In part 1 of this article, we discussed the uneven rollout of recreational cannabis stores in Canada. In this article, we’ll take a shot (from our armchair) at guessing retail cannabis store revenue. As we mentioned last month, issuing more retail cannabis licenses in Canada is the key to growth. You might be thinking “Well, duh!”, but some provinces took months to get any stores off the ground.
We calculated an unscientific ballpark average revenue per store for some provinces based on Statistics Canada monthly recreational retail cannabis revenue figures and a province’s store count. Statistics Canada Cannabis store revenue figures include public, private and online stores, so we are aware that our estimate is off, but it does give us some idea of revenues from province to province. By dividing monthly total revenue by the number of stores, we arrive at an average revenue per store.
Because the latest Statistics Canada retail cannabis revenue figures are for June 2019, we had to go back in time using the Internet Archive Wayback Machine to find the store count per province in June. Because not all provincial websites are archived by the Wayback Machine, and not all dates are archived, we’re only calculating average revenue for a few provinces where June store counts could be confirmed.
June 2019 total revenue: $25,855,000.
Number of stores: 24 on June 12 (currently 25).
Average revenue per store using the June 12 store count: $1,077,291.
June 2019 revenue: $6,179,000.
Number of stores: 17 on January 4, 21 on March 20, 35 on August 8 (currently 35).
Average revenue per store using the March 20 store count: $294.238.
June 2019 total revenue: $5,232,000.
Number of stores: 23 on June 6 (currently 25)
Average revenue per store using the June 6 store count: $227,478.
According to Arcview Market Research, “Spending on adult-use cannabis is forecast to grow from $112.5 million in the partial year of 2018 to almost $4.8 billion by 2024″.
As provincial governments license more retail cannabis stores in Canada, and growers ramp up production to meet demand, the future looks very promising. If Ontario is any indication, more retail stores is key. In April 2019, Ontario’s retail cannabis revenue was $19,687,000 – more than double that of March’s revenue of $7,692,000 when retail stores were yet open in that province.
More stores may also entice cannabis users away from the black market. The Statistics Canada National Cannabis Survey for the first quarter of 2019 reveals that 38% of Canadian cannabis consumers reported using the black market (dealers, illegal online stores), which is down from the 51% reported in the same quarter of 2018. More legal stores mean easier access to cannabis and less reason to go to your friendly neighbourhood dealer or illegal online stores whose products are unregulated and of dubious origin.
If you’re considering starting a retail cannabis store in Canada, working with a cannabis license consultant can increase the chances of license approval. Once your store is open, our services can help you remain compliant by implementing in-store safeguards such as policy and procedure manuals and staff training.