Doing the math

2019 Q1 – Health Canada reports:

“An estimated 47% of cannabis users or 2.5 million Canadians obtained cannabis from legal sources in the first three months of 2019”

2019 Q1 Sales Figures reported by Health Canada can be found here.

(pricing and equivalency assumptions below are made by the writer)

Flower – 6700kg = 14,740lbs X 16 = 235,840oz @ $250/oz (retail) = $59,000,000 X 12 months = $708,000,000 annualized legal flower sales.

Oil – 7200kg @.92 = 6624litres = 6,624,000ml @ $3/ml = $19,872,000 X 12 months = $238,464,000 annualized legal oil sales.

Total suggested annualized legal cannabis sales = $946,464,000

Deloitte’s 2018 report says:

“The total cannabis market in Canada, including medical, illegal, and legal recreational products, is expected to generate up to $7.17 billion in sales in 2019”

Cannabis Business Plan also says:

“The total cannabis market in Canada, including medical and recreational cannabis products, is expected to generate up to $7.17 billion in total sales in 2019. Legal sales are expected to contribute more than half of this total – up to $4.34 billion”

So, if 47% is legal as Health Canada estimates (and a percentage that Cannabis Business Plan apparently supports), that would mean that, based on reported legal sales, the overall Canadian cannabis market size is approx. $2 billion – a far cry from the $7 billion that Deloitte and Cannabis Business Plan are predicting.

If the market does turn out to be only $2 billion, what happens to the stock prices of the growers?

Just askin…