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Why the Canadian Recreational Marijuana Market May Be Smaller Than Expected

The Canadian government will legalize recreational marijuana in 2018, which has understandably caused a rush of excitement as an entire country allows legal use of cannabis. But a new report says to not jump the gun on the industry.

A new report on the Canadian marijuana industry says estimates about how much cannabis will be consumed are largely inflated. Currently, experts expect that Canadian demand for marijuana in 2018 will be around 600 to 900 metric tons. However, GT Research says that number will actually be closer to 474 metric tons. They also estimate that by 2022, Canadian demand will only reach 861 metric tons. 

So why are the estimates so different? GT Research says it's about user habits. About 17 percent of Canadians say they'll try marijuana when it becomes legal. However, GT Research says current estimates use that data and assume many of them will be regular customers. In reality, most will only use the one time and never try it again. 

“The probability of cannabis habit formation for individuals who first try cannabis after [age] 25 is 1.4%,” GT research said in their report. “Half of adopters go on to use cannabis less than 12 times over their entire lives.” 

GT Research also noted that many people who consume high amounts of marijuana said they actually wouldn't participate in the legal industry because it would cost them more money than the black market.

Still, the Canadian cannabis industry is expected to experience major growth and success. Just maybe not the runaway freight train that everyone wants and/or expects.

(h/t Forbes)


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