Canada’s medical cannabis market is currently experiencing a decline. There have been several factors that have contributed to this, especially with the legalization of recreational cannabis.
In this article, we’ll explore the challenges faced by the Canadian medical cannabis market and the reasoning for this decline.
Let’s get started.
Canada's medical cannabis market
The medical cannabis market in Canada is starting to see a decline in sales. Medical cannabis peaked in 2017, just before the legalization of cannabis with sales at 120 million dollars near the end of that fourth quarter.
However, recent data shows medical cannabis only reached sales of 109 million in the second quarter of 2022.
With the legalization of cannabis in Canada it’s definitely had its impact on the medical market. Consumers can easily get cannabis now without the need for a medical license.
Some medical producers are even switching to going public to keep up with the customers that just want to buy from a cannabis store and don’t want to get the necessary licensing if they are using cannabis to treat an illness.
Why is the medical cannabis market declining?
There are a number of factors for the decline of the medical cannabis market.
Here are some key factors:
Competition from the illicit market
Canada’s medical cannabis market is facing persistent competition from the illicit market. Despite the legalization of recreational cannabis, the illegal market continues to exist.
The illicit market can also offer lower prices, wider product variety, and easier access without the need for medical documentation.
These factors have drawn some medical cannabis users away from the legal medical market, leading to a decline in patient enrollment and subsequent market shrinkage.
High excise taxes
The imposition of high excise taxes has placed an additional burden on the legal medical cannabis industry.
While recreational cannabis is subject to excise taxes, medical cannabis was initially exempt.
However, this exemption was lifted in 2019, impacting the affordability of medical cannabis for patients.
The increased cost has dissuaded some individuals from seeking medical cannabis, further contributing to the decline in the medical market.
According to a report by CTV News, experts highlight the negative effects of high taxes on the industry.
They argue that these taxes not only drive up prices for consumers but also create an incentive for individuals to purchase elsewhere.
The regulatory landscape surrounding medical cannabis can present challenges for patients and industry stakeholders.
Obtaining a medical cannabis license in Canada requires a healthcare professional’s authorization, which can be time-consuming and costly for patients.
Moreover, the need for ongoing consultations and renewals may pose a barrier for patients seeking convenient access to their medication.
These regulatory hurdles have deterred some potential patients from entering the medical cannabis system, impacting the market’s growth.
Shifting patient preferences
As the recreational market expanded, some individuals who previously obtained medical cannabis licenses opted to transition to purchasing cannabis from the recreational market instead.
The recreational market offers convenience, lower costs, and reduced stigma associated with medical cannabis use.
This shift in patient preferences has contributed to a decline in the demand for medical cannabis products and has adversely affected the medical market’s growth.
Product availability and diversity
Another aspect impacting the medical cannabis market is the limited availability and diversity of products.
Health Canada’s regulations on cannabis production and distribution impose strict guidelines on licensed producers, which can restrict the range of products offered.
Some patients may not find the desired strains, dosages, or delivery methods they need within the legal medical market.
This limitation has driven patients to explore alternative sources or turn to self-medication, thereby impacting the market’s size.
What’s next for medical cannabis in Canada?
The medical cannabis market in Canada may continue to see a decline in sales. The barriers that come with medical cannabis make it much harder for consumers to easily purchase.
This leads former medical cannabis users to the option of buying from recreational stores or even the illicit market.
Only time will tell with Canada’s cannabis medical market, we’ll have to keep track of the data within the next few years.