Sales of adult-use cannabis in Canada are slowing more quickly than expected, according to a new report, and at least one analyst says structural changes are needed for the nation’s industry to recover growth momentum.
A report, written by Toronto-based analyst Frederico Gomes of ATB Capital Markets, notes that Canadian marijuana retail sales grew an estimated 7.7% year-over-year in September, which would be the lowest since legalization occurred in late 2018.
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Decelerating nationwide sales add to a growing list of challenges for Canadian cannabis producers and retailers.
Some of those include:
Gomes attributes growth deceleration to:
Price compression, as less margin flows through to businesses. Declining sales volume growth of unique items sold, meaning consumers are buying bigger packages.
Earlier this year, ATB warned that recreational cannabis sales growth rates had been slowing every quarter for the past two years.
“This trend indicates a market that
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