Five years after legalization, the number of Canadians using recreational cannabis keeps getting higher while the sector shows signs of burning out.
According to new research from Statistics Canada, one in five Canadians reported using cannabis in 2020 — a six per cent increase from before legalization. Output from the new cannabis industry has meanwhile been shrinking since late 2022.
Canada’s Cannabis Act legalized recreational use and sales five years ago, on Oct. 17, 2018.
“During this time, Statistics Canada has been contributing to an improved understanding of the social, health and economic impacts of this policy change,” the Statistics Canada report said.
The statistics agency says the rate of cannabis use more than doubled in the country between 1985 and 2017, when it reached 14.8 per cent of adults. By 2022, the number of adults reporting cannabis use in the past year had climbed to more than one in four Canadians, or 27 per cent, according to Statistics Canada.
“Cannabis legalization has normalized its use without doubt,” Toronto Metropolitan University lecturer and industry expert Brad Poulos told CTVNews.ca. “Much of the stigma is eliminated and many people just look at cannabis the way they do alcohol.”
Statistics Canada also noted large regional and demographic discrepancies in usage.
Despite its unofficial status as Canada’s cannabis capital, British Columbia was in third place for adult use in 2021 at 26 per cent of people, after first place Nova Scotia at 31.5 per cent and P.E.I. at 28.4 per cent. The only province where less than one in five Canadians used cannabis that year was Quebec, at 15.7 per cent.
Cannabis use in 2021 was also most common in 18- to 24-year-olds (39 per cent) and those 25 to 44 (31.2 per cent). Countering pre-legalization concerns, Statistics Canada observed no increase in use among people 15 to 17, despite increases in all other age groups.
Output from the cannabis sector meanwhile grew until peaking in November 2022, when its gross domestic product reached $11.6 billion. That has since fallen to $10.8 billion, which represents 0.5 per cent of the Canadian economy. Following legalization, many of Canada’s largest cannabis companies have shrunk their operations, while smaller players have shut down, sold off, or declared bankruptcy.
“Legal sales are growing … but there are simply too many players in most segments for the industry overall to be profitable,” Poulos from Toronto Metropolitan University explained. “We’re in a period of industry consolidation and seeing all of the things you see when that happens such as bankruptcies, restructuring and mergers.”
After a flurry of openings, the number of bricks-and-mortar pot shops now appears to be stable, according to Statistics Canada, reaching 3,332 in 2023. Those stores made $4.5 billion in sales in 2022, a year-over-year increase since legalization. More Canadians are also getting cannabis legally, with 68 per cent doing so in 2020, up from 47 per cent in 2019.
“Increased legal sales and decreased illicit sales is a big accomplishment,” Robert Schwartz, a professor at the University of Toronto’s Dalla Lana School of Public Health, told CTVNews.ca. “This has also meant less of the harms associated with charging people for possession of small amounts.”
Michael DeVillaer is an assistant professor of psychiatry and behavioural neuroscience at McMaster University who writes extensively about drug policies. With production exceeding demand, DeVillaer notes that Canada’s largest cannabis companies have never had a profitable year while losing billions in investors’ money.
“At the beginning of legalization, the cannabis industry overestimated the domestic market and was overly optimistic about the development of foreign markets,” DeVillaer told CTVNews.ca. “Small or modest gains in sales are unable to save the industry from its enormous accumulated debt.”
Statistics Canada also noted that 4.7 per cent of past-year cannabis users, or approximately 300,000 people, experienced impaired control over their cannabis use, making them at-risk for addiction. Impaired control means a strong urge for a substance and difficulty controlling use. Risk factors include being male, single, from a low-income household and starting cannabis use by age 15 or younger. Other reports have found an increase in cannabis-linked disorders and poisoning among youth since legalization.
“There is a need for warning labels and other forms of public education about the dangers of addiction, dependence, cannabis use disorder,” Schwartz from the University of Toronto said.
He would also like to see smoking phased out over health concerns.
“Unfortunately, smoking cannabis is still widely acceptable even amongst people who would never smoke cigarettes,” Schwartz said. “This is most unfortunate as cannabis smoke has over 20 known carcinogens and smoking anything damages the respiratory system.”
Dr. M-J Milloy is a research scientist at the British Columbia Centre on Substance Use and an assistant professor in the University of British Columbia’s medical department.
“Despite the warnings of some experts and advocates prior to legalization, during the last five years we have not seen sharp increases in cannabis-related acute harms, for example, in THC-impaired driving, or in youth rates of cannabis use,” Milloy told CTVNews.ca. “As a substance use epidemiologist, I have seen no evidence over the last five years that legalization has led to a substantial deterioration of public health in Canada, especially relative to other far riskier substances, such as alcohol or opioids.”
Milloy says Canadians have largely been using cannabis safely for more than a century, and he questioned the accuracy of some of Statistics Canada’s data.
“Population-level measures of substance should be viewed with healthy skepticism, especially when those estimates are derived from government-run surveys of controlled substances, such as cannabis prior to legalization,” Milloy explained. “While Statistics Canada data suggests cannabis use has increased… it is plausible that legalization has led more people to admit to using cannabis now that it is no longer a crime for adults to use non-medical cannabis.”
TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.
The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.
“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.
The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.
But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.
Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.
“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.
“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”
Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.
The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.
In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.
Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.
The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.
The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.
Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.
Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.
It will also re-evaluate its design ranks.
Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.
Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.
No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.
About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.
Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.
Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.
A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”
This report by The Canadian Press was first published Sept. 12, 2024.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
