The Gradual High: Cannabis Incidence
Updated January 2024
Pre-legalization of cannabis in Canada, about 1 in 3 Canadians had ever consumed cannabis in their lifetime. Approaching legalization in 2018, share prices surged as producers, brands and consumers expected a flood of consumption into the legal market. Instead that was not the case. Despite the prediction that legalization would be a category growth driver, over the next few years we saw little movement in the rate of Canadians trying cannabis.
Now, 5 years since legalization, the consumption rate has gradually increased. As of December 2023, nearly half of legal-consumption-aged Canadian adults have ever consumed cannabis. That is a 15% population increase over 5 years.
Measured R3M % of Canadians who have ever consumed cannabis vs have consumed in P4W
Source: Cannatrack, n=239,284, % of Canadians, April 2019 to December 2023
Is there a change in sentiment towards cannabis, a true lift in Canadian consumption, or a shift from illicit to legal markets?
With a gradual incidence growth rate, it may be assumed that there are new light consumers trying cannabis for the first time. However, there is an increase in heavy consumers of cannabis. These weekly or more frequent consumers of cannabis aren’t trying it for the first time. Instead, these consumers are converting from previously consuming in illicit markets to purchasing in legal outlets.
Legalization was not a barrier in Canada to the cannabis industry, and therefore growth moving forward may not be led by new entrants to the category. Instead, growth in cannabis will be achieved through penetration of existing cannabis consumers, particularly heavy consumers of the category, as well as continuing to convert illicit market shoppers to legal market shoppers. Understand how licensed producers attract cannabis consumers who are not well served by the illegal market, for reasons such as safety, and ensure competitive price points to continue to attract consumers to this form of purchasing the category.
