Understanding Legal Cannabis Consumption and Category Potential in Canada

Understanding Legal Cannabis Consumption and Category Potential in Canada

Cannabis became a federally legal and regulated product across Canada on Oct. 17, 2018, making Canada the second country in the world to legalize the consumption and sale of certain recreational cannabis products (it’s also legal in Uruguay). As a result, many retailers and manufacturers in Canada are likely assessing whether they should enter the legal recreational cannabis market. Given the newness of the legalization of cannabis, and as companies ponder the decision, there are some notable stats they should consider about the budding opportunity.

Since legalization, 22% of Canadians have legally consumed cannabis. Consumption, however, varies by region. Most notably, legal consumption in Quebec is far less than in many other provinces/regions at just 12%. Comparatively, legal consumption in the Maritimes, Ontario and Western Canada are all close to one quarter of their respective populations at 25%, 23% and 23%, respectively.

Not surprisingly, younger generations are more likely to consume legal cannabis than their older counterparts. In fact, nearly one-third of consumers under 35 years old say they have legally consumed cannabis, compared with just 13% of those age 65 and older.

When looking at legal recreational cannabis sales, it’s important to differentiate between tetrahydrocannabinol (THC) and cannabidiol (CBD), as they have substantially different effects on users. THC is the active chemical in cannabis that is responsible for most of the psychological effects of cannabis. CBD, on the other hand, is a component of cannabis and hemp plants which consumers use for its therapeutic attributes. In terms of consumption, 19% of Canadians have legally consumed THC varieties and 11% have legally consumed CBD varieties (with 9% using more than one format).

It’s worth noting that consumer knowledge of THC and CBD factor into consumption trends. For example, 78% of Canadian consumers are aware of the CBD compound, but only 16% understand it. For retailers and manufacturers looking to enter the legal recreational cannabis market in Canada, it may be worth starting with consumer education so they understand the use cases for each substance.

With only 22% of Canadians having legally consumed cannabis, the majority of consumers who have not represents an enormous opportunity for retailers and manufacturers in or looking to enter the legal recreational cannabis market. And when it comes to engaging new users, more than one-third (34%) of consumers say that free samples and doctor recommendations are the most important influencers.

The legal recreational market in Canada is still new, but Nielsen estimates first-year legal recreational sales to reach $2 billion in sales in the first year. Regardless of whether manufacturers and retailers plan to enter the market, this new category is one that could also have an impact on existing products. And those entering the legal cannabis market need to ensure they have consistent and engaging omnichannel experiences and execute the fundamentals just as effectively as those in traditional fast-moving consumer goods sectors.


The insights in this article were derived from Nielsen’s Beyond the Buzz Study, March 2019.