Provincial Updates

Ontario

In late August, the province of Ontario hit a new milestone in the industry, surpassing 1,000 open, authorized cannabis retailers. Toronto retailers make up approximately one-quarter of all the cannabis retailers in the province, says OCS. Iits website lists nearly 250 retailers within the city. Toronto cannabis retailer 6 of Spade became the 1,000th store in the province when it opened in August of this year.

Manitoba

In late August, High Tide, a retail cannabis corporation, has acquired five retail cannabis locations in Regina. The locations include Prince of Wales Drive, Victoria Avenue, Eastgate Drive and Albert Street. All five locations are expected to be operational by the end of 2021.

DELTA 9 CANNABIS INC. announced the grand opening of its 13th Delta 9 Cannabis retail store and its 10th cannabis store in the province of Manitoba. Delta 9’s newest retail store is located in the City of Selkirk, also in late August.

Quebec

The Board of Directors of the Société québécoise du cannabis (SQDC) is proud to announce the appointment of Jacques Farcy as President and CEO of the SQDC. Mr. Farcy took office on October 12. Before being appointed President of the SQDC, Mr. Farcy held the position of VicePresident, Sales Network Operations at the SAQ, a company where he also held several vice-presidential positions surrounding marketing and sales.

The SQDC increased its first-quarter net income by 51% compared the same period last year, which the SQDC attributed in part to growth in the number of branches in its network. The provincially-run corporation’s net income reached $14.8 million for the 12 weeks ending June 19.

Saskatchewan

Ayurcann Holdings Corp., a Canadian cannabis extraction company, provided details on a wholesale distribution and supply agreement that it previously entered into with National Cannabis Distribution, a wholly- owned subsidiary of Kiaro Holdings Corp., for exclusive wholesale distribution and supply in the province of Saskatchewan.

Alberta

According to an CBC article, Aurora Cannabis Inc. said eight per cent of its global workforce will be impacted by the forthcoming closure of one of its Alberta facilities. The cannabis company announced Wednesday that it is closing its Aurora Polaris property in Edmonton as part of a plan to streamline its operations. A spokesperson would not say how many workers could lose their jobs.

British Columbia

According to a BNN article, Canadian cannabis giant Tilray is shutting down its Nanaimo, B.C. facility, a move that one local news outlet expects will result in the layoff of up to 170 staff. The move, part of Tilray’s efforts to cut costs following its merger with Aphria, will see the facility close in several phases and is expected to be completed early next year.

Prince Edward Island

This year the Prince Edward Island government will begin to observe September 30th as the National Day for Truth and Reconciliation. Along with provincial government offices, the Prince Edward Island Liquor Control Commission and Cannabis Management Corporation stores, Distribution Centre, and Head Office will also be closed for the day.

Nova Scotia

The NSLC released its first-quarter financial results (April 1, 2021 – July 4, 2021), reporting an 11.9% increase in earnings for a total of $71.7 million. Total sales for the quarter were up 15.0% to $211.8 million, with an increase in both beverage alcohol and cannabis sales. Overall sales increases can be attributed to 12 extra selling days (due in part to Sunday closures last year), increased store hours (due to pandemic restrictions this time last year) and the addition of 19 new cannabis stores (seven of which opened this quarter). There was a 12.2% increase in beverage alcohol sales this quarter to $187.1 million and 42.7% increase in cannabis sales to $24.7 million.

Newfoundland & Labrador

Loblaw has opened its 11th retail location for licenced cannabis in the province. That means recreational marijuana is now available at all Dominion stores in Newfoundland and Labrador. The newest and last location to offer cannabis is at the former Memorial Stadium location near Quidi Vidi Lake in St. John’s.

New Brunswick

Cannabis NB announced it is introducing a new addition to its retail model. The Cannabis FarmGate program will allow licensed New Brunswick cannabis producers to sell their own products onsite at their facilities. To participate in the program, eligible New Brunswick cannabis producers will submit an application to Cannabis NB for consideration. All cannabis products sold at an approved FarmGate store will be required to be grown, produced and packaged onsite and meet all federal regulations prescribed by Health Canada. Cannabis NB released its unaudited first quarter results for the 2021-2022 fiscal year. Total sales of legal recreational cannabis for the quarter ended June 27, 2021 (13 weeks) were $19.9 million, 21.5% higher than the quarter ended June 28, 2020 (13 weeks). Net income for the quarter ended June 27, 2021, was $3.5 million, an improvement of 160.3% compared with the prior year’s quarter net income of $1.4 million.

Yukon / Northwest Territories / Nunavut

On September 10th, the Yukon Bureau of Statistics released data on police-reported crime in the territory. The Federal Statues Violations category includes drug violations, possession, production, and trafficking. The legalization of marijuana dropped possession violations of cannabis to zero. There were 100 violations between 2011 and 2016. There were nine violations under the Cannabis Act in 2020. / In 2020-21, the profits from the Nunavut Liquor and Cannabis Commission generated nearly $4 million for the territorial government. Those profits came from nearly $17 million worth of alcohol and about $100,000 worth of cannabis sold by the Nunavut Liquor and Cannabis Commission (NULC) from April 1, 2020 to March 31, 2021. Of those sales, $8 out of $10 came from the Iqaluit beer wine store. In all, the annual profits of $3.7 million from sales of 1.6 million litres of alcohol and a small amount of cannabis went to the territorial government.

DISPOSABLES ON THE RISE

By Dave Kalpan, Greentank Technologies

These days, knowing the vape trends and patterns defining your market isn’t enough. Brands need to know where their markets are headed so they can anticipate trends and capitalize on them as they unfold. On the surface, the overall proportion of disposable sales in the US hasn’t wavered much since Q1 2018, accounting, on average, for approximately 10% of the market over this time. While the segment’s national sales may appear steady and consistent—its market share never dropping below 9% or rising above 11%—a deeper dive into the data at the individual market state level reveals that disposable sales are anything but. In California, for instance, disposables are experiencing a slight resurgence after dipping to record low market share levels of 9% in 2020. That number rose to 10% in Q1 2021 and then increased again to 11% in Q2, where it remains two months through the current quarter. We admit that a 2% hike doesn’t exactly jump off of the page, but it’s no small chunk of change either given that California does more than $1B in vape sales annually. Nevada is experiencing a similar resurgence with its disposable category, which cratered to 20% of the market in Q2 2020—its lowest level since Q2 2018—following the emergence of COVID-19 and the subsequent

“These days, knowing the vape trends and patterns defining your market isn’t enough. Brands need to know where their markets are headed so they can anticipate trends and capitalize

“on them as they unfold.

decline in tourism in the state. That number dropped another 2% to start 2021 but has since rebounded impressively, vaulting to 24% of the market in Q2 and rising yet again to 27% in Q3.

In Colorado, disposable sales remained relatively steady throughout 2020 and are now on the rise in 2021, having posted back-to-back record market share levels in Q1 (16%) and Q2 (17%). The current quarter is on pace to be its most promising yet, with disposable sales spiking to more than 25% of the market through August—a small sample size no doubt, but a glaring pattern nonetheless that simply cannot be ignored.

As the most mature and entrenched region in the US, the Pacific Northwest has established itself as “cartridge country” with market shares of the category type consistently above 90%. That chasm is only growing in Oregon, where cartridges have garnered 98% in each of the last four quarters. But it’s a different story in Washington, where the tide appears to be turning for the disposable category. Disposables there hit rock bottom in Q1 2020, plummeting to 1% of the market, but have risen steadily in popularity since. By the end of 2020, disposables accounted for 3% of the market. In Q1 2021, the category jumped another percentage point and then increased once again the following quarter to 5% of the market for the first time, where it remains in Q3.

Disposables are moving on an opposite trajectory in Canada. The category debuted impressively when Cannabis 2.0 products were initially launched there, accounting for more than 20% of all Canadian vape sales through the first six months of 2020. Since then, however, the popularity of the segment has steadily declined. Disposables accounted for just 12% of the Canadian vape market over the latter half of 2020, and have basically fallen off of the map entirely in 2021, constituting a mere 4% of all vape products sold through July. Alarm bells aren’t ringing in Ontario just yet; disposables there still account for roughly 10% of the province’s vape sales. But the trend is becoming more difficult to overlook with each passing quarter in Saskatchewan (7.1%), Alberta (6.6%) and British Columbia (3%). The funny thing about trends, though, is that they’re fleeting. Transient. Here for a good time; not a long time! Just because the category appears to be on the ropes in Canada at the moment does not mean that it will be forever. Consumer interests are constantly in flux, as are product technology innovations, package sizes and pricing. And if the disposable-resurgence trends we are seeing in the US are an indication of what’s to come in Canada—and they generally are fairly

“Disposables are moving on an opposite trajectory in Canada. The category debuted impressively when Cannabis 2.0 products were initially launched there, accounting for more than 20% of all Canadian vape sales through the first six months of 2020.

Since then, however,

“the popularity of the segment has steadily declined.

reliable precursors—then it’s simply too early to write off the category altogether.

Who knows? Maybe we’ll be publishing a similar article at some point in 2022 on the unexpected rise of the Canadian disposable segment.

We just threw a lot of data at you, so let’s simplify it in terms of future probabilities and advisable courses of action:

● In Nevada, Washington and Colorado, disposables appear to be a strong play.

Sales of the category are at record (or near-record) levels in all three markets and have been trending upward in popularity throughout the course of 2021. ● In California, disposables are a safe play, accounting for north of $100M annually and growing slightly in popularity. ● In Oregon, disposables are not a safe play. With only 2% market share, they generate less than $4M in revenue annually and with 16 brands already in the space, there is not much room for opportunity. ● In Canada, disposables are not a safe play at the moment with the category’s market share dipping to record lows in 2021.

Yet, there is reason for optimism that disposables could rebound in popularity there at some point in the future.

Simply put, there’s never been a more pressing need for a service like Greentank’s Market Matching in our corner of the industry.

If you find the above insights useful, think about what other crucial market insights you might be missing out on. There’s a world of vape data out there that goes beyond disposable and cartridge sales. Contact us today to book your Market Matching consultation or to speak with one of our industry and product experts, and we’ll break it all down for you.