period relative to expenditures on cannabis, both legal and illicit.

Source: Canada Cannabis Spot IndexCannabis Benchmarks

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