Canada and the United States are two of the few countries in the world with established recreational cannabis sales, each demonstrating that a regulated adult-use market can be both safe and commercially successful.
With more than a decade of legal sales in Colorado and Washington, and several years of national sales in Canada, this article examines what a mature adult-use cannabis market looks like and where global recreational cannabis retail is headed next.
How Canada Built a Thriving Cannabis Retail Market
Legalized in 2018, the history of cannabis legalization in Canada is a story of success. Although other countries decriminalized cannabis years earlier, Canada became the first country in the world to legalize recreational cannabis at the federal level.
Canada’s cannabis retail landscape has quickly evolved into an international model of success. In 2021, Canadians spent $2.1 billion (or close to $400 million monthly) on cannabis from more than 2,600 licensed stores. There also haven’t been increases in cannabis-related crime, injury, or issues related to underage access. Cannabis dispensary compliance standards — including age verification, seed-to-sale cannabis analytics tools, and reporting to regulatory bodies — have been central to Canada’s success in keeping the legal market accountable.
Cannabis Product Diversity Drives Consumer Demand
As the market grows, a seemingly never-ending number of products are available, including flower, concentrates, beverages, edibles, topicals, and more. Roughly 20 percent of Canadians in 2020 reported consuming cannabis, about five percent more than pre-legalization.
Top Provinces Lead Cannabis Sales in Canada
British Columbia and Ontario are still the two provinces with the most potential — with $554 million and $1.47 billion in sales, respectively. Both have the largest population centers and now the country’s fiercest competition for cannabis retail space.
Mergers and Acquisitions Signal Market Maturity
The market is beginning to mature, with several large mergers and acquisitions closing in 2021. This includes Hexo’s purchase of 48North Cannabis Corporation, Thrive’s merger with Apheria, and Aurora Cannabis’ acquisition of TerraFarma.
Adult-Use Cannabis Legalization Across the United States
The US is a compelling case for cannabis retail, both in terms of medical and recreational applications. On the one hand, there are 37 states with at least some form of access to medical cannabis and 18 with full adult-use access. On the other hand, the federal government still lists cannabis as a Schedule 1 Drug.
This federal-versus-state contradiction has produced a fragmented patchwork of cannabis legislation across America. Today, each state operates its own independent cannabis cultivation, sales, distribution, and consumption laws. Each is a stand-alone program with no interstate sales allowed.
State-by-State Legalization Reshapes the US Market
The first states to legalize adult-use cannabis were Colorado and Washington in 2012. Then pro-cannabis legislation began spreading to other states in quick succession. As a result, more than a dozen states allow consumers to legally light up, typically managed similarly to tobacco and alcohol sales.
US Cannabis Sales Figures by State
Even with the federal restrictions, cannabis sales are booming. Statista predicts annual sales surpassing $25 billion by 2025. If we zero in on California, that state alone was responsible for $5.2 billion from 2021. Colorado hit $2.2 billion in the same year. New York, a state just launching in the adult-use world, could rake in $4.6 billion in sales once it gets going.
Federal Cannabis Reform Faces Ongoing Delays
With more states increasingly choosing their own legislative path toward legalization, the pressure is on for federal lawmakers to change the long-standing anti-cannabis rules on the books. Still, there is a the slow pace of movement on the Safe Banking Act. It could be another few years before widespread legalization occurs in the US.
Global Recreational Cannabis Markets on the Horizon
First comes medical, then comes recreational. Several major countries have legal medical cannabis, including Germany, Israel, Australia, Thailand, and more.
Medical Markets Pave the Way for Recreational Sales
Many countries first adopt cannabis for medical purposes and then gradually expand their legislation to permit adult-use recreational sales. Canada followed this same pattern, as did every US state that currently permits adult-use cannabis sales.
As countries accumulate experience regulating cannabis as a medicine, recreational legalization and cannabis retail expansion become increasingly likely outcomes.
Countries Closest to Full Cannabis Legalization
Canada and the US aside, Mexico and South Africa are the next contenders. Both have passed legalization but are waiting on full-scale implementation. Switzerland, the Netherlands, Luxembourg, Italy, and Germany are other countries to watch.
Regulated Cannabis Markets Prove Safe and Profitable
When well regulated, cannabis is a safe recreational substance, much like alcohol. With testing, compliance standards, and taxation, how cannabis banking in Canada supports retailers and consumers alike by taking it off the streets and generating tax revenues for society as a whole.
As Canada, Colorado, and California have demonstrated, regulated cannabis retail generates tax revenue, reduces illicit sales, and works for consumers and governments alike.
TechPOS Offers Omnichannel Solutions for Cannabis Retailers
Cannabis retailers rely on Canadian cannabis POS systems for dispensaries to manage inventory, process compliant transactions, and meet provincial reporting requirements. Whether you are in the cost to open a cannabis dispensary in Canada research phase or in the initial planning stages, TechPOS offers an all-in-one solution for cannabis ecommerce and POS solutions, digital signage built for cannabis dispensaries, self-checkout solutions for cannabis stores and more.
TechPOS Is Built for Canadian Cannabis Compliance
TechPOS designed its platform to comply with Canadian cannabis regulations set by provincial and federal authorities. Working closely with Provincial & Federal regulating authorities is deeply embedded into our roots.
We help you understand your customers, beat out the competition, and boost sales through an cannabis retail hardware and software solutions.