Study: Pandemic likely not associated with increase in cannabis sales in Canada

| Staff

A new study says the increased supply of products and cannabis stores attributed to cannabis sales growth in Canada from 2020-2021, is not the COVID-19 pandemic. 

The study, published in the Drug and Alcohol Review, comes from several Canadian researchers in Ontario. 

Although numerous media reports over the past two years have attributed an increase in cannabis sales in Canada to the COVID-19 pandemic and associated lockdowns and/or stay-at-home-measures, the study argues that sales trends are more connected to an increasing supply and diversity of cannabis products and retail outlets.

“Our results suggest the pandemic was not associated with an immediate sales increase and that the sales acceleration during the pandemic could be explained by new product arrivals and other industry factors,” the report notes, adding that increasing cannabis sales during the pandemic were consistent with pre-existing trends and increasing store numbers. 

Although the market did experience increased growth in March 2020 when many covid-related measures were implemented, researchers say they found little data to support a cause-and-effect and cautions against this perception. 

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Cannabis store numbers in Canada increased from 178 in January 2019 to 707 in January 2020, and to 1,398 in January 2021, according to data cited in the report. Retail sales also grew from $55 million in January 2019, to $154 million in January 2020 and $279 million in January 2021.

Looking at this sales data from March 2019 to February 2021, the researchers do not entirely rule out covid-related impacts but emphasize that the arrival of new products like edibles or extracts that also began to become more available in early 2020, along with a rapid increase in retail stores was the more likely cause. 

National monthly legal cannabis retail sales, from March 2019 to February 2021, in Canadian dollars per resident age 15+. Dots represent observed monthly sales, solid lines represent regression-predicted sales assuming a March 2020 interruption and vertical bars represent total licensed cannabis stores. The vertical dashed line separates the pre-pandemic and pandemic periods. Image via study.

“Our study found three principal results,” continues the report. “First, rising store numbers and ongoing market trends explained most sales growth during 2020–2021, but sales grew more than what those two factors alone would have predicted. Second, there was no statistically significant or economically meaningful level change in March 2020, when pandemic responses began; but a sales drop was observed in January 2020, perhaps due to a post-holiday spending slump. Third, there was a modest but statistically significant slope change, as month-over-month sales growth accelerated during 2020–2021: the acceleration’s timing better fit January’s increasing product selection than March’s increasing pandemic stressors, though we cannot rule out the latter.”

This study was supported by a project grant (452360) from the Canadian Institute for Health Research (CIHR).

Featured image via BlogTO