Key Takeaways From The State of Weed
Since the start of legalization in Canada (2018) we begun tracking as many cannabis strains as possible. Today our database has grown to over 1,800 cannabis strains from well over 250 cannabis brands and with close to 100,000 data points.
Some questions we asked, this year, are:
- How many active retailers are currently open?
- How many retailers in Ontario have closed over the last 12 months?
- What are Strainy's most popular strains and brands?
- What are the most common and rare terpenes found across all strain categories (Indica, Sativa, etc.)
If you're a cannabis enthusiast and want to dive deeper into our insights, visit The State of Weed. In this post we'll go over some key takeaways from our insight.
Here at Strainy, we are currently tracking 3,171 retail stores from several provinces in Canada and from 2021 we began tracking Ontario retailers' status on a yearly basis. When it comes to store closures - our numbers are rough estimates as there may be retailers that had opened and closed within the 12 month period who have not been tracked.
Interestingly enough, there have been reports that Canada can support up to 5,137 retailers assuming roughly one store per 7,500 Canadians. Going by these numbers places Ontario with the ability to sustain 1,994 cannabis storefronts. However, the reality is far less rosy than those projections.
Firstly, the reality is store closures in Ontario greatly exceed the rest of Canada. Cities with higher store counts (Toronto currently at 218) also experience the highest rate of store closures (Toronto with 58) in the province. According to the AGLC, Alberta's governing body for cannabis, 45 retail stores have closed in Alberta since January 2020. Toronto in 1 year had more store closures than an entire province's ~2 year period. But with 763 stores for a population of 4,543,111 market saturation is on the horizon.
Secondly and this is important - not every Canadian consumes cannabis and we have a long way to go before cannabis consumption is socially accepted.
If 25% of Canadians admittedly use cannabis within the last 12 months then our population figures of actual consumers drops significantly meaning stores will actually serve less than the previously stated benchmark and compete for the same customers with the same product. Thus, resulting in our current market saturation.
We gathered a sample size of 1000 THC values from our 3.5g package category. When looking at THC potency we found that the majority of our records indicated 17% - 23.11% THC potency.
Our upper fence from our sample size is 32.19%, making any entries above this threshold an outlier.
However, there are a handful of strains within our top 10 that site above the upper fence. When it comes to THC potency there is very limited information on strains that can go beyond 30% or 40%. There have only been ~3 strains to push above the 40% THC mark and many have and will continue to call into question the testing method being used. Strains that have been said to hit closer to the 40 ranges are oftentimes nameless and never replicated.
Our data aligns with a general rule of thumb: that most cannabis strains you may encounter will likely fall around 17% - 23.11% THC under current market conditions.
The biggest elephant in the room this year is Cannabis retail stores, market saturation and store closures and we can see it extending further into 2023 combined with market consolidation.
The reality is Canadians do not need "one store per 7,500" our current market does not support it and we are seeing the push back which is giving a lot of retailers a reality check. We'll be keeping a keen eye on the market Alberta as it may shape up to consolidate in similar fashion as Ontario.
When it comes to strains and similarly with brands - we found that there is no clear favourite in terms of popularity. Value shoppers currently drive the market force as our most viewed strains tend to be in the budget to mid range category (with a few exceptions).
There are a lot of variables when it comes to cannabis popularity from: branding, marketing, store stock levels and budtender recommendations all influence consumer behaviour and it seems everyone is still jockeying for position.
If you’re an entrepreneur in the cannabis industry and especially in retail; you should have the understanding of what you got to work with now that the cannabis hype has mellowed out. Understanding the market, and your competition is key going forward.
Is your business plan good enough to stay in?
Or will it go... up in smoke?