Cannabis sales in Ontario, Canada, rise 21% in first half of year

Cannabis sales in Ontario, Canada, surged during the first half of the year, with licensed retailers selling 21% more marijuana by volume than they did during the same period last year.

According to a report from the Ontario Cannabis Store (OCS), the government-owned marijuana wholesaler shipped 50.2 million units of regulated products to retailers in the province between Jan. 1 and June 30, up 44 million compared to the same period in 2023.

Sales at authorized cannabis stores in the province were up 11.8% to reach more than $1 billion during the first six months of 2024, according to the report, “Ontario Cannabis Marketplace: By the Numbers,” released Thursday by the OCS.

Supplying cannabis goods to Ontario retailers makes the wholesaler the world’s largest distributor of marijuana products.

Chris Jones, president of Toronto-headquartered retailer Cannabis Xpress, said that OCS sales are likely up because more stores were open during the first half of 2024 compared to the same period last year.

“Per-store sales probably aren’t increasing,” Jones told MJBizDaily.

“On a per-store basis, sales probably went down just because there are more stores in certain areas.”

The number of licensed marijuana stores increased 3% year-over-year to reach 1,721 total stores.

Store numbers were up in every region of Ontario except Toronto, which dropped 3% to 388 after losing 11 retailers during the first half of 2024.

In the greater Toronto area, however, the number of stores increased 22% to 250 stores during the same period.

Jones attributed Toronto’s loss of stores to the city being saturated with retailers.

“When the applications opened up, everyone flooded to Toronto because it’s the biggest major city in Ontario,” he said.

“Whenever licensing opens up, everyone always goes to the biggest city first to open up stores.”

In January, the Ontario government increased the number of retail stores a licensed cannabis business can operate from 75 to 150.

It was an effort, Jones said, to foster a more competitive and accessible legal cannabis market.

Jones, who operates 14 Cannabis Xpress stores in Ontario, said he’s focused on opening more stores in New Brunswick, where he has three of the nine licenses authorized in the province.

“There’s still room to open stores in Ontario, but most places are pretty saturated with stores right now,” he said.

“Until more stores close down, I am unlikely to open up more stores (in Ontario) unless a new municipality opens up and we enter it, or if we find a lucrative/accretive store that wants to sell to us.”

The best-performing Cannabis Xpress stores are in New Brunswick, followed by the Toronto suburb of Brampton, Jones said.

The number of stock-keeping units (SKUs) available in Ontario’s regulated cannabis market is up 19% to 4,746.

The OCS added 1,816 new SKUs and dropped 1,053.

Cannabis Xpress maintains 200-250 SKUs, although Jones said most retailers carry about 500.

“I have small stores in small towns with a lean team,” he added.

Exclusive industry data and analysis to help you make informed business decisions and avoid costly missteps. All the facts, none of the hype. 

Featured inside: 

While he declined to identify specific brands that sell the best, Jones said the introduction of new product categories such as infused pre-rolls and pre-milled flower cater to evolving consumer preferences and help diversify the cannabis consumer base.

“The OCS has also expanded its product catalog significantly, adding over 1,000 new items from licensed producers,” Jones said.

That provides retailers with a wider selection of products, but it also makes it more difficult for licensed producers to have products that stand out.

The average wholesale price per gram of dried flower was $3.84 in the first half of 2024, down from $4.05 during the same period in 2023.

According to the OCS report, the wholesaler is “mandated to provide a competitive alternative to the illegal market.”

Although flower prices are lower, Jones said it has not improved his margins.

“Prices are coming down,” he said, “but the taxes are still pretty significant, so it doesn’t carry over.”

Margaret Jackson can be reached at margaret.jackson@mjbizdaily.com.